United States General Accounting Office 

Report to Congressional Committees 

January 1994 STUDENT LOANS 

Millions Loaned 

Inappropriately to U.S. 

Nationals at Foreign 

Medical Schools 

GAOLHEHS-94-28 
1 Notice: This is a reprint of a GAO report. 1 
Health, Education, and 

Humau Services Division 

B-249883 

January 21,1994 

The Honorable Edward M. Kennedy, Chairman 

The Honorable Nancy L. Kassebaum 

Ranking Minority Member 

Committee on Labor and Human Resources 

United States Senate 

The Honorable Sam Nunn, Chairman 

The Honorable William V. Roth 

Ranking Minority Member 

Permanent Subcommittee on Investigations, 

Committee on Governmental Affairs 

United States Senate 

The Honorable William D. Ford, Chairman 

The Honorable William F. Goodling 

Ranking Minorily Member 

Committee on Education and Labor 

House of Representatives 

At the request of the Chairman, Subcommittee on Health and Long-Term Care, House Select 

Committee on Aging, we conducted a follow-up to our 1980 and 1985 reports related to U.S. 

citizens who obtain medical degrees in foreign medical schools. The Subcommittee requested 

that we review (1) the U.S. Department of Education’s efforts to assess the quality of education 

that U.S. nationals receive at foreign medical schools and (2) the need for state medical boards 

to have better information to assess the qualiw of education of foreign-trained physicians 

before granting them licenses. 

As you know, the requesting Select Committee on Aging was not reauthorized for the 1993 fiscal 

year. Accordingly, we are reporljng our findings to committees that have either legislative 

jurisdiction over or recent oversight interest in Department of Education programs. 

We have obtained comments on the report from the Secretary of Education and the Federation 

of State Medical Boards and have incorporated these comments in the report, This report was 

prepared under the supervision of David P. Baine, Director of Federal Health Care Delivery 

Issues. If you or your staffs have any questions concerning this report, please call him on 

(202) 512-7101. Other major contributors to this report are listed in appendix VI. 

Janet L. Shikles 

Assistant Comptroller General 
Executive Summary 

Purpose congressional investigations in the mid-1980s found that some Caribbean 

medical schools wereinvolved in selling fraudulent medical school 

diplomas. Because of continuing congressional concerns about this issue, 

GAO was asked to review federal and state efforts to assess the quality of 

education that U.S. nationals receive at these schools. Specifically, GAO 

sought to determine 

. the adequacy of the Department of Education’s efforts to approve foreign 

medical schools for participation in the federal student loan program and 

. whether state medical boards have the information they need to assess the 

quality of the education that foreign-trained physicians receive before 

granting them licenses. 

Also, during this work, GAO was made aware of and reviewed an allegation 

that an approved foreign school was granting medical degrees 

inappropriately. (See appendix II for detailed review results.) 

Background US, and Canadian medical schools are accredited by the Liaison 

Committee on Medical Education (LCME) to ensure that they meet national 

standards of education. LCME accreditation is reqtied for these schools to 

be eligible to participate in federal loan programs In 1992, an estimated 

4,406 to 6,660 U.S. students attended medical schools outside the United 

States and Canada, primarily in Caribbean countries and Mexico. 

However, most foreign medical schools do not have an accreditation 

process comparable to LCME’S.’ 

The U.S. Department of Education (hereafter Education) indirectly 

supports foreign medical programs through guaranteed loans to students 

who attend them.2 By law, before it can make loans to these students, 

Education must approve the schools that they attend and ensure their 

comparability with medical schools in the United States. In addition, if 

foreign medical schools wish to participate in the federal student loan 

program, they must provide information to Education, which is used to 

determine whether the schools meet Education’s standards. These 

standards include such requirements as that the schools’ instruction 

periods be at least 32 months long and closely supervised. 

‘For purposes of this report, the phrase “foreign medical schools” refers to medical schools outside the 

United States, its possessions, and Canada 

2The Department of Veterans Affairs also pays educational benefits to eligible veterans and their 

families to attend these schools; however, the aggregate amount of benefits paid is small. 

Pee 2 GAO/HEHS-94-28 Foreign Medical School Student Loans 
Once a graduate of a foreign medical school passes a standard medical 

knowledge examination administered by the Educational Commission for 

Foreign Medical Graduates (ECEMG) and receives ECFMG certification, he or 

she can enter the U.S. health care delivery system and complete 

requirements to seek a license to practice medicine. To uphold the 

standards for licensure set by each state, state medical licensing boards 

evaluate the education and training of medical school graduates, including 

those from foreign medical schools. American Medical Association (AMA) 

data show that in 1992 about 39,000 or 6 percent of the nation’s physicians 

were U.S. citizens who had received medical degrees abroad. 

