When applying for federal Direct and Direct PLUS loans, you must sign a Master Promissory Note (MPN) before you receive your first check. The MPN is a legally binding contract in which you (and your co-signer, if applicable) agree to repay the loan money borrowed.
The Master Promissory Note describes borrower rights and responsibilities, including the terms and conditions of the loan, repayment schedule, interest rate, and the deferment/cancellation policies. Even though much of the "prom note" is legalese, it's extremely important to be familiar with the terms of your Master Promissory Note. By signing it, you not only agree to repay the money you borrow, but you also agree to all terms and conditions included. If you have any uncertainty or questions about any of the terms or conditions, you can visit studentloans.gov for more information about the promissory note. Remember that all federal education loans (Direct and Direct PLUS) are lent by the federal government, not by private lenders.
Once you sign your Master Promissory Note, a new one is not required for any new loans.
After signing your Master Promissory Note, you should direct all loan questions to the loan servicer, not your financial aid office. The servicer will provide a customer service phone number and website address.
If you were to review your Master Promissory Note, you would see that you have a number of borrower rights. While these rights will vary for non-governmental loans, federal loan borrowers are entitled to the following rights:
If there are any questions about these rights, contact your loan servicer.
The Master Promissory Note details borrower rights as well as responsibilities, and to sum it up: a borrower's primary responsibility is to pay loans back and pay them back on time.
Payments are required whether you receive a statement or not - so be sure to notify your servicer (or servicers) when your address changes. If you forget, they will still expect an on-time payment. There are no excuses for missed payments, and missed payments may harm your credit and possibly lead to higher interest rates on some loans.
The repayment of your student loans is a serious obligation. Payment is still required:
Stated simply - your student loans must be repaid.
UP NEXT: Repaying College Debt >>