Master Promissory Note

Jump to Section

Need help with a Master Promissory Note?

Post Project Now

Post Your Project (It's Free)

Get Bids to Compare

 Hire Your Lawyer

What is a Master Promissory Note?

A master promissory note (MPN) is a legal document that defines the details of a student loan and how a borrower will repay the money to the US Department of Education. An MPN also gives college students valuable information about the terms of the loan, including any interest on payments and other terms and conditions.

How Master Promissory Notes Work

Master promissory notes (MPN) are legal documents that outline the terms and conditions of student loans. They are required for federal student loans and are good for up to ten years in some cases. College students or their parents can take out student loans under an MPN.

There are many facets to a master promissory note, and understanding each part of a MPN is essential to making a sound financial decision when it comes to student loans.

Here is an overview of what you can expect to find in your master promissory note:

Repayment Guidelines

When a borrower signs a master promissory note for a student loan, they agree to repay the loan indefinitely. This means that the money borrowed must be paid regardless of whether a college student finishes school and applies even if their education was not satisfactory. MPNs must be repaid even in the event of filing for bankruptcy.

Master promissory notes also contain information about future repayment options, such as:

  • Cost of payments
  • Frequency of payments
  • When payments should begin

Eligible Expenses

Master promissory notes include information about what expenses student loans can be used on. These usually include:

  • Tuition
  • Room and board
  • Transportation costs
  • Books and supplies
  • Meals

Interest Rates

Every MPN includes details about federal student loan interest rates. This section of the document is important because the higher the interest rate, the higher the total cost of the loan. When signing a master promissory note, it is essential to take into account the interest rate on the loan when determining how equitable it is.

Annual Borrowing Limits

Since a master promissory note is good for up to ten years, multiple loans can be taken out under the same original agreement. However, the federal government limits how much can be borrowed over the course of a year. The MPN sets out the annual borrowing limit for a college student upfront.

Charges and Fees

Additional fees and charges beyond interest rates are detailed in a master promissory note. Some examples include:

  • Late fees
  • Collection charges


Each master promissory note must include two personal references who are close to the borrower and have been for at least three years. This information is required in the application in case a borrower defaults, or stops making payments, on a loan. These references will be used to try to contact the borrower, or in some cases, to locate them through a process called skip-tracing.

Check out this article to learn more how master promissory notes work.

Meet some lawyers on our platform

Donya G.

31 projects on CC
View Profile

Ashley H.

19 projects on CC
View Profile

Bryan B.

31 projects on CC
View Profile

Michael K.

7 projects on CC
View Profile

What Happens After I Sign a Master Promissory Note?

When master promissory note is signed and approved, the federal government sends your loan details to the financial aid department at your school. Once that department receives it, you will be required to complete entrance counseling before your funds can be disbursed.

Entrance Counseling

Entrance counseling is required of all college students borrowing their first student loans and is designed to answer any questions about the student loan process. Since the loan is not finalized until the funds are disbursed, this also allows students a chance to back out of the loan before becoming financially responsible for it.

Disbursement of Funds

After entrance counseling is completed, your funds will be disbursed to you. Most colleges opt to disburse funds in a single payment, but that is not always the case. Be sure to check with your financial aid department directly to confirm how payments will be made.

Once funds are disbursed, the terms of the master promissory note go into effect immediately. If you have a change in address, phone number, stop going to school less than half the time, or decide to switch colleges, you must notify your financial aid office.

To find out more about what happens after you sign your promissory note, check out this article .

Master Promissory Notes and Student Loans

Master promissory notes dispense all of the vital information about student loan terms and conditions to borrowers. These legal documents were designed to include all the needed information about loans, loan limits, interest rates, repayment options, and much more.

There are two main types of student loans that require master promissory notes: federal direct Stafford loans and federal PLUS loans.

Federal Direct Stafford Loans

Federal direct Stafford loans are student loans that are known for their low interest rates. These loans also come with insurance that guarantees loan cancellation in the event that the borrower becomes disabled or dies.

Stafford loans are granted to students who fill out the FAFSA form and almost all students who apply qualify for the loan. Students qualify as long as they meet these requirements:

  • Attending college full-time
  • Have U.S. citizenship
  • Have never defaulted on other student loans

ContractsCounsel Master Promissory Note Image

Image via Pexels by Linkedin Sales Navigator

Federal PLUS Loans

Federal PLUS loans can be taken out by college students or their parents to pay for their college education. Federal PLUS loans are characterized by the following:

  • Fixed interest rates
  • Interest accrues while student is in school

Within federal direct PLUS loans, there are two categories: Grad PLUS loans and Parent PLUS loans. Grad PLUS loans are taken out by the college student and Parent PLUS loans are taken out by the parent(s) of the student. Grad PLUS loans have a borrowing limit, while Parent PLUS loans do not.

To qualify for a Grad PLUS loan, a student must:

  • Be enrolled in college at least half-time
  • Qualify per a credit check
  • Meet all requirements for federal student aid

To qualify for a Parent PLUS loan, a parent must:

  • Be the biological or adoptive parent of a student attending school at least half-time
  • Qualify per a credit check

The student who parents apply on behalf of must:

  • Meet all requirements for federal student aid

To find out more about master promissory notes and student loans, check out this webpage .

Do I Need to Sign a Master Promissory Note Every Year?

Master promissory notes are generally good for up to ten years, which means that you can take out as many loans (up to your borrowing limit) each year as you would like without having to sign a new promissory note . However, some colleges do have exceptions to this rule, so you should always check with your school’s financial aid office to be sure.