During its review, GAO obtained information from Education, ECFMG, the 

Federation of State Medical Boards (FSMB), LCME, the National Board of 

Medical Ekadners (NEIME), Association of American Medical Colleges 

(AAMC), AMA, the American Hospital Association (AHA), 19 stati licensing 

boards in states thought to be either approving foreign medical schools or 

regulating the clinical training of foreign medical students at hospitals in 

the state, 20 foreign medical schools in the West Indies and Mexico 

(schools that most U.S. citizens attended), and 74 hospitals or other 

medical facilities that were thought to be training medical students from 

foreign medical schools. To assess Education’s standards and processes 

for reviewing and approving foreign medical schools and its guidance to 

lenders and guarantee agencies on which schools were approved, GAO 

reviewed Education’s files on the 91 currently approved foreign medical 

schools and contacted three agencies responsible for guaranteeing student 

loans. 

Results in Brief Education has not met its statutory responsibility to ensure the 

comparability of foreign medical schools to schools in the United States 

before authorizing their participation in the student loan program. As a 

result, GAO estimates that Education made $118 million in loans between 

1986 and 1991 to students attending foreign medical schools without 

assuring that the schools met U.S. standards. This happened for three 

reasons: 

1. Education’s standards for assessing foreign medical schools are not 

adequate to assure that these schools are comparable to U.S. schools. In 

particular, Education does little to assess the clinical training of foreign 

medical students. 

2. Education has done little to enforce the few standards it has in place. 

Page 3 GAOITIIEHS-94-28 Foreign Medical School Student Loans 
Executive Summary 

3. Education’s procedures do not ensure that students attending 

unapproved schools are excluded from receiving loans. 

State medical boards are often unable to get information they need to 

evaluate the education of foreign-trained physicians before licensing them, 

mainly due to a lack of resources but also the schools’ failure to 

cooperate. Unlike Education, with which schools must cooperate or risk 

losing student loan eligibility, foreign medical schools have little incentive 

to provide information to state boards. As a result, educationally 

underquaLified physicians may be entering the mainstream of American 

medicine. 

Many states have tried to compensate for the lack of information on 

foreign schools by raising the postgraduate training requirements for 

graduates of these programs above those for U.S. program graduates. 

However, states are under increasing pressure from foreign medical 

associations and others not to treat these graduates differently than their 

U.S.-trained counterparts. 

Principal Findings 

Education Standards for Education’s standards for approving foreign medical schools to participate 

Approving Schools Do Not in the student loan program address only a portion of the standards for 

Assure CompazHlity medical education covered in the U.S. accreditation process. As a result, 

Education has approved schools that do not meet state medical board 

standards. 

A critical departure from the U.S. accreditation process is that Education 

does little to assess the adequacy of foreign schools’ clinical training 

programs-the “clerkships” in hospitals and clinics that give students vital 

experience in diagnosing and treating patients. Lacking training facilities 

in their own country, many schools often attended by U.S. citizens send 

their students to U.S. clinics or hospitals. GAO found that over onehalf of 

the known U.S. facilities training foreign medical students were not 

afiXated with U.S. medical schools or had only limited affiliations for brief 

or unique rotations. Further, unlike requirements of facilities affiliated 

with U.S. medical schools, 61 percent of the U.S. facilities training foreign 

medical students did not have formal afbhation agreements to help ensure 

Page 4 GAO/HEHS-94-28 Foreign Medical SchooI Student Loans 
Executive Summary 

that students were supervised and educational objectives were met. (See 

pp. 18 to 22.) 

Education Does Little to 

Enforce Its Standards 

Guaranteed student loans are made to hundreds of students attending the 

91 approved foreign medical schools,3 although Education has not assured 

that these schools meet its standards. In applying its standards, Education 

relies almost exclusively on information submitted by the schools. Also, 

although almost 90 percent of such student loan funds go to as few as 10 

schools, Education does not conduct site visits to verily data provided by 

the schools. Education’s enforcement problems included 

. not enforcing its requirement that schools reapply for eligibility every 2 

years. Schools were allowed to continue their eligibility after 2 years 

without reapplying. Consequently, the eligibility period for 88 of the 91 

approved schools in 1992 had expired. 

. not consistently applying standards to the schools it approved. Education 

did not document the basis for approval for 60 of the 91 approved foreign 

medical schools. 

Education’s lack of enforcement was further complicated by the 

unavailability of certain e xamination data, The Higher Education Act, as 

amended in 1986, mandates that participating foreign medical schools 

show that their graduates achieve a certain pass rate on 

EcFMGadministered medical knowledge examinations or meet Other 

qu&fying criteria. In the past, ECFMG has not released pass-rate data on 

individual schools due to concerns of its misuse or misinterpretation. 

However, summary data of the pass rates for U.S.- and foreign-trained 

students show that U.S. citizens who attend foreign medical schools 

perform on average below the required 50 percent on EcFMGadministered 

and other medical knowledge examinations and pass at a rate significantly 

lower thsn their U.S.-trained counterparts. (See pp. 22 to 27.) 

