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What document explains your rights and responsibilities as a federal student loan borrower?


the Master Promissory Note (MPN) is the document that explains your rights and responsibilities as a federal student loan borrower. The MPN is a legally binding agreement between you and your loan servicer.

When you first borrow federal student loans, you are required to sign an MPN, which outlines the terms and conditions of your loan. It is important to carefully read and understand the MPN before signing it. Here are some key points covered in the MPN:

Loan terms:

The MPN specifies the type of loan you are borrowing (e.g., Direct Subsidized Loan, Direct Unsubsidized Loan) and the amount you are borrowing. It also explains the interest rate, fees, and the dates when interest begins to accrue.

Repayment obligations:

The MPN details your repayment obligations, including the repayment start date, the length of the repayment period, and the monthly payment amount. It explains the different repayment plans available to you and how to choose or change your repayment plan.

Rights and responsibilities:

The MPN outlines your rights as a borrower, such as the right to receive loan disclosure statements, access to loan information, and the right to prepay your loan without penalty. It also explains your responsibilities, such as making on-time payments, notifying your loan servicer of any changes in contact information, and notifying them if you have difficulty making payments.

Deferment and forbearance options:

The MPN provides information on the circumstances under which you may be eligible for loan deferment or forbearance, allowing you to temporarily postpone or reduce your loan payments. It explains the process for applying for these options and any associated requirements.

Consequences of default:

The MPN explains the consequences of defaulting on your federal student loans, including collection fees, wage garnishment, loss of eligibility for future federal financial aid, and negative impacts on your credit history.

Loan discharge and forgiveness:

The MPN describes the circumstances under which your loan may be discharged or forgiven, such as through the Total and Permanent Disability Discharge or the Teacher Loan Forgiveness program.

The MPN is an important legal document that governs your federal student loan. It is crucial to thoroughly review and understand its contents, and if you have any questions or concerns, you should contact your loan servicer or the U.S. Department of Education for clarification.

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