Wednesday, January 16, 2013

Paying For College: Master Promissory Note

One of the more common items found on the to-do list is the Master Promissory Note (MPN). The master promissory note is a legally binding contract between a lender and a borrower. It contains the terms and conditions of the loan and includes how and when the loan must be repaid. Student loan recipients must complete their MPN before they are able to recieve funds.

When a student clicks on the MPN link in their to-do list, they will be redirected to the Department of Education’s student loan website. It takes approximately 30 minutes to complete the MPN and the process must be completed in a single session.

According to the website, it is a good idea for students to have the following items available before attempting to complete their MPN:
  • Federal Student Aid PIN
  • Student’s Permanent Address (and mailing address if different). 
  • Student’s Telephone Number 
  • Employer’s Name 
  • Employer’s Address 
  • School Name 
  • Reference Names 
  • Reference Addresses 
  • Reference Email Addresses 
  • Reference Telephone Number 
  • Relationship of each reference to the student 
It is very important to review all information for accuracy before submitting the MPN. Parents completing a Direct PLUS MPN must sign in using their own federal student aid PIN. Use of another person’s PIN is considered fraud.

Note: Reference information should be for two people with different U.S. addresses who have known the borrower for at least three years. (The first reference should be a parent or legal guardian.)