Inattention to Program 

Requirements Results in 

Improper Student Loans 

Management problems at Education have resulted in loans being made to 

students attending medical schools that Education has neither reviewed 

nor approved. For example, Education cannot distinguish between 

students applying to foreign medical schools and students applying to 

other schools or programs of a larger foreign university. Education is 

required, nonetheless, to apply specific standards to foreign medical 

schools that are not required of other schools. (See pp. 30 to 32.) 

3Education had no record since 1983 of any foreign medical schools that it had disapproved 

Page 5 GAO/HEHS-94-28 Foreign Medical School Student Loams 
Executive Summary 

Education Approved 

Foreign Medical Schools 

That States Disapproved 

Education’s inadequate standards and lack of enforcement effectiveness 

led to its approving four schools that state medical boards had 

disapproved. One such school was one of several related Dominican 

Republic schools brought to GAO’S attention through allegations made by a 

former student of one of the schools. In investigating the allegations, GAO 

found that Education had allowed another school to inappropriately 

“adopt” this school’s approval status. Court documents indicated that this 

second school’s academic advisor had pleaded guilty in one state to 

practicing medicine without a license and was charged in a second state 

with financial exploitation of the elderly, practicing medicine without a 

license, and grand theft. During GAO’S follow-up of the student’s allegations, 

several students told us or provided evidence that 

l the Education-approved school’s academic advisor had been the dean of 

another Dominican Republic school that granted medical degrees after a 

few months of study and 

l the academic advisor was also a major player in administering the 

Education-approved Dominican Republic school and was offering the 

same program there. (See pp. 27 to 30.) 

State Medical Boards Lack State medical boards are charged with issuing licenses to those physicians 

Information on Foreign deemed competent to provide safe and effective general medical care. The 

Schools’ Quality standards that state boards use are not uniform, but generally include 

three broad areas: education, examination, and experience through 

graduate (residency) training. 

States have difbculty assessing the quality of the education of graduates of 

foreign medical schools. Twice during the 198Os, FSMB, representing all 

state medical boards in the United States and its territories, sought 

information on the medical education provided by certain foreign medical 

schools. Both times, FSMB abandoned the effort after most of the schools 

contacted refused to cooperate. Generally, the schools that FSMB surveyed 

had received student loans between 1986 and 1991. 

Lacking any other information, at least 14 state medical boards have 

attempted their own on-site or questionnaire-based assessments of foreign 

medical schools. These efforts have been largely unsuccessful, px?marily 

due to a lack of state resources or cooperation from the schools. 

Some states have attempted to compensate for the lack of information on 

education quality by raising requirements for graduate-level training for 

Page 6 GAOAEHS-94-28 Foreign Medical School Student Loans 
Executive Sammary 

foreign-trained applicants. However, states have been under pressure by 

foreign medical associations and others to treat all applicants equally and 

set the same experience standards for foreign- and U.S.-trained applicants. 

States have faced lawsuits charging civil rights violations against foreign 

medical students, and federal legislation has been introduced several times 

to prohibit states from treating foreign and U.S. medical graduates 

differently. (See pp. 36 to 40.) 

Recommendations This report contains recommendations to improve Education’s standards 

and processes for assessing foreign medical schools. Once Education 

improves these standards and processes, we recommend that the 

Secretary of Education share the information that Education obtains on 

schools’ quality with state medical boards. In addition, Education should 

disqualify from participating in the student loan program any schools that 

fail to provide the needed information. 

Agency Comments GAO obtained written comments from Education and JBMB. Education 

-agreed with GAO’S recommendations and described regulations and other 

planned steps that it is taking to correct the problems identified in the 

report. FSMB also agreed with GAO’S recommendation and stated that the 

study validated the many complex problems facing licensing boards in 

their attempts to assess the quality of medical education delivered by 

foreign medical schools. 

Page 7 GAOIB[EHS-94-28 Foreign Medical School Student Loans 
Contents 

Executive Summary 2 

Chapter 1 

Introduction Federal, State, and Private Involvement in Assessing U.S. and 

Foreign Medical Education 

Incidence of Foreign-Trained Medical Students and Graduates 

U.S. Nationals Most Often Attend Caribbean and Mexican 

Medical Schools 

13 

14 

Past Concerns Related to U.S. Citizens Attending Foreign Medical 

Schools 

Scope and Methodology 

15 

16 

Chapter 2 18 

Education Improperly Education’s Standards for Approving Foreign Medical Schools 18 

