Student Loans:

Millions Loaned Inappropriately to U.S. Nationals at Foreign Medical Schools

HEHS-94-28: Published: Jan 21, 1994. Publicly Released: Jan 21, 1994.

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Pursuant to a congressional request, GAO reviewed the quality of education that U.S nationals receive at foreign medical schools, focusing on: (1) the adequacy of the Department of Education's efforts to approve foreign medical schools for participation in the federal student loan program; and (2) whether state medical boards have the information they need to assess the quality of education that foreign-trained physicians receive before granting them licenses.

GAO found that: (1) Education has not met statutory requirements to ensure that foreign medical schools are comparable to U.S. medical schools before authorizing their participation in the student loan program; (2) Education does not assess the adequacy of foreign medical schools' clinical training programs or the affiliations of the clinical facilities to which they send their students for training; (3) Education made $118 million in loans between 1986 and 1991 to students attending foreign medical schools, but it did not ensure that these schools met U.S. standards; (4) Education does not have adequate procedures to ensure that students attending unapproved schools are excluded from the student loan program; (5) Education relies predominantly on information supplied by foreign medical schools and does not conduct site visits to verify information on the quality of education at these schools; (6) foreign-trained medical students tend to score lower than U.S.-trained medical students on qualifying examinations; (7) Education has approved foreign medical schools that state medical boards have disapproved; (8) state medical boards often do not have the information they need to evaluate the quality of education at foreign medical schools because they lack sufficient resources and foreign schools are not required to cooperate with them; and (9) states have compensated for the lack of information on foreign schools by raising postgraduate training requirements for foreign medical school graduates, but they are under increasing pressure to treat all license applicants equally.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: In July 1997, based on recommendations of the Department of Education's National Committee on Foreign Medical Education Accreditation (NCFMEA), the Department of Education discontinued eligibility for federally guaranteed loans to students at 82 medical schools in 29 countries. At that time, Education also changed its student loan system used by guaranty agencies and lenders to ensure that the system identified whether the medical program of foreign schools was approved. Thus, all foreign schools with a medical program should have a marker in the student loan system to indicate to lenders and guarantors whether the medical program is approved, ensuring that loans are made only to students attending approved medical programs.

    Recommendation: The Secretary of Education should establish policies and procedures to help ensure that guaranteed student loans are made only to students attending medical programs that meet Education's standards.

    Agency Affected: Department of Education

  2. Status: Closed - Not Implemented

    Comments: Education's elimination of eligibility for student loans to attend virtually all foreign medical schools makes this recommendation no longer applicable.

    Recommendation: The Department of Education should require that foreign medical schools demonstrate that: (1) they have formal affiliation agreements with the facilities they use to train their students; and (2) their training facilities are equivalent to those that teach U.S. medical students.

    Agency Affected: Department of Education

  3. Status: Closed - Implemented

    Comments: The Department has developed and implemented criteria to trigger site visits to foreign medical schools. The Department has conducted several site visits and is currently taking action to remove the eligibility status for some of these schools.

    Recommendation: The Department of Education should establish criteria for triggering site visits to schools' campuses and clinical training facilities to review the schools' operations and facilities and verify information.

    Agency Affected: Department of Education

  4. Status: Closed - Not Implemented

    Comments: Education's elimination of eligibility for student loans to attend virtually all foreign medical schools makes this recommendation no longer applicable.

    Recommendation: The Secretary of Education should establish formal policies and procedures regarding the foreign medical school approval process.

    Agency Affected: Department of Education

  5. Status: Closed - Implemented

    Comments: Since the final regulations were published, notification and guidance was provided to lenders and guaranty agencies through a weekly status report that lists all changes in institutional status.

    Recommendation: The Secretary of Education should develop appropriate guidance for lenders and guaranty agencies.

    Agency Affected: Department of Education

  6. Status: Closed - Implemented

    Comments: The Department has created a separate team responsible for approving foreign schools consisting of four people to replace the one person who had this responsibility at the time of this report.

    Recommendation: The Secretary of Education should ensure that approving officials are knowledgeable and staff are properly supervised.

    Agency Affected: Department of Education

  7. Status: Closed - Implemented

    Comments: Education disagreed with the part of the recommendation about identifying foreign medical schools on the student's application. Education indicates that it will identify foreign medical schools through the school application process.

    Recommendation: The Secretary of Education should require applicants for loans to identify when they plan to attend a foreign medical school.

    Agency Affected: Department of Education

  8. Status: Closed - Implemented

    Comments: The Department's final regulation states that the failure of a foreign medical institution to provide, release, or authorize release of information required by regulation shall render the institution ineligible to apply for participation in the FFEL program.

    Recommendation: In cases of schools not cooperating with Education in providing information, Education should exercise its authority to prevent or terminate their continued eligibility in the guaranteed student loan program.

    Agency Affected: Department of Education

  9. Status: Closed - Not Implemented

    Comments: Education's elimination of eligibility for student loans to attend virtually all foreign medical schools makes this recommendation no longer applicable.

    Recommendation: Once Education's standards and processes have been improved, the Secretary of Education should share information that Education obtains on foreign medical schools with state medical boards for their use in evaluating the education of licensure applicants.

    Agency Affected: Department of Education

  10. Status: Closed - Implemented

    Comments: The Secretary has established an advisory panel called the National Committee on Foreign Medical Education and Accreditation. The Department published a final rule on April 28, 1994, that defines procedures and establishes standards that foreign medical schools must meet in order to participate in the Federal Family Education Loan (FFEL) Program.

    Recommendation: The Secretary of Education should improve the standards and processes used to determine the eligibility of foreign medical schools. Specifically, the Secretary, together with the congressionally mandated advisory panel of medical experts, should implement standards that are comparable to those that U.S. schools must meet.

    Agency Affected: Department of Education

  11. Status: Closed - Implemented

    Comments: Education has begun to identify what information it believes FSMB needs, and will provide that information when its work is completed. But it has not done this, and does not plan to do so, in collaboration with FSMB.

    Recommendation: The Secretary of Education should work with the Federation of State Medical Boards to determine which information that Education gathers would be of most use to the state boards.

    Agency Affected: Department of Education

 

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