A Master Promissory Note (MPN) is a legally binding document that outlines your promise to repay borrowed funds, along with the terms and conditions that govern your student loans.
Understanding how an MPN works can help you avoid surprises and make more informed borrowing decisions. From how long the agreement remains valid to what responsibilities you’re agreeing to, knowing the details of an MPN ensures you’re fully prepared before accepting student loan funds.
Table of Contents
Key Points
• A Master Promissory Note is a legally binding agreement in which a borrower promises to repay a student loan and any accrued interest and fees to the lender.
• Federal student loans may use a Master Promissory Note valid for up to 10 years.
• The promissory note includes details on interest rates, fees, and repayment options, and must be signed before loan disbursement.
• Deferment options allow postponement of payments, though interest may accrue depending on the loan type.
• You can get a copy of your note by logging into your account on StudentAid.gov or (for private loans) contacting your lender.
What Is a Master Promissory Note?
A Master Promissory Note (MPN) is a legal document that contains the terms and conditions for federal student loans. When you sign an MPN, you are promising to repay your loan(s) and any accrued interest and fees to the U.S. Education Department.
Borrowers with federal student loans can typically sign just one MPN that covers multiple years of borrowing, rather than signing a new MPN each year. This means you are accepting the amount of each year’s new loans under the terms of the existing MPN.
There are two types of MPNs:
• Direct Subsidized/Unsubsidized Loan MPN: A student borrower must complete and sign this MPN before a school can make the first disbursement of a Direct Subsidized or Direct Unsubsidized Loan.
• Direct PLUS Loan MPN: A graduate/professional student borrower or parent borrower must complete and sign this MPN before a school can make the first disbursement of a Direct PLUS Loan. Keep in mind that as of July 1, 2026, new Grad PLUS Loans will no longer be available. Those that received one before June 30, 2026 may continue borrowing under current terms through the 2028-29 academic year.
Key Information to Review in Your MPN
A promissory note will provide you with a wealth of information about your student loan (or loans). Here’s a closer look at what you’ll find in a Master Promissory Note.
Repayment Options
Federal loans come with several options to help you manage your debt post-graduation, such as income-driven repayment plans and forgiveness programs. These options are all outlined in your MPN. You’ll want to take time to review them, especially as you enter the repayment phase of your borrowing journey.
If you have private student loans, your promissory note will also outline your repayment options and any borrower benefits you have access to (such as reduced-payment plans or forbearance). Before signing the contract, you’ll want to review the repayment details and make sure everything you have discussed with your lender is reflected in the promissory note.
Student loan refinancing is an alternative repayment strategy that allows borrowers to replace one or more existing student loans with a new loan from a private lender, ideally at a lower interest rate or with different terms. While refinancing can simplify repayment and reduce monthly payments or total interest costs, it also converts federal loans into private debt, meaning borrowers will give up any federal benefits. Refinancing replaces your original MPN with a new agreement.
Deferment Options
Student loan deferment lets you postpone payments on your student loans for a certain period of time. You won’t have to pay your student loan bills during a deferment, but interest might accrue during this time, depending on your loan type.
Federal loans offer deferment during a number of different situations, including being enrolled in school at least half-time (and for six months after you graduate), being unemployed, economic hardship, and active military service. Under Trump’s One Big Beautiful Bill, however, loans made after July 1, 2027 will no longer be eligible for deferments based on unemployment or economic hardship.
Like federal student loans, private student loans are typically placed into deferment while you’re enrolled at least half-time in school, and you may also have a six-month grace period after you graduate before you need to start making payments. Interest will generally accrue on private student loans during a period of deferment. Private loans may also offer other deferment options, but every lender is different, so you’ll need to check your promissory note.
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Interest Rate: Fixed vs Variable
Interest rates on student loans can be fixed or variable. With a fixed-rate loan, your interest rate will remain the same for the life of the loan. With a variable-rate loan, the interest rate on the loan fluctuates based on a market benchmark or index rate.
Federal student loans have fixed interest rates, which are set each year by federal law. To view current interest rates for federal student loans as well as previous years’ interest rates, visit the U.S. Education Department’s website.
Private student loans may give you a choice of fixed or variable rates. Your rate and whether it’s fixed or variable will be listed in your loan’s promissory note. If the rate is variable, it may start off lower than a fixed-rate option, but could rise over time leading to higher payments.
Student Loan Fees
Your promissory note will also detail any additional costs, such as any student loan fees. For example, federal student loans and some private student loans charge an origination fee, which is a percentage of your loan amount. This fee is typically taken from the loan before it is dispersed, which means you receive less than the full loan amount you accepted. Since the origination fee is included in the principal, you will also pay interest on it (even though you did not receive those funds).
Other student loan fees you may see listed on a promissory note include application fees, late payment fees, and collection agency fees (in the event you default on your loan and it goes to collections).