Are Not Adequate 

Guaranteed Millions Education Has Not Enforced Its Standards 22 

in Loans to Students Education Has Approved Schools That State Medical Boards 27 

of Foreign Medical Have Disapproved 

Schools 

Inattention to Program Requirements Results in Student Loan 30 

Program Participation by Unapproved Medical Schools 

Loans to Foreign Medical Schools Total Tens of Millions Annually 32 

Conclusions 32 

Recommendations to the Secretary of Education 33 

Agency Comments 34 

Chapter 3 36 

State Medical Boards FSMB and Individual States Unable to Obtain Information on 36 

Lack Information to 

Foreign Medical Programs 

State Medical Boards Under Pressure to Set the Same Standards 38 

Evaluate Education of for U.S.- and Foreign-Trained Physicians 

Foreign-Rained 

Conclusions 

Recommendations 

40 

40 

Applicants for 

Licensure 

FSMB Comments 

Education Comments 

40 

40 

Appendixes Appendix I: History of Examinations Given to Foreign- and 

U.S.-Trained Physicians 

42 

Appendix II: Education Approved Medical School in Santo 

Domingo in Violation of Eligibility Rules 

46 

Page 8 GAOBEHS-94-28 Foreign Medical School Student Loans 
Contents 

Appendix IIk Methodology for Calculating Estimates of Loans 

Guaranteed 

52 

Appendix II? Comments From the Department of Education 

Appendix V: Comments From the Federation of State Medical 

Boards of the United States, Inc. 

53 

59 

Appendix VI: Major Contributors to This Report 60 

Tables Table 1.1: United States-, Canadian-, and Foreign-Educated 

Physicians in the United States 

14 

Table 1.2: Foreign Medical Schools Receiving the Most 

Guaranteed Student Loans 

15 

TabIe 2.1: Assessment Standards and Their L&nitations for 

Measuring the Comparability of Education and Training at U.S 

and Foreign Medical Schools 

19 

Figures Figure 2.1: Pass Rates on the NBME Examination, Part I 

Figure 2.2: Pass Rates on the NBME Examination, Part II 

Figure 1.1: Pass Rates on the FLEX Examinations 

Figure 1.2: Pass Rates on the FMGEMS Examination, Day 1 

. 

Figure 1.3: Pass Rates on the FMGEMS Examination, Day 2 

26 

27 

43 

44 

45 

Abbreviations 

AAMC 

AHA 

AMA 

BWIMC 

CONES 

ECF’MG 

FMGEMS 

Association of American Medical Colleges 

American Hospital Association 

American Medical Association 

British West Indies Medical College 

Consejo National de Education Superior 

Educational Commission for Foreign Medical Graduates 

Federation Licensing Examination 

Foreign Medical Graduate Examination in the Medical 

Sciences 

FSMB Federation of State Medical Boards 

HHS Department of Health and Human Services 

LCME Liaison Committee on Medical Education 

NBME National Board of Medical Examiners 

lJl?HEX Universidad Federico Henriquez Y Carva,jal School of 

Medicine 

TJMD 

WSMLFI 

Universidad Mundial Dominicana 

United States Medical Licensing Examination 

Page 9 GAOAEHS-94-28 Foreign Medical School Student Loans 
Chapter 1 

Introduction 

In 1992, about 39,000 (6 percent) of all physicians in the United States 

were U.S. citizens with medical degrees from foreign medical schools. 

Most U.S. citizens who receive medical training abroad attend schools in 

the Caribbean Basin1 or Mexico and many receive student loans 

guaranteed by the U.S. government. While many medical schools outside 

the United States and Canada are considered excellent, we found that in 

the 1980s education and training at some schools frequently attended by 

U.S. nationals were signiscantiy inferior in resources and facilities to 

those of U.S. medical schook2 In addition, congressional investigations in 

the mid-1980s revealed that some medical schools in the Caribbean Basin 

were selling fraudulent medical school diplomas. 

Federal, State, and 

Private Involvement 

in Assessing 

Foreign Med 

Education 

Several federal, state, and private organizations provide checks on the 

quality of education that medical school graduates receive before they 

enter the U.S. health care delivery system. The federal role is carried out 

U.S. and primarily through the U.S. Department of Education’s (hereafter 

ical Education) assessments of foreign medical schools. Education assesses 

the schools to approve their participation in the federally supported 

student loan program. State medical boards assess the qualifications of 

US.- and fore@-trained physicians in determining whether to grant them 

licenses to practice medicine in their state. Two private organizations also 

are principaJly involved in these activities. The Liaison Committee on 

Medical Education (LCME) accredits U.S. and Canadian medical schools, 

and the Educational Commission for Foreign Medical Graduates (ECFMG) 

administers standard medical knowledge examinations to foreign-trained 

physicians seeking to enter the U.S. heakh care delivery system. 

