Effect of student loan indebtedness and repayment on resident physicians' cash flow. An analytic model.

Cumulative figures of "average medical student indebtedness," although meaningful, do not convey the effect of loan repayments on residents' cash flow, effect on a resident's value system and residency performance, and effect on trends in health care manpower allocation. Using a computer-based cash flow model, a "typical" house officer with $20,000 in undergraduate indebtedness who is training in a less expensive city will realize a $2390 deficit during internship and negative cash flow throughout a 5-year residency. House officers with extreme indebtedness (greater than $80,000) who are training in an expensive metropolitan area would accumulate an overall deficit approaching $75,000 or more, in excess of their undergraduate indebtedness, during a 5-year residency program. Effects of these findings on residency education and health care manpower issues, along with potential solutions for alleviating residents' cash flow problems, are discussed.