Summary: On the basis of its analysis of medical residents' debt scenarios, GAO concludes that requiring medical residents to begin repaying their Stafford loans could cause them financial hardship. Third- and fifth-year residents would use about 17 and 18 percent, respectively, of their gross income to meet student loan obligations. This would exceed 10 percent of gross income--a point at which the Department of Education considers educational debt to be unmanageable. Medical residents can, however, make their student loan debt more manageable by exercising debt relief options. For example, they could obtain forbearance of principle and interest for Stafford loan payments. Lenders, however, are not obligated to provide medical residents complete forbearance. While partial forbearance reduces residents' loan payments, it does not provide adequate debt relief under GAO's scenarios. To remedy this situation, the Department of Education plans to revise its regulations to require that lenders honor residents' requests for complete forbearance.
