An MPN or Master Promissory Note is a legal contract that is signed between the lender and the borrower of a federal loan. The MPN contains all the information regarding the loan taken, its repayment, the terms and conditions applicable to it and the interest rate at which it is borrowed.
It is signed for a period of up to 10 years and requires the borrower to list 2 references. The lender may contact the MPN for a variety of different reasons but they will most commonly be contacted if the lender is unable to reach you or you start to default on your loans.
Therefore, it is important you use references that can be reached easily by your lender and will have knowledge of your whereabouts and your contact number at all time. In a nutshell, the MPN is a legally binding contract between the student and the lender, where the student promises to repay the loan to the US Department Of Education along with all the accumulated interest and fees.
The references on the MPN may be contacted in the event that the student defaults on his loans and the lender cannot reach them via mail or call. The references for a student loan are people that the lender can contact in case you are not reachable by them.
The first thing to do when deciding on who to put as a reference is your ties with the person. The federal loan provider states that the first reference should typically be a parent. However, if you are not on good terms with your parents or they are given to changing residences quickly as well, or are not available to fill in as your reference, you may want to consider someone else that matches that criterion very closely.
This could mean a relative; an uncle, aunt or grandparent, who may be willing to be a referee for you. Make sure whoever you choose agrees to act as a reference for you as well as be in touch with you for the next five to ten years. The reference should be a citizen of the United States and should be residing within the country as well.
You must have known the reference for no less than 3 years. Besides these conditions, you need to provide maximum information about the references. This includes their mailing address, contact number, full name, relation to you and email address if possible.
The information has to be correct and accurate to the best of your knowledge. The references should not share the same address. References are a good way of proving your credibility to your lender. The lender may use the reference to vouch for your character as well.
Some people may not realize that this is a federally-binding document, and putting false or unreliable information on it can have serious consequences. Most of the information that you need to fill out is self-explanatory. For example, your name, social security number, address, and phone number are all common fields you should have no problem filling out.
However, choosing what references to use is a task that should take some careful analysis. If you have ever applied for a job, chances are that you have had to include personal references with your resume. To fill out a MPN, you must have two credible references that you have known for at least three years. After your current amount due is paid, payments are allocated across loans in repayment status starting with the highest interest rate.
Once the loans in repayment status with the highest interest rate are paid in full, any remaining payment amount will be allocated across the loans with the next highest interest rate. This will help keep the due dates for all loan groups aligned. Payments are allocated first to past due groups. We encourage you to pay as much as you can, because interest accrues daily on your outstanding principal balance. Please note, this excludes loans that are already in repayment status and consolidation loans.
If all of your loans are in one of these repayment plans, only your regular monthly payment amount as noted on your monthly billing statement will be automatically deducted. This will keep the due dates for all loan groups aligned.
If you want to direct future online payments to an individual loan instead of directing to a loan group, you may request that your loans be ungrouped by calling us at the number above.
If you make a partial payment, your current amount due will be reduced by the amount already paid. By selecting this option, your due date will only advance a single month, even though you have paid more than the current amount due.
This does not restrict you from still making a payment in September, if you wish. We encourage you to continue making monthly payments because interest may continue to accrue on your outstanding principal balance.
We do not guarantee it will apply to your specific circumstances. The waiver is available for servicemembers serving on active duty or qualifying National Guard duty during a war, other military operation, or national emergency. Secretary of Defense, to order you to state active duty, and the activities of the National Guard are paid for with federal funds.
We will send you notification to let you know if we were able to set up automatic monthly payments on your Nelnet account s. You are responsible for making any payments due prior to this date. Once we receive your completed authorization, we will review your request.
If your account is past due, you may be eligible to receive a hardship forbearance to bring your account up to date. Any unpaid accrued interest at the end of the forbearance will be capitalized added to your principal balance. This may increase your regular monthly payment amount.
