Quick Answer
The document is the Master Promissory Note (MPN), a binding contract between you and the U.S. Department of Education. You sign it once before your first federal Direct loan is disbursed, and it covers all Direct Subsidized, Unsubsidized, or PLUS loans you borrow under that MPN for up to ten years. The MPN explains how much you may borrow, when interest accrues, what the grace period is, your right to deferment and forbearance, how repayment plans work, and what counts as default.
You complete the MPN online at StudentAid.gov before any federal loan funds are released.
What the MPN is, in plain English
The MPN is the legal promise that you will repay the money the federal government lends you, plus interest and any fees. Two key things make it a "master" note: it covers multiple loans across multiple years, and it lists every right and obligation that applies to those loans in one place.
You sign it once, before your first disbursement, and it remains active for up to 10 years (or until you decline to borrow more under it).
The two parts of the MPN
| Section | What it covers |
|---|---|
| Borrower's Rights and Responsibilities Statement | Plain language description of repayment plans, deferment, forbearance, consolidation, grace period, default, and the protections you have |
| Promissory Note | The legal promise to repay, the maximum amount you may borrow, the interest rate formula, late charges, and consequences of default |
The rights the MPN gives you
- Prepayment without penalty. You may pay any amount, at any time, with no early payoff fee.
- A grace period. Most Direct Subsidized and Unsubsidized loans have a six month grace period after you drop below half time enrollment before payments begin.
- Choice of repayment plan. Standard, Graduated, Extended, or an Income Driven plan based on your income and family size.
- Deferment and forbearance. Pause payments for documented hardship, in school enrollment, military service, or other approved reasons.
- Loan discharge in specific cases. Permanent disability, school closure, false certification, or death of the borrower.
- Free consolidation. Combine multiple federal loans into a single Direct Consolidation Loan with one payment.
- Written notice before collection. The servicer must notify you of late payments and default before turning your account over to collections.
The responsibilities you accept
- Repay regardless of outcome. You owe the loan even if you do not finish your degree, do not find a job, or are unhappy with the school.
- Pay on time, every month, unless you have approved deferment or forbearance.
- Keep contact information current. Notify the servicer within 10 days of any change to your name, address, phone, employer, or email.
- Notify the school if you transfer, drop below half time, withdraw, or change your expected graduation date.
- Use the funds for educational expenses. Tuition, fees, books, room and board, and other qualifying costs.
- Repay even after bankruptcy. Federal student loans are usually not dischargeable in bankruptcy except in very narrow hardship cases.
How to find your MPN
- Sign in at StudentAid.gov with your FSA ID.
- Open the Documents section in your dashboard.
- Click the MPN(s) on file. Each one is a PDF you can download for your records.
If you have borrowed Subsidized, Unsubsidized, and PLUS loans, you may have more than one MPN; PLUS loans require their own.
Entrance counseling vs the MPN
Before you sign the MPN, the Department of Education also requires you to complete Entrance Counseling. Counseling is an interactive lesson on how loans work; the MPN is the legal contract. Both are mandatory for first time Direct loan borrowers, and both are completed online at StudentAid.gov.
Exit counseling at the end
When you graduate, withdraw, or drop below half time, the school requires Exit Counseling. Exit counseling reviews the same rights and responsibilities you accepted in the MPN, plus the specifics of your repayment plan, your servicer, and your first payment date. It is the second time the MPN content is presented to you, this time in the context of paying back.
FAQs
Do I sign a new MPN every year?
No. A single MPN covers up to ten years of borrowing under the same loan type (for example, Direct Subsidized and Unsubsidized). PLUS loans need their own MPN.
Where do I sign the MPN?
Online at StudentAid.gov, using your FSA ID as your electronic signature.
What is the difference between the MPN and the loan agreement?
They are the same document. "MPN" is the legal term and "loan agreement" is the everyday name on the StudentAid.gov dashboard.
Can I cancel a federal loan after signing the MPN?
Yes. You can decline all or part of a loan up to 120 days after the school disburses the funds. Contact the school's financial aid office to start the cancellation.
The takeaway
The Master Promissory Note is the single legal document that defines your federal student loan rights and responsibilities. You sign it once at StudentAid.gov, keep a copy with your records, and refer back to it whenever you have a question about prepayment, deferment, grace periods, or what your servicer is allowed to do.
