Debt Management Assistance

The Association of American Medical Colleges (AAMC) has great debt management resources available free to residents.

The AAMC FIRST Medloans Organizer and Medloans Calculator offers individualized electronic loan portfolio debt management programs specially designed for medical residents, and allows borrowers to enter loan information and immediately calculate repayment options under standard, graduated, income based, income contingent, consolidated, and extended repayment options. In addition, the AAMC FIRST website also offers a wide range of resources specifically catered to medical students relating to debt management and loan repayment.  If you are having trouble making payments, please call your loan servicer or Annie Osborne, Resource Advisor, at the Student Financial Aid Office (415)476-4181.

Consequences of Default

Student loan defaults result from skipped, late, or nonexistent payments. The lender will seek reimbursement from the guarantee agency (and ultimately the federal government) who will pursue you for payment. When you default on your loans, the following things occur:

  • A negative credit history will be reported to a national credit bureau. This will affect your ability to buy a house or to get automobile loans, start-up loans for a practice, credit cards, or other financing.
  • The entire unpaid amount of your loan, including interest, may become immediately due and payable.
  • You can be taken to court.
  • Your Federal and State income tax refunds will be withheld.
  • Money can be taken out of your paycheck to repay delinquent loans. This is called garnishing your wages.
  • Any refunds due, from any state agency, can be collected by the state. This includes medical reimbursements to physicians.
  • State lottery prizes will be used to repay your defaulted loans first, before you receive any winnings.
A Final Word

If you start getting into trouble with your loan repayments, don't wait until it's too late to ask for help. Call your bank or your loan servicer if you don't understand the forms they send to you. If you can't get in touch with anyone or you aren't satisfied with the assistance you get, contact the UCSF Student Financial Services Office. We can help by calling lenders and servicers on your behalf and by explaining the various procedures and forms to you.

Avoiding Defaults

Defaults often result from communication problems that are easy to avoid if you know what to do.

File deferment forms promptly! Lending institutions don't know what you're doing unless you tell them via a deferment form. If some of your loans are with one bank and some with another lender, secondary market, or billing servicer, you need to file a deferment form with each agency. If all your loans are owned by the same agency but you've been given different account numbers, a single deferment form will not always update all your records. In this situation, you should ask your lender or servicer to put all your loans under one account number.

Incorrect addresses cause big problems. The bank (or servicer) uses whatever you listed as a permanent address on your loan application. If you move (or your parents move, if that's the address you used) you must contact the holder of your loans immediately. You need to do this every time you move.

Be sure to open all your mail from your lender or service agency right away! If mail is being sent to a permanent address where you do not reside, be sure that all your mail is forwarded immediately.

When you send correspondence or loan payments, be sure to include your account number (if known) and social security number on all your documents. If your name isn't imprinted on a check or form, be sure to add it. Type or print this information so it is legible.

If you call your lender or servicer, keep a phone log. Get the name of the person you talked to, and follow up your conversation with a letter of confirmation. As always, keep a copy for your files.