Informed Borrowing Confirmation: Modification of Approved Master Promissory Note Confirmation Processes – Operational Impacts to Schools and Preliminary COD System Information – IFAP
In this announcement, we are informing schools of a change to our approved Master Promissory Note (MPN) confirmation processes. Under Section 432(m)(1)(D)(i) of the Higher Education Act of 1965, as amended, students and parents may receive multiple Direct Loans under a single MPN through a confirmation process that we approve. Since the introduction of the MPN, we have permitted schools to have either an active or passive MPN confirmation process for Direct Subsidized Loans and Direct Unsubsidized Loans and have required schools to have an active confirmation process for Direct PLUS Loans. An active confirmation process requires a student or parent to take action to accept a loan made under an MPN before the school can disburse any loan funds. A passive confirmation process permits a school to disburse a loan after notifying the borrower that the loan will be made, unless the borrower requests otherwise by a deadline specified by the school.
All MPN confirmation processes will now require student and parent borrowers to view how much they currently owe in federal student loans, and to acknowledge that they have seen this amount before a school can make a first disbursement of the first Direct Loan that a student or parent borrower receives for each new award year.