Each year, the federal government makes a significant financial investment in the education and training of the U.S. physician workforce. A quarter of that physician workforce is composed of international medical graduates (IMG) and they include both U.S. citizens and foreign nationals. In fiscal year 2008, the federal government loaned $633 million to U.S. students enrolled in foreign institutions--including medical students--through the Federal Family Education Loan (FFEL) program. The government also makes a substantial domestic investment in the graduate training of the physician workforce. For example, in fiscal year 2008, federal support for residency training in the United States amounted to nearly $9 billion. As with medical students educated in the United States, this training is required of all IMGs--U.S. citizens and foreign nationals alike--who seek to practice medicine without supervision in the United States. The Department of Education (Education), which administers the federal student loan program, must also monitor foreign schools that seek to participate in the program with respect to specific statutory requirements. Among these is the statutory requirement that at least 60 percent of their students who take the U.S. medical licensing exam must pass the exam. Most recently, Congress increased the pass rate to 75 percent, effective July 2010. Little is known about IMGs with respect to how much they borrow overall, or the outcome of their medical studies, leading some policy makers to question the federal return on investment in IMGs. Therefore, Congress mandated that GAO study the performance of IMGs educated at these schools and other aspects of a foreign medical education, including the potential effect of the new 75 percent pass rate requirement on school participation in the federal loan program. This report examines the following questions: 1) What amount of federal student aid loan dollars has been awarded to U.S. students attending foreign medical schools? 2) What do the data show about the pass rates of international medical graduates on license examinations? 3) To what extent does Education monitor foreign medical schools' compliance with the pass rate required to participate in the federal student loan program? 4) What is known about schools' performance with regard to the institutional pass rate requirement? 5) What is known about where international medical graduates have obtained residencies in the United States and the types of medicine they practice?

In summary, we found the following: 1) From 1998 to 2008, U.S. students enrolled at foreign medical schools borrowed $1.5 billion in FFEL loans to attend free-standing medical schools. Although this amount represents less than 1 percent of all federal student loans borrowed during this period, borrowing has grown significantly, in part because of increases in tuition, student enrollments, and the availability of additional loan funds for graduate and professional students. 2) IMGs, as a group, have consistently passed their medical licensing exam at lower rates over the past decade than their U.S.-educated peers, but have narrowed this performance gap for most of the exam steps. 3) Education has not been able to fully enforce the institutional pass rate requirement needed for continued federal student loan eligibility. The three private organizations that administer each step of the exam have declined to release student scores on grounds that the data are proprietary in nature and should not be used for marketing purposes. As a result, Education reviews pass rates only when a school applies for the program, when it periodically seeks recertification, or when there is a change in ownership. 4) Our own analysis of 2008 pass rate data of institutions located in countries that participate in the federal loan program indicates that while a majority of foreign medical schools in these countries met the current 60 percent student pass rate requirement, very few--11 percent--would likely meet the newly required 75 percent pass rate. 5) IMGs have entered into residency programs in all states, though they are concentrated in the eastern United States, and a larger proportion tend to practice in primary care than do U.S.-educated graduates. Nationwide, in academic year 2008-2009 there were 109,482 medical residents, over 30,000 of whom were IMGs (about 27 percent). Overall, few significant differences exist between all IMGs and U.S.-educated physicians with regard to either disciplinary actions that would revoke or suspend their licenses or with regard to malpractice payments--and rates of disciplinary actions are low for physicians as a whole. GAO is making several recommendations to the Department of Education concerning the lack of student consumer data on foreign medical institutions and also the department's monitoring of pass rates for foreign medical schools whose students take the U.S. medical licensing exam. We provided a draft of this report to the Departments of Education and Health and Human Services (HHS). Education agreed with our recommendations and plans to collect consumer information on foreign medical schools. In its comments, HHS noted that increasing the pass rate requirement will adversely affect federal student loan availability for future students attending foreign medical schools, adding that IMGs contribute a significant percentage of primary care residents in the United States.