U.S. Department of 

Education 

Education is responsible for approving the participation of foreign-medical 

schools in the federal government’s Federal Family Education Loan 

Program, known as the guaranteed student loan program. The Higher 

Education Act of 1965, as amended, provides for guaranteed student loans 

to be made to students by lenders, guaranteed by state-designated 

guaranty agencies, and ultimately insured (termed reinsurance) by the 

federal govenunent, The program originally did not provide loans to 

‘For purposes of this report, countries in the Caribbean Basin include Antigua and Barbuda (estimated 

mid-1992 population, lOO,OOO), Dominica (estimated mid-1992 population, lOO,OOO), the Dominican 

Republic (estimated mid-1992 population, 7.5 million), Grenada (estimated mid-1992 poption, 

lOO,OOO), and St. Lucia (estimated mid-1992 population, 200,000). 

2Policies on U.S. Citizens Studying Medicine Abroad Need Review and Reappraisal (GAOEIRD41-32, 

flov. 21,1980), and Federal, State, and Private Activities Pertaining to U.S. Graduates of Foreign 

Medical Schools (GA O/HR D 611 , 

Page 10 GAOELEHS-94-28 Foreign Medical School Student Loans 
Chapter 1 

Introduction 

students attending foreign schools. In 1966, however, the statutory 

language was amended to extend the benefits to students at “any 

institution outside the States which is comparable” to eligible institutions 

otherwise defined in the Higher Education Act. 

Partly in response to concerns about the quality of education at foreign 

medical schools, the Congress passed the Higher Education Amendments 

of 1986. The amendments built on the earlier requirement that Education 

assure the comparability of foreign medical schools to U.S. schools before 

approving their participation in the student loan program. Specifically, the 

Congress required that the Secretary of Education include certain 

requirements in its criteria to assure the comparability of foreign medical 

schools. For example, foreign medical schools must either show that at 

least 60 percent of their student enrollment is composed of nationals of 

the country where the school is located or that U.S. nationals attending the 

school achieve a pass rate on the medical knowledge examinations 

adminMered by ECTM~ of 45 percent in the first and second years after the 

act, and 50 percent in subsequent years. The Higher Education Act of 1965 

does not otherwise require Education to apply specitied criteria to foreign 

schools other than foreign medical schools. 

The Higher Education Amendments of 1992 further amended the 

mandated criteria that Education is required to use to assess the 

comparability of foreign medical schools to schools in the United States. 

Among other things, the amendments require the Secretary to establish an 

advisory panel of medical experts to evaluate the standards of 

accreditation used for evaluating foreign medical schools applying to 

participate in the student loan program and to determine the 

comparability of those standards to standards of accreditation for U.S. 

medical schools. As of June 1993, Education had not promulgated 

regulations to implement the 1992 amendments. In addition, Education 

officials told us that they had not convened the advisory panel. 

State Medical Boards Medical licensing activities for graduates of U.S. and foreign medical 

schools are carried out by state medical boards in the 50 states, the 

District of Columbia, Puerto Rico, Guam, and the Virgin Islands. The 

states’ licensing requirements vary, but generally all boards assess whether 

candidates meet education, examination, and experience standards, 

including residency training, for a medical license. Also, as a condition to 

granting medical licenses, medical boards require all medical graduates to 

Page 11 GAO/HEElS-94-28 Foreign Medical School Student Loans 
Chapter I 

Introduction 

have at least 1 year of graduate medical education (residency) training in 

the United States or Canada. 

LCME and ECF’MG U.S. and Canadian medical schools are subject to an in-depth accreditation 

process by LCME, an organization recognized by the Secretary of Education 

as the accrediting body for U.S. medical schools. The LCME accreditation 

process involves the scrutiny of a school’s curriculum and other aspects of 

its medical program by a team of medical educators knowledgeable of U.S. 

medical education standards. LCME standards address, among other things, 

9 the school’s objectives, governance, and administration; 

9 the duration, design and management, and content of the curriculum; 

. the evaluation of student achievement; 

l academic and personal counseling and career guidance, financial aid, and 

amenities for students; 

I admissions policies; and 

. resources for the educational program, including kances, general 

facilities, faculty, library, and clinical teaching facilities. 

Schools complete a lengthy medical education questionnaire to provide 

information as to how they comply with the standards. After each school 

completes its data report, an LCME team of four experts conducts a 

structured site visit, generally lasting about 3-l/2 days. 

Most foreign medical schools have no accreditation body comparable to 

LCME.~ However, to enter accredited U.S. residency programs, graduates of 

schools outside the United States and Canada are generally required to be 

certified by ECFMG.~ To achieve this certification, graduates must pass 

medical science and English-language tests and document that they have 

met the educational requirements to practice medicine in the country 

where they received their medical education. While national testing 

organizations and others have been attempting to develop a means to test 

one’s applied clinical skills, as of 1993, the examinations were limited to 

%CME states that only Australia has a comparable accreditation system. The California Board of 

Medical Quality Assurance found tit while the accreditation system in Great Britain could be 

considered reliable, those in the Philippines and Mexico were not reliable. 

