Master Promissory Note

• Loan Disbursement
• Subsidized vs. Unsubsidized: Know the difference
• Interest Rates and Loan Limits
• Stafford Loans are a Privilege, Not a Right
• Federal Stafford Loan Entrance Counseling
• The Federal PIN
• Completing the Master Promissory Note (MPN)

First-time borrowers at MSU must complete the Master Promissory Note (MPN) and Federal Stafford Loan Entrance Counseling. To help in completing the MPN, please have the award materials sent to you by Student Financial Services, at MSU, available for reference.

If you signed a Master Promissory Note (MPN) and received Federal Stafford Loan funds last year at MSU, you will not need to complete a new MPN unless you choose to select a different lender or different guarantee agency. It is recommend that you use the same lender for your Stafford Loan borrowing; this will usually mean that you will only have one servicer to work with for your repayment obligations.

Loan Disbursement

If you are applying for a loan for the entire academic year, the funds will be equally divided between the two terms. Loans for a single term will be disbursed at the earliest date according to the lender's and Minnesota State University, Mankato's disbursement schedule. Your loan proceeds will be sent to Minnesota State University, Mankato by your guarantor according to a pre-established schedule. Your loan(s) will be applied to your University charges and any remaining balance will be paid to you by paper check or direct deposit, according to the institution’s disbursement schedule.

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Subsidized vs. Unsubsidized: Know the difference

Federal Stafford Loans are part of the Federal Family Education Loan Program (FFEL). There are two types of Federal Stafford Loans: Subsidized and Unsubsidized.

The Federal Subsidized Stafford Loan is considered a NEED-based loan. NEED is defined as the difference between the institution’s Cost of Attendance and the Expected Family Contribution (EFC) that was determined from the Free Application for Federal Student Aid (FAFSA). Funding from Federal Subsidized Stafford Loan programs can never exceed the student’s NEED. Because the Federal Subsidized Stafford Loan is considered a NEED-based loan, the federal government pays the interest on the loan while the student is in school (a minimum of half-time enrollment is required as defined by federal regulations and institutional policies).

The Federal Unsubsidized Stafford Loan is considered a NON-NEED based loan. The Federal Unsubsidized Stafford Loan is awarded to students who did not have a demonstrated need, or whose need portion of the budget has been met, but still have unused eligibility in the overall Cost of Attendance and have remaining Stafford Loan eligibility. Because the Federal Unsubsidized Stafford Loan is considered a NON-NEED based loan, the federal government does not pay the interest while the student is in school. It is the student’s responsibility to pay the accrued interest while in school, or choose the option to capitalize the interest.

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Interest Rates and Loan Limits

The Federal Stafford Loan is a low-interest educational loan. The interest rate for loans originated on or after July 1, 2006 is fixed at 6.8%. Interest rates for loans originated from July 1, 1998 through July 30, 2006 are 6.54% while in school or grace and 7.14% when in prepayment (these rates will vary throughout the life of the loan) This interest rate is subject to change. Students will receive a disclosure statement and other notifications from their servicer indicating the interest rate on their Federal Stafford Loans.

The Federal Stafford Loan program has annual and aggregate limits on the amount of loan funding a student may borrow. The borrowing limits are as follows:

Dependent students (students who must provide parent information on the FAFSA application)

Grade Classification	Annual Limit	Aggregate Limit
(Based on Credits)
Freshman	$2,625	$23,000
Sophomore	$3,500	$23,000
Junior	$5,500	$23,000
Senior	$5,500	$23,000

Independent students (students who are not required to provide parent information on the FAFSA application).

Grade Classification	Annual Limit	Annual Subsidized Limit	Aggregate Limit
(Based on Credits)
Freshman (0-29)	$6,625	$2,625	$46,000
Sophomore (30-59)	$7,500	$3,500	$46,000
Junior (60-89)	$10,500	$5,500	$46,000
Senior (90+)	$10,500	$5,500	$46,000
Graduate Students	$18,500	$8,500	$138,500

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Stafford Loans are a Privilege, Not a Right

• In order to receive your Federal Stafford Loans you must complete certain steps.
• You must have completed a FAFSA for the current year.
• You must complete the Response/Loan Acceptance Form.
• You must have completed Stafford Entrance Loan Counseling. Your loan will not certified  prior to receiving confirmation that you have completed this requirement.
• You must have a valid Master Promissory Note on file with the guarantee agency for the lender you have selected.
• Your paperwork must be completed no later than 10 days prior to the end of the term for which you are requesting the loan.
• You must respond to any request for information from Student Financial Services in a timely manner.
• If all steps of the process are not followed, you WILL NOT receive your Stafford Loans and you will be liable for any institutional charges that have resulted from your enrollment.

