Managing Medical School Debt

 After graduating from medical school, Jerome Naradzay, MD, faced a dilemma familiar to many interns and residents - finding the time to organize his student loan file and keep up with all of the paperwork.

"When a resident leaves medical school the focus is on work and having some semblance of a regular life. They may be working 80 to 100 hours a week. But this is also the time when a physician must begin to keep track of student loans, comply with reporting regulations, or chart a consolidation and repayment plan. And accurate student loan information is needed for rental agreements, auto loans or any application that requires a credit history," says Naradzay, who practices emergency medicine at Samaritan Medical Center in Watertown, NY.

With the help of his brothers - one a business manager and one a credit analyst - Naradzay came up with a time-saving system for organizing his own student loan file. That system is now available to others through the Loan Information Network Company (L.I.N.C.), which helps physicians avoid repayment problems by organizing their student loan information when they may be too busy to organize it themselves.

The Association of American Medical Colleges reports that the median debt for 1996 medical school graduates was $65,000 at public and $92,000 at private medical schools. And there are usually more than a dozen lenders involved.

"Keeping track of a student loan is like trying to track a tornado. There are layers of administration involved in the student loan business that are confusing," Naradzay explains. "There's an inherent complexity to the system. The loan is not just from a lender, there's a guarantee agency involved. Every few months loans are bought and sold by agencies in a secondary market. And when a loan is sold, the account number may change. This happens often enough to cause confusion for an intern or resident no matter how responsible they are trying to be."

Moves, a name change, new residencies and fellowships must all be reported to each lender. And while a resident's schedule doesn't allow much time for the kind of homework required to keep up with loan information, it's important not to procrastinate, because when it comes to student loans, time is money.

While only 5 percent of physicians ever default on their student loans, Naradzay says that it's not uncommon for residents to receive derogatory credit reports as a result of late payments. Even without default there can be penalties, late fees and missed opportunities for deferments.

And the problem is usually time, not money.

L.I.N.C. provides physicians help with preparing student loan reports, reducing the risk of default, and using deferment and consolidation to best advantage. The cornerstone of L.I.N.C.'s service is the Assessment and Evaluation Process, which includes an exhaustive review of the physician's existing loan file.

During the Assessment and Evaluation Process, L.I.N.C.:

  • Organizes files as presented by the physician;

  • Identifies deficiencies, errors and omissions;

  • Summarizes current loan status; and

  • Lists current loan servicing centers.

L.I.N.C. gathers information from various sources, verifies loan data, and provides the client with a succinct loan report.

"Residents send me the information and I do the detective work to figure it out. We send authorization to secondary lenders to authorize me to access their account," Naradzay explains. The time from the initial call to the finished report can be as short as ten days or as long as two months for a more complicated situation. The cost is the same in all cases: $125.

L.I.N.C. has clients from all specialties, some with loans from as many as 31 different lenders. "We teach residents how to manage their student loan debt. We provide the summary report and explain to the resident how to track the loans. They can then use the report as a reference for tracking and repaying their loans," Naradzay says.

L.I.N.C. can be contacted by e-mail at or by phone at (888) 432-5462.

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