?Some exceptions apply. For example, an applicant would be eligible if he or she has a full and 

unrestricted License to practice medicine in a U.S. licensing jurisdiction (likely obtained prior to states’ 

requirements that applicants for licensure demonsnate accredited residency W&ing for licensure). 

Page 12 GMYEEHS-94-28 Foreign Medical School Student Loans 
Chapter 1 

Introduction 

Incidence of 

Foreign-Trained 

No systematic means exist for determining the number of U.S. nationals 

attending foreign medical schools. However, most indicators, such as the 

number of graduates of foreign medical schools entering U.S. graduate 

Medical Students and medical education or applying for ECFMG cetication, show a decrease in 

Graduates number between 1985 and 1992. For example, in 1985, we reported 

Education estimates of 13,000 to 19,000 U.S. citizens attending foreign 

testing medical knowledge, an ECFMG official told us. ECFMG has no limits 

on the number of times students can take the tests it administers6 

medical schools6 For 199i, we es&n&e that between 4,400 id 6,600 US. 

citizens were studying in foreign medical schools, based on the number of 

foreign-trained U.S. graduates in the U.S. graduate medical education 

system in 1991.’ 

The number of US. nationals studying abroad may, however, be rising at 

present. Historically, more U.S. citizens have been attending foreign 

medical schools as admission to U.S. medical schools becomes more 

competitive. Medical school applications are increasing, according to the 

-Association of American Medical Colleges (MC). The ratio of applicants 

to medical school openings increased fi-om a recent low of 1.6 to 1 in 

198889 to a high of 2.1 to 1 in 1992-93. 

In 1992, graduates of foreign medical schools constituted 22.1 percent of 

physicians in the United States. About one-fourth of these graduates were 

U.S. citizens. The remaining three-fourths were foreign nationals who 

graduated from schools outside of the United States and Canada. While 

graduates of foreign medical schools have been increasing in number, the 

percentage of all U.S. physicians that they represent has remained fairly 

constant as shown in table 1.1. 

6ECFMG administers more than one test, as discussed in appendix I. State medical boards can set 

standards for the number of times a test can be taken as part of their standards for kensure. In 1993, 

five boards had such limits on the ECFMGadministered e xamination called the Foreign Medical 

Graduate Examination in the Medical Sciences (FhfGEMS). 

‘Federal, State, and Private Activities Pertaining to U.S. Graduates of Foreign Medical Schools 

(GAOiHFLD%-112, Sept. 27,1985), p. 4. 

‘ln 1991, about 1,100 U.S. international medical graduates were considered on duty in their first year of 

graduate residencies. Most international medical education programs take 4 to 6 years to complete 

(some countries allow high school graduates to directly enter medical education), according to an 

ECFMG official. 

Page 13 GAO/HEHS-94-28 Foreign Medical School Student Lame 
Chapter 1 

Introduction 

Table 1.1: United States-, Canadian-, and Foreign-Educated Pl’tysicians in the United States (1950, 1985, and 1992) 

Forelgn national U.S. natlonal 

U.S. foreign medical foreign medical Canadian 

Year graduates Percent graduates Percent graduates Percent graduates 

1980 362,307 77.5 71,106 15.2 26,620 5.7 7,646 

1985 425,775 77.0 84,093 15.2 34,782 6.3 8,066 

1992 500,092 76.6 105,406 16.1 38,993 6.0 8,571 

Percent 

1.6 

1.5 

1.3 

U.S. Nationals Most 

Often Attend 

Caribbean and 

Mexican Medical 

Schools 

foreign medical schools attended schools in the Caribbean 

Basin-primarily the Dominican Republic-r Me&o. In 1991, the largest 

number of ECFMG examinations administered to U.S. citizens were for 

those attending medical schools in the Dominican Republic (1,105), 

Mexico (828), Philippines (340), Montserrat (204), Dominica (170), and 

Italy (118). Education data on foreign medical schools whose students 

receive guaranteed student loans* also show that most students attend 

schools in Caribbean countries. Table 1.2 lism the 10 individual foreign 

.schools whose students received the most guaranteed student loans in 

1990 and 1991 and how those schools ranked in terms of the number of 

U.S. citizens applying for ECFMG examinations between July 1984 and May 

1993 with graduation dates after 1984. 

%r purposes of this report, references to guaranteed student loans address loam distributed under 

the Federal Family Education Loan Program, also la~own as the Guaranteed Student Loan Program. 

