A study was done to evaluate the ability of medical residents to repay their Stafford loan educational debt with a repayment deferment limit of 2 years. Using data on 1990 medical school graduates, the study compared medical residents' educational debt burdens to a financial hardship indicator keyed to loan default prevention. Results indicated 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 of their gross income to meet student loans obligations, exceeding the 10 percent considered to be unmanageable. In addition, the study found that residents could make their loan debt more manageable by exercising debt relief options such as obtaining forbearance of principal and interest for Stafford loans. Complete forbearance on Stafford loans would reduce debt burdens to 4 and 7 percent, reflecting student loan payments other than Stafford and comparable with those incurred by nonmedical borrowers. As lenders are currently not required to provide residents complete forbearance, the U.S. Department of Education plans to revise regulations to require lenders to honor such requests for complete forbearance. Appendixes contain the bulk of the report, with sections on methodology, three tables displaying the results, and a list of contributors to the report. (JB)