Borrower Rights and Responsibilities
When you sign a Master Promissory Note, you have the right to clear disclosure of your loan terms, including interest rates, fees, repayment options, and conditions for deferment or forbearance. You’re also entitled to information about loan servicing, access to income-driven repayment plans (for federal loans), and protections such as grace periods and cancellation or discharge options if you qualify.
Your responsibilities as a borrower include repaying the loan on time, keeping your contact information current, and using the funds for approved educational expenses.
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When Is the Promissory Note Signed?
In general, borrowers will need to sign the promissory note for their loans before receiving any funds. Students who are borrowing federal student loans are able to sign their master promissory note online by logging into their federal student loan account. Typically, you’ll need to sign only one MPN for multiple subsidized and unsubsidized loans, and it will be good for up to 10 years of continuous education.
A private student loan lender may allow you to sign a promissory note online, or you may need to print it out, sign, and send it via regular mail.
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What if a Promissory Note Is Not Signed?
For federal loans, a signed promissory note is required before the loan is disbursed. So, failing to sign the promissory note could mean you won’t receive your funds, or at least won’t receive them until the promissory note is signed.
A signed promissory note is also generally required for disbursement of a private student loan, though each lender will have their own requirements.
Do You Need a New Promissory Note Every Year?
Private lenders typically require students to sign promissory notes for each loan taken out, which means you may sign a new promissory note every year. Generally, federal student loan borrowers can sign a one-time Master Promissory Note that is good for up to 10 years of continuous education.
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Do Your Parents Need to Sign?
If you are borrowing a private student loan and a parent is acting as your student loan cosigner, they will likely need to sign the promissory note.
If you’re taking out a federal student loan for your undergraduate education, you are the only borrower and your parents do not need to sign your MPN.
If a parent is borrowing a Parent PLUS Loan to help pay for your college education, however, they will need to sign an MPN. As with a student MPN, a parent needs to sign only a single MPN once every 10 years. The government can provide multiple loans based on one parent MPN.
How Long Does the Master Promissory Note Process Take?
According to the Education Department, most people complete their Master Promissory Note online in less than 30 minutes. When you log into your account to fill out your MPN, keep in mind that the entire process must be completed in a single session, since you cannot save your progress.
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The Takeaway
A Master Promissory Note is a binding agreement that defines your responsibility as a student loan borrower. By understanding what the MPN covers and how long it remains valid, you can make informed decisions, borrow with confidence, and avoid unexpected issues as you manage your student loans.
Looking to lower your monthly student loan payment? Refinancing may be one way to do it — by extending your loan term, getting a lower interest rate than what you currently have, or both. (Please note that refinancing federal loans makes them ineligible for federal forgiveness and protections. Also, lengthening your loan term may mean paying more in interest over the life of the loan.) SoFi student loan refinancing offers flexible terms that fit your budget.
FAQ
Do you have to do a master promissory note every year?
No, you do not have to sign a Master Promissory Note (MPN) every year for federal student loans. Once signed, it’s typically valid for up to 10 years and allows you to borrow multiple loans under that same MPN. MPNs are also not school-specific so you can typically use the same MPN even if you transfer colleges.
How do you get your student promissory note?
For federal loans, you can complete your Master Promissory Note on the Federal Student Aid website. It takes about 30 minutes to fill out and two to three business days to process. You will then be able to access (and download) your student promissory note by logging into your account. For private loans, you may be able to sign your promissory note online or you may need to print it out, sign it, and mail it to the lender. You’ll receive a copy of your promissory note along with your other loan materials.
How long does it take for a master promissory note to process?
Once you submit the Master Promissory Note (MPN) online, it usually takes about one to two business days for processing. This time frame allows for the U.S. Education Department to verify your information and communicate with your school regarding the loan. After your MPN is processed, your school will credit the loan funds to your account, and you can check your loan status on the Federal Student Aid website.
How do I get a copy of the promissory note for my student loan?
You can get a copy of your signed Master Promissory Note (MPN) for federal student loans by logging into your account on StudentAid.gov using your FSA ID. Navigate to your loan documents to find the MPN. You can then view, download, or print a copy for your personal records.
With a private student loan, your lender will typically provide you with a copy of the promissory note, along with several other documents, when they finalize the loan. If you can’t locate a copy, you can reach out to your lender and ask them to send you one.
Do I have to pay my student loans if I drop out of college?
Yes, even if you drop out of college, you’re still required to repay your student loans. Once you’re no longer enrolled in school at least half-time, student loans typically enter a grace period, which is often six months. After that, repayment begins. Dropping out does not eliminate your obligation to repay the debt, and failure to make payments could lead to loan default.
Will a student loan affect my credit score?
Yes, student loans directly affect your credit score. Once you take out a student loan, it becomes part of your credit report and, like other types of loans, can impact your payment history, length of your credit history, and credit mix. Making timely payments can help you build a positive credit history. However, missed or late payments can negatively affect your credit and score.
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