Page 14 GAO/HEHS-94-28 Foreign Medical School Student Loans 
Chapter 1 

Introduction 

Table 1.2: Foreign Medical Schools 

Receiving the Most Guaranteed School 

Student Loans (Fiscal Years 1991 and Foreign medical schools0 rankingb 

1992) 1. St. Georges University, Grenada, West Indies 1 

2. Universidad Autonoma De Guadalajara, Guadalajara, Mexico 2 

3. Ross University School of Medicine, Dominica, West Indies 4 

4. American University of the Caribbean, Montserrat, West Indies 3 

5. Tel Aviv University, Tel Aviv, Israel 6 

6. Soartan Health Sciences Universitv School of Medicine, St. Lucia, 9 

West Indies 

7. Universidad Central Del Este, Dominican Republic, West Indies 

8. Universidad Catoiica Madre Y Maestra, Dominican Republic, West 

Indies 

5 

10 

9. Universidad Mundial Dominicana, Dominican Republic, West Indies 

(also known to Education as Federico Henriquez Y Carvajal-see p. 28 

for further discussion of this school) 

21 

10. Universidad National Pedro Henriquez Urena, Dominican 

Republic, West Indies 

13 

Wsing Education’s information system, we could not break out the loans guaranteed to students 

attending medical programs, versus those guaranteed to other students. The numbers shown, 

and other numbers for loans to foreign medical schools in this report, represent the total 

payments to the school that is known to have a medical program. As discussed on page 32, most 

of the US. students attending the foreign schools in our survey of schools were attending the 

medical program. 

bRanking among schools attended by U.S. citizens applying for ECFMG certification between 

July 1984 and May 1993. 

Past Concerns 

Related to US. 

Citizens Attending 

Foreign Medical 

Schools 

In 1980, we reported that policies on U.S. citizens studying medicine 

abroad needed review and reappraisal. We recommended the development 

of more appropriate assurances that all students who attend foreign 

medical schools demonstrate that their medical knowledge and skilLs are 

comparable to those of their U.S.-trained counterparts before they are 

allowed to enter the mainstream of American medicine. In a 1985 report, 

we found that these issues still required attention. In both reports, we 

discussed the need for a more coordinated approach to assuring that all 

students who attend foreign medical schools demonstrate that their 

medical knowledge and skills are comparable to their U.S.-trained 

counterparts before they are allowed to enter the U.S. health care delivery 

system. One alternative provided was that the Department of Health and 

Human Services (HHS) could be given the authority to accredit foreign 

medical schools. However, a 1988 report of the Council on Graduate 

Page 16 GAOAEHS-94-28 Foreign Medical School Student Loans 
Chapter 1 

Introduction 

Medical Education9 concluded that it would be presumptuous and unwise 

for the Government and/or the private sector to attempt to establish 

procedures for accrediting medical schools outside the United States. 

Concerns about U.S. citizens attending foreign medical schools were 

heightened during the mid-198Os, when congressional. and Postal Service 

investigations identified the sale of fraudulent medical degrees by schools 

in the Caribbean. A broker with a medical education placement 

organization testified that he provided fraudulent credentials to about 100 

individuals from at least two schools. He also provided or arranged 

placement in a U.S. hospital for clinical rotations and in conspiracy with a 

physician from one of them falsified evaluations of rotations. Of those 

individuals, 13 were found to have obtained their medical licenses and 6 

more were working in hospital residency programs. The broker was found 

to have made $1.5 million with his scheme before he was caught by Postal 

Service authorities. After a review of credentials of people potentially 

involved, a total of 73 “doctors” eventually had their ECFMG certificates 

revoked. An additional 14 people surrendered their ECE+MG certificates. 

Eight people had their medical licenses rev0ked.l” The two major schools 

involved in the scheme were closed by the government of the Dominican 

Republic. Congressional hearings in December 1984 highlighted concerns 

about the quality of the education provided by a few proprietary (private, 

for-profit) foreign medical schools, particularly those in the Caribbean, 

and the potential risks to the health and welfare of the American public. 

Scope and 

Methodology U.S. citizens in residencies and practicing in the United States from the 

American Medical Association and ECFMG. We obtained information on 

state licensing standards from AMA and Federation of State Medical 

BOards. 

To evaluate the adequacy of Education’s standards and processes to 

determine whether approved foreign medical schools are comparable to 

U.S. medical schools, we reviewed relevant federal laws and regulations; 

administrative policies and procedures of Education and LCME; foreign 

school fiIes at Education; guidance provided to financial institutions on 

approved foreign medical schools; selected student applications for ECFMG 

Vhe Council was established under title WI of the Public Health Setice Act to make. 

~econutmdations to the Secretary of HHS and the Congress on concerns related to graduate medical 

education. 

loBaaed on data provided by FSMB. An additional 86 people had their ECFMG certificates revoked and 

reinstated and 3 people that surrendered their certificates were eventually reinstated. 

Page 16 GAO/EEHS-94-28 Foreign MedieaI School Student Loans 
Chapter 1 

Introduction 

certification; a survey of American Hospital Association member hospitals 

published in the Journal of the American Medical Association;” and 

information from the National Board of Medical Examiners, ECFMG, and 

FSMB on examination pass rates. In addition, we obtained information from 

medical schools in the Caribbean Basin and Mexico about programs, 

students, and student loans; we also contacted selected U.S. hospitals for 

information about clinical training of foreign medical students. We 

interviewed officials from Education, LCME, F&B, and selected states. We 

also obtained and analyzed Education’s guaranteed student loan database. 

