When taking out student loans, the signed agreement to repay them is called a a promissory note. For federal student loans, this is often a Master Promissory Note (MPN) , which is a legal document in which you promise to repay your loan(s) and any accrued interest and fees to the lender, typically the U.S. Department of Education
. Key points about the promissory note and MPN include:
- It is a legally binding contract outlining your obligation to repay the loan even if you do not complete your education, are not employed after graduation, or are dissatisfied with your education
- The MPN can cover multiple loans over a period of up to 10 years, so you usually do not need to sign a new note every year for federal loans
- The promissory note details loan terms such as repayment options, interest rates, fees, and borrower responsibilities
- For private student loans, you typically sign a new promissory note for each loan, and terms may vary by lender
- Signing the promissory note is required before loan disbursement
In summary, the agreement you sign to promise repayment of student loans is called a promissory note , and for federal loans, this is often a Master Promissory Note (MPN)
