Federal Stafford Loan Master Promissory Note (Page 2 of 8) in pdf

Master Promissory Note

(continued)

Disclosure of Loan Terms

identified in the disclosure statement, which will be deducted

If I default, the default will be reported to all national credit

proportionately from each disbursement of my loans. I

bureaus and will significantly and adversely affect my credit

This MPN applies to both subsidized and unsubsidized

understand the origination and guarantee fees may be

history. I acknowledge that a default shall have additional

Federal Stafford Loans described in the Interest section

refundable only to the extent permitted by the Act.

adverse consequences to me as disclosed in the Borrower’s

below. I agree that the lender may sell or assign this MPN

Rights and Responsibilities Statement. Following default, the

and/or my loans and acknowledge that any loan may be

Late Charges and Collection Costs

loans may be subject to income-contingent repayment

assigned independently of any other loan to which this MPN

(including potential collection of amounts in excess of the

The lender may collect from me: (i) a late charge for each

applies. I agree that each loan is separately enforceable

principal and interest) in accordance with the Act.

late installment payment if I fail to make any part of a

based on a true and exact copy of this MPN. Loans

required installment payment within 15 days after it

disbursed under this MPN are subject to the annual and

Governing Law and Notices

becomes due, and (ii) any other charges and fees that are

aggregate loan limits specified in the Higher Education Act

permitted by the Act for the collection of my loans. If I

The terms of this MPN will be interpreted in accordance

of 1965, as amended, 20 U.S.C. 1070, et seq., and applicable

default on any loans, I will pay reasonable collection fees

with the applicable federal statutes and regulations, and

U.S. Department of Education regulations (collectively referred

and costs, plus court costs and attorney fees.

the guarantor’s policies. Applicable state law, except as

to as the “Act”). Under this MPN, the principal amount that

preempted by federal law, may provide for certain borrower

I owe, and am required to repay, will be the sum of all

Repayment

rights, remedies, and defenses in addition to those stated in

disbursements issued (unless I reduce or cancel any

this MPN.

disbursements as provided below).

I must repay the full amount of the loans made under this

MPN and accrued interest. Federal Stafford Loans have a

If a particular loan under this MPN is made by the school, or

My lender will determine whether to make any loan under this

repayment grace period, which will be disclosed in my

if the proceeds of a particular loan made under this MPN are

MPN after my loan eligibility is determined by the school

disclosure statement. I will repay the principal of each loan

used to pay tuition and charges of a for-profit school that

where I am enrolled on at least a half-time basis. At or before

in periodic installments during a repayment period that

refers loan applicants to the lender, or that is affiliated with

the time of the first disbursement for each loan, a disclosure

begins on the day immediately following the end of the

the lender by common control, contract, or business

statement will be sent to me identifying the amount of the loan

applicable grace period. Payments submitted by me or on

arrangement, any lender holding such loan is subject to all

and additional terms of the loan. Important additional

my behalf (exclusive of refunds) may be applied first to

claims and defenses that I could assert against the school

information is also disclosed in the Borrower’s Rights and

charges and collection costs that are due, then to accrued

with respect to such loan. My recovery under this provision

Responsibilities Statement accompanying this MPN. The

interest that has not been capitalized, and finally to the

shall not exceed the amount I paid on such loan.

Borrower’s Rights and Responsibilities Statement and any

principal amount.

disclosure statement I receive in connection with any loan

If I reside in the state in which the principal office of the

under this MPN are hereby incorporated into this MPN.

I understand that the school’s certification of my loan

guarantor is located, the guarantor may sue to enforce the

eligibility determines whether my loans must be repaid as

applicable loans in the county in which the guarantor’s office

I may request additional loan funds for my educational costs

subsidized and/or unsubsidized loans.

is located. However, if I object to being sued there and I mail

(up to the annual and aggregate loan limits). If my school

a written objection to the guarantor that is postmarked no

determines that I am eligible for any additional or adjusted

The lender will provide me with a repayment schedule that

later than 30 days after I am served with the suit, the

loan amount, my school may certify such amount. My

identifies my payment amounts and due dates. Except as

guarantor will either have the court transfer the suit to the

eligibility for subsidized and/or unsubsidized loans may

otherwise provided in the Act, the minimum annual payment

county in which I live or will dismiss the lawsuit.

change based on changes in my financial circumstances.

required on all my FFELP loans is $600 or the amount of

My school will notify me of any changes in my eligibility.

interest due and payable, whichever is larger. My lender

Any notice required to be given to me will be effective if

I will be notified of any changes or additions to my

must provide me with a choice of repayment plans

sent by first class mail to the latest address the lender has

subsidized and/or unsubsidized loans in a separate

consistent with the provisions of the Act.

for me or by electronic means to an electronic address that I

disclosure statement.