Check out this webpage for more information about master promissory notes.

Get Help with a Master Promissory Note

Do you need money for college but you’re unsure of where to start? Getting help with your master promissory note is a great first step to scoring the funding you need to get you through college. Post a project on ContractsCounsel today to connect with financial lawyers who specialize in college debt and student loans.

How ContractsCounsel Works
Hiring a lawyer on ContractsCounsel is easy, transparent and affordable.
1. Post a Free Project
Complete our 4-step process to provide info on what you need done.
2. Get Bids to Review
Receive flat-fee bids from lawyers in our marketplace to compare.
3. Start Your Project
Securely pay to start working with the lawyer you select.

Meet some of our Master Promissory Note Lawyers

ContractsCounsel verified
9 years practicing
Free Consultation

I’m an attorney focusing my practice on concierge corporate and intellectual property law for startups and high-growth companies. I also serve as outside General Counsel to several businesses in various sectors. Since founding my practice I've worked with hundreds of clients across a variety of industries. My experience as a former General Counsel of a premier edtech company gives me unique insight into the challenges my clients face and how to resolve them efficiently and cost-effectively.

ContractsCounsel verified
20 years practicing
Free Consultation

The Law Office of George K. Fuiaxis, from the very beginning in 2002, has built a reputation with its clients as an unmatched, diligent, hands on law practice that is always on duty to find the best course of action for its clients. With a supreme pledge of exceptional service to its clients in the areas of Real Estate (Commercial & Residential), Loan Modifications, Intellectual Property, Corporate Law & Business Transactions, Wills, Trusts & Estates, the Law Office of George K. Fuiaxis creates solutions for the many faceted problems faced by its clients. The office represents several various clients, including well known lending institutions, foreign and domestic corporations, sellers and buyers of residential and commercial real estate, residential and commercial landlords and tenants, well known restaurant and business owners, automobile dealerships, airline companies, well known fashion, sports and entertainment industry individuals and corporations, information technology (IT) startups and well known IT companies.

ContractsCounsel verified
Immigration Attorney
4 years practicing
Free Consultation

Mr. Muhammed Uzum represents corporate clients and their employees as well as individuals in all aspects of U.S. immigration, nationality, and consular processes. Mr. Uzum’s core immigration practice focuses on strategizing and filing E-2, E-1, L-1, and EB-5 applications. His area of expertise includes responding to complex H-1B RFEs, PERM Audits, and Appeals. He also advises clients in obtaining employment-based green cards as well as self-petitions through EB-1 and NIW applications. Mr. Uzum also has vast experience in a variety of other non-immigrant visa matters including B-1, F-1, P-3, E-3, and TN filings.

ContractsCounsel verified
Outside Counsel
26 years practicing
Free Consultation

I'm a business law generalist with over 24 years of experience, including as in-house General Counsel, as outside counsel through my own firm and as an attorney in an Am Law 100 law firm. My employers and clients uniformly appreciate my ability to (i) negotiate and close transactions quickly and effectively, and (ii) to make the complex simple. Among other things, I can efficiently assist you on entity formation, governance, and structure; HR issues; mergers and acquisitions; and the negotiation and drafting of all types of commercial contracts. I'm the proud recipient of multiple Martindale-Hubbell Client Distinction Awards given only to the top 5% of attorneys for quality of service.

ContractsCounsel verified
Business Attorney
14 years practicing
Free Consultation

Strategic thinking business minded Outside General Counsel here to help you with your company. I have been able to help guide business owners from startup through series A, B, & C funding and ultimately IPO's. Regardless of your plans I am here to help you succeed as you grow your business.

ContractsCounsel verified
Principal Attorney
17 years practicing
Free Consultation

Daliah Saper operates a cutting-edge internet and social media law practice that regularly leads local and national media outlets to solicit her commentary on emerging internet law issues involving cyberbullying, sexting, catfishing, revenge porn, anonymous online defamation, domain name and user-name squatting, privacy, and the latest business decisions made by social media platforms such as Facebook, Twitter and YouTube. As a litigator Daliah represents companies bringing or defending business and intellectual property disputes. (She has argued cases in a number of jurisdictions including taking a case all the way to the Illinois Supreme Court.) As a transactional lawyer she helps clients choose the right business entity, drafts contracts and licensing agreements, advises on sweepstakes and contest rules, and ensures website terms of use and privacy policies are compliant, and provides comprehensive trademark and copyright counseling. Since founding Saper Law Offices in 2005, Daliah has been named a 40 Under 40 by Law Bulletin Publishing Co., a top Media & Advertising attorney by Super Lawyers Magazine 14 years in a row, and has been repeatedly recognized as a leading media and entertainment lawyer by Chambers and Partners. For the past eleven years, she also has taught entertainment and social media law at Loyola University Chicago School of Law.

ContractsCounsel verified
10 years practicing
Free Consultation

Mr. Mehdipour attended the University of California San Diego where he received his degree in political science. After graduating from UCSD, Mr. Mehdipour attended Southwestern University School of Law where he received his JD. Upon passing the bar, Mr. Mehdipour gained invaluable experience both in a law firm and business setting. Mr. Mehdipour uses his prior business and legal experiences to negotiate the most advantageous results for his clients.

Find the best lawyer for your project

Browse Lawyers Now

Want to speak to someone?

Get in touch below and we will schedule a time to connect!

Request a call