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Words Starting with M-P

Master Promissory Note (MPN)

The Federal Direct Stafford Loan MPN is the legal contract requiring you to repay the loan. It is valid for 10 years while you are enrolled as a student. Once you complete the Federal Direct Stafford Loan MPN, you will not need to sign another one to borrow in future years. Also see promissory note.

The Federal Direct PLUS Loan MPN is a legal contract requiring your parents to repay the Federal Direct Parent (PLUS) Loan. Once a parent completes the PLUS Loan MPN, he/she will not need to sign another one to borrow in future years. If a parent has two students attending college, a separate MPN is required for each student. Likewise, if a mother and father both borrow a PLUS Loan for one student, a separate MPN is required for each borrower. Although the PLUS Loan MPN remains in effect for ten years, parents need to complete the Online PLUS Pre-approval every year to activate a new PLUS Loan for each loan term and to ensure that credit standards continue to be met.

The Federal Perkins Loan MPN and University Loan MPN are the legally binding documents that are evidence of a borrower's indebtedness to a school. If awarded a Perkins or University Loan, you must sign the MPN before receiving funds. Please visit Student Financial Services for more information.

Maturity

The maturity date is when the grace period on a loan has ended and the loan officially moves to repayment status.

National Student Clearinghouse

The National Student Clearinghouse is a national database, which lenders, loan servicers, guaranty agencies, schools, and students can access to verify student degree and enrollment information.

National Student Loan Data System (NSLDS)

NSLDS is the U.S. Department of Education's central database for student aid. It receives data from schools, agencies that guaranty loans, the Direct Loan program, the Pell Grant program, and other U.S. Department of Education programs. NSLDS provides a centralized, integrated view of Title IV loans and Pell grants that are tracked through their entire cycle; from aid approval through closure. For more information, visit NSLDS. A FSA ID is required to view this site.

Net

The term net is used to refer to the amount remaining after all charges or fees have been deducted from the total. For example, your net income is your total income minus the amount of taxes you pay.

The net amount of your Federal Direct Stafford Loan is the amount that is disbursed into your Bursar account to cover University charges. It is the amount that you borrowed, i.e., the gross amount, with 0-3 percent loan processing fees deducted. Also see gross.

Online Courses

Delivered via Penn State World Campus, online courses are offered in a time frame that is comparable to a traditional semester schedule, with fixed start and end dates. Course content and activities are available in electronic media. Internet access is required for course completion. Student aid may be available.

Origination Fee

Origination fees are loan fees paid to the bank to compensate them for the cost of administering the loan. The origination fees are charged as the loan is disbursed, and typically run approximately 0-5 percent of the amount disbursed. This fee is recouped by the federal government to compensate for loans in default.

Prepayment

Prepayment indicates that the borrower is paying off all or part of a loan before it is due.

Principal

The term principal refers to a sum of money borrowed, due, or used as a fund. The principal amount of your Federal Direct Stafford Loan is the total amount you have borrowed and must repay, with interest charges.

If you have chosen to capitalize the interest on an unsubsidized Federal Stafford Loan (rather than paying it quarterly as it accrues), the principal will include the amount you originally borrowed plus interest that has capitalized. When you graduate and use your grace period, you will then begin payments of principal and interest.

If you are using a subsidized Federal Direct Stafford Loan, the government will pay the interest on the principal amount while you are in school. Once you graduate or are no longer enrolled at least part-time and use your grace period, you will then begin payments of principal and interest.

Promissory Note

A promissory note is a legal contract requiring a borrower to repay a loan. When you sign a promissory note, you agree to repay the amount borrowed under the terms outlined in the promissory note. Repayment follows the grace period or deferment period that begins when you leave school or drop below half-time enrollment — even if you do not finish your program of study or obtain a job in your major. See also Master Promissory Note (MPN).

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