Master Promissory Note (MPN)
What Is a Master Promissory Note?
Master Promissory Note (MPN) is a legally binding agreement between a borrower and the U.S. Department of Education that outlines the terms and conditions of a federal student loan.
By signing the MPN, the borrower agrees to repay the loan and any accrued interest and fees.
The document also explains borrower rights and responsibilities.
Why It Matters
Master Promissory Note:
- Establishes the legal obligation to repay federal loans
- Defines interest, repayment terms, and borrower responsibilities
- Allows multiple loan disbursements under one agreement
Borrowers must sign an MPN before receiving federal student loan funds.
Understanding the terms helps borrowers avoid surprises during repayment.
How Master Promissory Note Works
Master Promissory Note is completed electronically through the federal student aid system.
Example: A student approved for federal loans signs an MPN before funds are disbursed to the school. The same MPN may cover multiple loans issued during the student’s enrollment period.
The agreement remains valid for several years unless revoked.
Borrowers should review the terms carefully before signing.
MPN vs. Loan Agreement
MPN → Federal student loan contract
Loan Agreement → General contract used for many loan types
MPN is specific to federal student loans.
FAQs About Master Promissory Note
Do I sign an MPN every year?
One MPN may cover multiple loans over several years.
Can I cancel an MPN?
Borrowers may revoke authorization before new loan disbursements.
Does signing guarantee loan approval?
Approval also depends on eligibility requirements.
Related Terms
