Lesson 4.5 · 3 minEntrance counseling and the promissory noteEntrance counseling and the promissory note
This lesson takes you through the two tasks your school needs from you before a first federal loan can be paid out. Both are done on studentaid.gov with the account you made for the FAFSA, and each one fits into a single sitting.
What entrance counseling covers
Entrance counseling is a short online session for first-time federal borrowers. It explains how interest works, when repayment starts, what happens if you miss payments and how to reach your servicer. Along the way it asks you to estimate your expenses and the pay you might earn after school, so you can compare the two.
Your school receives a record once you finish, and your first loan waits until that record arrives. Some schools ask every borrower to repeat counseling each year, so read your school's instructions even if you have done it before.
A parent taking out a PLUS loan completes a separate PLUS counseling session only in certain cases, such as after an adverse credit decision. The aid office can tell a parent whether that step applies to them.
Signing the Master Promissory Note
The Master Promissory Note, or MPN, is your legal agreement to repay your federal loans along with any interest and fees. At many schools you sign it once and it covers the subsidized and unsubsidized loans you take over several years there.
The MPN asks for your contact details, your driver's license number if you have one, and two references with different addresses who have known you for at least three years. Ask each reference before you list them. A parent taking a PLUS loan signs a separate PLUS note in their own name.
What to keep and check afterward
Save or print the confirmation for both steps, and keep a copy of the signed note. Read the statement of borrower rights and responsibilities that comes with it. It is long, but it is the record of what you agreed to, including your right to cancel a loan within the time your school allows.
After your first loan is paid out, studentaid.gov lists it along with the name of your servicer, usually within a few weeks. Write that name down and set up an account with the servicer, because statements and notices come from that company.
Try this week
- Sign in to studentaid.gov and see whether counseling is done
- Complete entrance counseling in one sitting
- Ask two references for permission to list them
- Save copies of both confirmations
Takeaway. A first federal loan waits on entrance counseling and the MPN, and you finish both with your own account on studentaid.gov.