Contact us if you choose to cancel this forbearance. If the. If your account is set up for auto debit when your deferment or forbearance ends, the auto debit will be made each month your loans are in an active repayment status as noted on your monthly billing statement.
Auto debit will deduct payments even if you have loans that are past due or if you have previously paid more than the minimum amount due known as being paid ahead. Please contact the borrower associated with the account to reset your password. Please wait before attempting to log in again or contact the borrower associated with the account to reset your password. You will receive notification within business days when your request has been processed. Submit all applicable statements.
Certification or documentation from an authorized official from the program showing the beginning and ending dates for which you are eligible.
Criminal Code and 20 U. Your deferment will not be processed until we receive all required information. Capitalization causes more interest to accrue over the life of your loan and may cause your monthly payment amount to increase.
Interest never capitalizes on Perkins Loans. The example compares the effects of paying the interest as it accrues or allowing it to capitalize. Both co-makers are equally responsible for repaying the full amount of the loan. Interest is not generally charged to you during a deferment on your subsidized loans. Interest is always charged to you during a deferment on your unsubsidized loans. On loans made under the Perkins Loan Program, all deferments are followed by a post-deferment grace period of 6 months, during which time you are not required to make payments.
The holder of your Perkins Loans is an institution of higher education or the Department. Your loan holder may use a servicer to handle billing and other communications related to your loans.
The Privacy Act of 5 U. Participating in the William D. We also use your SSN as an account identifier and to permit you to access your account information electronically. The routine uses of this information include, but are not limited to, its disclosure to federal, state, or local agencies, to private parties such as relatives, present and former employers, business and personal associates, to consumer reporting agencies, to financial and educational institutions, and to guaranty agencies in order to verify your identity, to determine your eligibility to receive a loan or a benefit on a loan, to permit the servicing or collection of your loans, to enforce the terms of the loans, to investigate possible fraud and to verify compliance with federal student financial aid program regulations, or to locate you if you become delinquent in your loan payments or if you default.
To provide default rate calculations, disclosures may be made to guaranty agencies, to financial and educational institutions, or to state agencies.
To provide financial aid history information, disclosures may be made to educational institutions. To provide a standardized method for educational institutions to efficiently submit student enrollment statuses, disclosures may be made to guaranty agencies or to financial and educational institutions. To counsel you in repayment efforts, disclosures may be made to guaranty agencies, to financial and educational institutions, or to federal, state, or local agencies. If this information, either alone or with other information, indicates a potential violation of law, we may send it to the appropriate authority for action.
We may send information to members of Congress if you ask them to help you with federal student aid questions. In circumstances involving employment complaints, grievances, or disciplinary actions, we may disclose relevant records to adjudicate or investigate the issues. If provided for by a collective bargaining agreement, we may disclose records to a labor organization recognized under 5 U. Chapter Disclosures may be made to our contractors for the purpose of performing any programmatic function that requires disclosure of records.
Before making any such disclosure, we will require the contractor to maintain Privacy Act safeguards. Disclosures may also be made to qualified researchers under Privacy Act safeguards. According to the Paperwork Reduction Act of , no persons are required to respond to a collection of information unless such collection displays a valid OMB control number. The valid OMB control number for this information collection is Public reporting burden for this collection of information is estimated to average 10 minutes per response, including time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information.
The obligation to respond to this collection is required to obtain a benefit in accordance with 34 CFR Both co-makers are responsible for repaying the full amount of the loan. Your consent to this Electronic Signature Agreement covers the transaction you are presently completing e.
You understand and agree that your electronic signature of the transaction you are presently completing shall be legally binding and such transaction shall be considered authorized by you. You understand that by checking the box and agreeing to sign electronically, your electronic signature has the same legal force and effect as a handwritten signature.
At any point in this process, you will be able to print and read the information that is presented to you using your browser print option. However, the document you print upon completion of the electronic signature process may not be a complete version of the document due to system limitations and differences of technology. At any time prior to submitting your electronic signature, you may opt out of the electronic signature process and continue with a paper process.