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Federal Stafford Loan Entrance Counseling

If you have never borrowed a Federal Stafford Loan at MSU, you will have to complete Federal Stafford Loan Entrance Counseling. During this session you will obtain valuable information regarding:

• Use of the MPN
• Importance of Repayment
• Consequences of Default
• Expectations of Monthly Payments
• Repayment Options
• Budgeting
• Deferments
• Your Right and your Rights & Responsibilities as a borrower.

Depending on which lender you choose you may or may not have a link at the end of the MPN process to a Stafford Entrance Loan Counseling session. Regardless of which lender you choose this window will stay open, so if you are not prompted to complete a Stafford Entrance Loan counseling session please return to this page and go to www.mnsu.edu/campushub and select "Loans" then select "Stafford Loan Entrance Loan Counseling". By completing this counseling session online you will satisfy the Entrance Loan Counseling requirement. You must successfully complete the session and it is advised that you print the confirmation page for your records. Student Financial Services will be notified electronically when you have completed the counseling requirement.

The Federal PIN

The PIN serves as your identifier to let you access your personal information in various U.S. Department of Education, lender, guarantor, and servicer's systems. It's like the Personal Identification Number that you get from your bank that enables you to access your account. Your PIN code is assigned to you directly from the Department of Education and is neither available to nor, in any way, controlled by MSU. Because your PIN serves as your electronic signature, you should not give it to anyone, anywhere, at any time.

Once you successfully complete a request, the U.S. Department of Education will e-mail or mail your PIN. It will take up to three business days after you request your PIN for you to receive an e-mail notification with instructions on how to retrieve it electronically, or 7-10 days to receive it in the mail via the U.S. Postal Service.

You must have a Federal PIN to complete your MPN. Please request a Federal PIN at www.pin.ed.gov, if you do not already have one. In order to obtain a PIN you will need to provide the U.S. Department of Education with the following information:

• Social Security Number
• Last Name
• First Name
• Middle Initial
• Date of Birth
• Street Address
• Email Address
• A Self-assigned Pass-phrase

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Completing the Master Promissory Note (MPN)

Once you have your Federal PIN code, you will select a lender from the list below. The recommended lenders below participate in electronic processes that will ensure timely receipt of your Federal Stafford Loan Funds. Choosing to use a lender other than a lender from this list may significantly delay receipt of your funds. To select a lender from the list below, click on the button to the left of your lender. This will take you to the MPN site owned and maintained by your lender or your lender's guarantor. Follow all on screen instructions. To complete the MPN you will need the following information:

• Name
• Social Security Number
• Permanent Address
• Home Phone Number
• Date of Birth
• Driver's License Number
• Email Address (optional)
• Lender (from list below)
• Lender Code (from list below)
• Two References (must have different U.S. addresses)

Once you have completed the MPN process for your lender, be sure to return the Loan Acceptance Form to Student Financial Services. MSU will certify your application from the information on your Loan Acceptance Form and send it to the guarantee agency of your lender. Upon approval, your guarantor will send you a disclosure statement notifying you that your loan has been processed and approved. The disclosure statement will also notify you of the total amount of the loan you are borrowing, the disbursement dates of your loan, and other information regarding your loan. Your guarantor will disburse your student loan funds to Minnesota State University, Mankato according to MSU’s pre-determined disbursement dates for each term. Actual disbursement of funds to you will occur according to the institutions processing schedule (refer to the appropriate term information).

2007-2008 List of Recommended Lenders

	Lender	Code	Guarantee Agency
	U.S. Bank	821654	Great Lakes Higher Education Corp. (GLHEC)
	Wells Fargo	807176	P.O. Box 64080
			St. Paul, MN 55164-0080
	Citibank	826878	Education Assistance Corp. (EAC)
	Bremer Bank	806361	115 First Avenue Southwest
	Bank of North Dakota	816386	Student Loans of North Dakota
			PO Box 5509
			Bismark, ND 58506-5509
			800-243-7552
	Security National Bank	804189	Iowa College Student Aid Commission
			c/o iLink Service Center
			P.O. Box 7005
			Des Moines, IA 50309-7005
			800-243-7552
	Other	Paper MPN to be completed if you are using lenders other than those listed above or if you prefer to mail your MPN to the guarantor

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