College can be expensive, which is why students frequently turn to financial aid to help cover the costs of tuition, student fees, books and room and board. Financial aid packages often comprise scholarships, grants and student loans. Unlike scholarships and grants, student loans must be repaid. Signing a promissory note is a key step that must be completed before receiving student loan funds. After you sign the promissory note for student loans, what happens may depend on your individual situation although there are general procedures in place.

Promissory Notes

Promissory notes formalize the information that you will be receiving student loan funds and that you confirm your intention to repay these loans, with interest, within a given time frame. Students can often complete promissory notes online; the process takes about 30 minutes. You’ll need to provide your federal PIN number (for signing promissory notes on government loans) and personal information including name, contact information and the names and contact information for personal references. Students who prefer to sign hard copies of their promissory note can visit their school’s financial aid office.


State laws may require your school to demand that you complete financial aid counseling prior to receiving funds. Financial aid counseling educates students so they understand the seriousness involved with taking out thousands of dollars in loans that must be repaid. You may be encouraged to steer clear of taking out the maximum loan amount allowed, budget carefully to avoid running out of funds needed to cover tuition and housing, and learn the risks involved with not repaying your student loans. Some schools offer financial aid counseling workshops; other colleges permit students to complete counseling online. After the counseling, you may be required to take and pass a short exam demonstrating that you understand the basic concepts and risks involved in taking out student loans.


Once you’ve signed the promissory note, the U.S. Department of Education must receive and acknowledge the document, ensuring that information has been entered fully and correctly. Once the promissory note has been processed, your school’s financial aid office will be notified that your student loan may be disbursed.


Depending on your school’s student loan release policy, you may receive your student loan check in person, through the mail or directly through your bank account after signing the promissory note. You may receive student loans for less than what you originally sought; colleges frequently deduct tuition and student fees from your student loan prior to disbursing to guarantee payment.

Future Loans

After you sign the promissory note for your student loans, that document acts as an umbrella document for future student loans taken out in your name, according to Student You won’t need to fill out another promissory note for student loans taken out to pay for college education in subsequent years. For example, if you sign a promissory note as a college freshman for student loans, the note will cover loans taken out throughout the rest of your tenure as an undergraduate college student. Exceptions include when you change schools, if your education lasts longer than 10 years or you change lenders, according to Sallie Mae.

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