Word of the Day Wednesday: Master Promissory Note (MPN)
Each Wednesday, MEFA features a Word of the Day, where we highlight a word (or sometimes a phrase) related to the college planning process. This month, we're focusing on vocabulary related to Federal Direct Student Loans.
Today's Word of the Day is Master Promissory Note (MPN).
A Master Promissory Note, or MPN, is a legally binding document that a student must sign prior to borrowing a Federal Direct Student Loan. The MPN contains the terms and conditions of the loan program, and in most cases, a student can sign a single MPN to cover all of the loans that they borrow for undergraduate and graduate studies up to a period of 10 years. The MPN covers both subsidized and unsubsidized loans. Colleges notify students of their specific process to sign the MPN. Most students are eligible to sign the MPN electronically by using their FSA ID on the federal website, StudentLoans.gov.
Why does this matter to you?
Any type of loan borrowing is a serious undertaking. Signing an MPN is a promise to repay a loan along with any accrued interest and fees. Additionally, by signing, a student acknowledges that he or she will repay the loan even under the following circumstances:
- the student doesn't complete the degree program
- the student can't get a job after leaving school, and/or
- the student doesn't like the education received
Still have questions about the MPN? Review these FAQ's for additional information.