Simply exit this session prior to accepting this Electronic Signature Agreement. This will be used to represent your name and date signed on the electronic document along with the words Electronically Signed.
Clicking submit completes the electronic signature process. You acknowledge and agree that your consent to your electronic signature is being provided in connection with a transaction affecting interstate commerce that is subject to the federal Electronic Signatures in Global and National Commerce Act, and that you and we both intend that the Act apply to the fullest extent possible to validate our ability to conduct business with you by electronic means.
You have other options. Accrue The act of interest or fees if applicable accumulating on your principle balance. Aggregate Loan Limit The maximum total outstanding loan debt you are allowed when you graduate or finish school.
Award Letter An official document issued by your school's financial aid office listing all the financial aid awarded to you. Borrower The individual who applies for, receives, and is responsible for paying back a loan. Capitalization Interest adds up accrues based on the principal balance of your loans.
Certification A process by which the school verifies that you are enrolled on at least a half-time basis, are making satisfactory academic progress, and are eligible for federal or private student loans. Co-Borrower Co-Signer An individual who signs the loan promissory note with you and is equally responsible for repaying the debt. Co-Borrower Endorser An individual who signs the loan promissory note with you and is secondarily responsible for repaying the debt if you do not.
Cost of Attendance COA The estimated total cost for a full time student to complete a full academic year at a college or university. Credit Report A report produced by a credit bureau and provided to a lender in order for the lender to determine your creditworthiness.
Credit Bureau An agency that collects personal and financial information from various sources about consumers. Credit Score A number, generally between and , provided in a credit report and used by a lender as a predictive indicator of your likelihood to repay a loan.
Current Amount Due Generally, the minimum monthly payment you must make by your due date, not the total amount you owe. Default The failure of a borrower to repay a loan according to the terms of the promissory note. Deferment A period during which you may postpone loan payments. Delinquency Failure to make loan payments when due. Delinquency begins with the first missed payment. Department of Education Department The agency of the federal government that is responsible for administering the federal financial aid programs.
Dependent Student An undergraduate student whose parents provide over half of his or her financial support. Direct Consolidation Loan Offered by the Department of Education, this program lets you combine one or more eligible federal student loans into one new Direct Consolidation Loan, with the Department of Education as your new lender.
Disbursement The release of loan funds to the school. Effective Date The date that a purchase, cash advance, fee, service charge, or payment is effective on a charge or credit account. Enrollment Status Indicates whether you are enrolled full-time or part-time. Entrance Counseling If you have federal education loans, you are required to receive counseling before your first loan disbursement is made. Exit Counseling If you have federal educational loans, you are required to receive counseling before graduation or if you cease to be enrolled at least half-time.
Expected Family Contribution EFC Amount your family is expected to contribute to your cost of education based on your family's income, net assets, savings, size, and number of children in college. FAFSA4caster An online tool designed to help you financially plan for college and get an early estimate of your federal student aid eligibility. Federal Perkins Loan Program The Federal Perkins Loan Program offers low-interest loans funded by the federal government and administered by the school to undergraduate and graduate students.
Federal Work-Study Program A federal program that provides part-time jobs, generally on campus, for undergraduate and graduate students with financial need, allowing you to earn money to help pay education expenses. Finance Charge The total amount of interest that will be paid over the life of a loan when the loan is repaid according to the payment schedule.
Financial Aid Financial assistance to pay for education expenses, which can include scholarships, grants, work-study, and loans. Financial Aid Award Letter A letter detailing the total amount of financial aid for which you are eligible. Financial Aid Package The combination of financial aid loans, scholarships, grants, work-study determined by the financial aid office of a college. Forbearance Forbearance allows you to temporarily postpone making payments, or to make lower payments, on a loan for a specific length of time.
Gift Aid Financial aid, such as grants and scholarships, that does not need to be repaid.
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