have provided. I will immediately notify the lender of any

If I am unable to make my scheduled loan payments, the

change of address or status as specified in the Borrower’s

Loan Cancellation

lender may allow me to reduce my payment amount, to

Rights and Responsibilities Statement. Failure by the lender

extend the time for making payments, or to temporarily

I may pay back all or a part of a disbursement within

to enforce or insist on compliance with any term on this

stop making payments as long as I intend to repay my loan.

timeframes set by the Act, as explained in the Borrower’s

MPN shall not be a waiver of any right of the lender. No

Allowing me to temporarily delay or reduce loan payments

Rights and Responsibilities Statement or other disclosure

provision of this MPN may be modified or waived except

is called forbearance. The lender may align payment dates

statement I receive at or before disbursement. In such case,

in writing. If any provision of this MPN is determined to

on my loans or grant me a forbearance to eliminate a

the origination fee and guarantee fee will be reduced or

be unenforceable, the remaining provisions shall remain

delinquency that persists even though I am making

eliminated in proportion to the amount of the disbursement

in force.

scheduled payments.

returned within those timeframes. I will not have to pay

interest charges if I return the full loan amount as provided

I may prepay all or any part of the unpaid balance on my loans

in the Act.

at any time without penalty. If I do not specify which loans I

am prepaying, the lender will determine how to apply the

Interest

Notice About Subsequent Loans

prepayment in accordance with the Act. Upon repayment in

Made Under This Master Promissory Note

full of each loan under this MPN, I agree to accept written

Unless my lender notifies me in writing of a lower rate(s),

notification of such loan payoff in place of receiving the

the rate(s) of interest for my loans are those specified in

original MPN.

the Act. The interest rate information is presented in the

This Master Promissory Note authorizes the lender to

Borrower’s Rights and Responsibilities Statement

disburse multiple loans during the multi-year term of

Acceleration and Default

accompanying this MPN. The interest rate is presented

this MPN upon my request and upon the school’s

in a disclosure statement that is issued to me.

At the option of the lender, the entire unpaid balance of the

certification of my loan eligibility. Subsequent loans

applicable loan(s) made under this MPN will become

may be made under this MPN for the same or

Interest accrues on the unpaid principal balance of each loan

immediately due and payable, (this is called “acceleration”),

subsequent periods of enrollment only at schools

from the date of disbursement by the lender until the loan is

upon the occurrence of any one of the following events:

designated by the Secretary of the U.S. Department of

paid in full. I agree to pay all interest charges on my

(i) I fail to enroll as at least a half-time student at the school

Education.

subsidized Federal Stafford Loans except interest payable by

that certified my loan eligibility, (ii) I fail to use the proceeds

the federal government under the Act. I agree to pay all

of the loan solely for educational expenses, (iii) I make a

I understand that no subsequent loans will be made

interest charges on my unsubsidized Federal Stafford Loans.

false representation(s) that results in my receiving a loan

under this MPN after the earliest of the following dates:

If I fail to make required payments of interest before the

for which I am not eligible, or (iv) I default on the loan.

(i) the date my lender receives my written notice that no

beginning or resumption of principal repayment, or during a

period of deferment or forbearance, I agree that the lender

further loans may be disbursed under the MPN; (ii) one

The following events shall constitute a default on my loan:

may capitalize such interest as provided under the Act. There

year after the date of my signature on this MPN if no

(i) I fail to pay the entire unpaid balance of the applicable

is no federal interest subsidy on unsubsidized loans, so the

loans after the lender has exercised its option under items

disbursement is made during such twelve month

total amount of interest I am required to repay on

(i), (ii), or (iii) in the preceding paragraph; (ii) I fail to make

period; or (iii) ten years after the date of my signature

unsubsidized loans will be higher than on subsidized loans.

installment payments when due, provided my failure has

on this MPN or the date the lender receives this MPN.

persisted for at least 270 days for payments due monthly or

Origination Fee and Guarantee Fee

330 days for payments due less frequently than monthly; or

Any amendment to the Act governs the terms of any

(iii) I fail to comply with other terms of the loans, and the

For each subsidized and unsubsidized loan, the federal

loans disbursed on or after the effective date of such

lender or guarantor reasonably concludes I no longer intend

government charges an origination fee equal to the amount

amendment, and such amended terms are hereby

to honor my repayment obligation. If I default, the guarantor

required by the Act. The guaranty agency(ies) that

incorporated into this MPN.

may purchase my loans and capitalize all then-outstanding

guarantee(s) my loan(s) (in each case, the “guarantor”) may

interest into a new principal balance, and collection fees will

charge a per loan guarantee fee not to exceed a maximum

become immediately due and payable.

amount specified in the Act. I will pay these fees, as

Federal Stafford Loan Master Promissory Note Page 2

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