What Is a Master Promissory Note?

Students must sign a Master Promissory Note before receiving a federal loan for college. The promissory note is a legally binding agreement whereby the student agrees to repay the loan, accrued interest, and fees to the Department of Education. 

What is the Master Promissory Note?

A student may be awarded several federal loans throughout his or her college career, including varying types of loans. If individual promissory notes were required for each of these federal loans, it would generate quite a bit of paperwork, much of which would be repetitive.

To simplify the process of receiving federal student aid, the U.S. Department of Education created the Master Promissory Note, also known as the MPN. In addition to being a legal acknowledgment that the student agrees to repay the loan, the Master Promissory Note provides the following information:
  • The total loan amount
  • Whether your loan is subsidized or unsubsidized
  • How interest will be calculated
  • When interest is charged
  • Any applicable loan fees
  • When repayment starts
  • Details about when loan deferment, forbearance, or forgiveness may be granted
  • Cancellation provisions
A Master Promissory Note must be signed before you can receive your federal loan funds. If you have already received federal student aid and signed an MPN within the last 10 years, you will probably not be required to re-sign your Master Promissory Note when being awarded federal student aid. However, you may have to sign a new MPN if any of the following circumstances apply:
  • No loan was disbursed after you signed your last MPN
  • A new type of loan is being awarded to you
  • Your school requires students to sign an MPN for each academic year
There is one MPN for the Direct Subsidized and Unsubsidized loan programs, and one for the Direct PLUS loan program. Parents who are taking out PLUS loans will also need to sign a promissory note.

How to Sign Your Master Promissory Note

The Master Promissory Note can be signed in one online session that shouldn’t take more than 30 minutes. The note can be signed on the FSA website here.
You will need the following information to sign your MPN:
  • Your FSA ID (created when filing your FAFSA)
  • Your personal and contact information
  • School Name
  • Two references with different US addresses
The FSA requires two references who will know your new mailing address and contact information in the event you move.
After you sign your student loan promissory note, you’ll receive a disclosure statement from the U.S. Department of Education or your school. This will include further details about the loans, including the expected disbursements amounts and dates.

Important Student Loan Reminders To Keep In Mind When Signing a Master Promissory note

There are a few things you should keep in mind when signing a Master Promissory Note, including:
  • You must still repay your loans even if you do not complete your college education, cannot find a job after graduation, or are not satisfied with the education you received.
  • Student loans are generally not eligible for discharge in bankruptcy.
  • Any parent borrowing a federal student loan for their child must also sign an MPN.
Taking out a student loan can be a bit intimidating for students, especially with the legal language on something like a promissory note. However, an MPN should help students feel empowered by giving them a more complete understanding of their rights and responsibilities as a borrower. Make sure you’re fully aware of the requirements of your federal student loans by reading through the promissory note in full after receiving a financial aid award from the FAFSA®.