Understanding the Master Promissory Note .MPN. [Education]: A Legal Overview
Definition & Meaning
A Master Promissory Note (MPN) is a legal document that allows a borrower to receive loans for one or more academic years. It serves as a binding agreement between the borrower and the lender, outlining the terms and conditions of the loan. The MPN simplifies the borrowing process by enabling students to secure funding for their education without needing to sign a new note for each loan disbursement.
Legal Use & context
The Master Promissory Note is primarily used in the context of federal student loans, including the Federal Family Education Loan (FFEL) Program and the William D. Ford Federal Direct Loan Program. It is an essential document in educational finance, allowing borrowers to access funds for tuition and related expenses. Users can manage their loan agreements using legal templates provided by services like US Legal Forms, which can help streamline the process.
Real-world examples
Here are a couple of examples of abatement:
Example 1: A student signs an MPN at the beginning of their college education, allowing them to receive federal loans for their first year. If they continue their education, they can use the same MPN for subsequent years without needing to fill out a new form each time.
Example 2: A graduate student who has not received any disbursements within a year of signing their MPN will have their MPN expire, requiring them to sign a new one to access additional loans. (hypothetical example)
Relevant laws & statutes
The Master Promissory Note is governed by federal regulations found in Title 34 of the Code of Federal Regulations, specifically:
- 34 CFR 682.200 (Federal Family Education Loan Program)
- 34 CFR 685.102 (William D. Ford Federal Direct Loan Program)