To determine whether state medical boards have the information that they 

need to assess the quality of education of foreign-trained physicians, we 

interviewed directors of selected state medical boards and met with FSMB 

officials. 

Finally, our Office of Special Investigations investigated certain schools in 

the Dominican Republic after allegations were made that the schools were 

granting medical degrees based on little or no medical education. Details 

of the allegations and our investigation results are in appendix II. 

Our work was conducted between April 1992 and June 1993 in accordance 

with generally accepted government auditing standards. 

llJoumd of the American Medical Association, Vol. 256, No. 10 (1986). 

Page 17 GAOEIEHS-94-28 Foreign Medical School Student Loans 
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Education Improperly Guaranteed Millions 

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Although the reqtiement has been in place since 1966, Education has not 

met its statutory responsibility to assure that foreign medical schools 

participating in the student loan program are comparable to US. medical 

schools. Education’s standards as applied do not address the quality of the 

education provided by the schools. Also, Education does little to review 

the clinical training arrangements of many foreign medical schools. Many 

of the frequently attended foreign medical schools lack domestic hospitals 

to provide hands-on training to students. Instead, these foreign medical 

schools send their students to train in hospitals located in other countries, 

most often the United States. U.S. hospitals training foreign medical 

students in many cases are not approved to teach U.S. medical students 

and f&quentiy lack formal agreements with the medical schools to assure 

educational standards were met. 

In addition, Education has done little to enforce the few standards it has in 

place, relying on unverified information to approve schools and lacking 

formal policies and procedures for assessing schools. One consequence is 

that Education has approved schools that state medical boards have 

disapproved. One such school became the subject of a GAO special 

-investigation after it was found to be related to a school whose medical 

advisor had pleaded guilty in the United States of practicing medicine 

without a license. F’inally, Education’s inattention to program 

requirements has resulted in guaranteed student loans being made to 

students attending medical programs that it had not approved. 

Education has an opportunity to improve its standards as it develops new 

regulations to implement the Higher Education Amendments of 1992. 

However, even if the standards it uses are improved, unauthorized 

payments likely will continue unless control weaknesses and process 

problems are also addressed. 

Education’s Standards Education has not developed adequate standards to help assure that the 

for Approving Foreign foreign schools it approves are comparable to their U.S. counterparts. 

Between 1985 and the time of our review, Education based its 

Medical Schools Are comparability assessments on standards set forth in the 1988 regulations 

Not Adequate and the Higher Education Act of 1965 (HEA), as amended in 1986.l As 

table 2.1 shows, however, we believe that the standards Education used in 

LEducatlon did not promulgate regulations to outline or further clarify its criteria for comparability, as 

required by the 1986 amendments to the act According to the Education official responsible for 

applying the standards, Education’s ability to use the 1983 regulatory standards in conjunction with 

those in the 1986 amendments made new regulations unnecessary. 

Page 18 GAO/HEHS-94-28 Foreign Medical School Student Loans 
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approving the 91 foreign medical schools are not sufficient for establishing 

their comparability with U.S. medical schools. 

Table 2.1: Assessment Standards and Their Limitations for Measuring the Comparability of Education and Training at U.S. 

and Foreign Medical Schools 

Standard GAO concern 

School is listed in the World Health WHO neither recognizes nor evaluates schools in its directory, but lists any school based 

Organization (WHO) Directory of Medical on data provided by states and national governments. 

Schools. 

School is recognized as a medical school Education did not consider the standards other countries used to recognize medical 

and approved by those evaluating bodies in schools, or whether other countries qualitatively assessed their medical schools. An 

the country in which the school is located, Education official indicated that the Department never had an independent means of 

whose views are considered relevant by the determining if foreign medical schools met the requirements. 

The school has graduated two classes. Standard does not address the quality of education and training. 

The school has a student population As implemented, not a measure of cornparabiiity of education and training. Because 

composed of at least 60 percent from the ECFMG pass-rate data for individual schools was not available, Education relied instead 

country in which the school is located, or the on the student enrollment criteria, but did not always apply it as required. See page 22 

school’s American students have achieved a for a further discussion of Education’s related enforcement problems. 

oass rate of 50 oercent on ECFMG’s exam.* 

The school’s clinicat and classroom medical -As implemented, not an effective measure of comparability of education and training. 

instruction is at least 32 months in length, Education asks schools to report the length of the program and relies on the school’s 

supervised closely by members of the response to determine if the 32 month standard has been met. Education had not 

school’s faculty, and provided either (1) defined how schools would assure their instruction was closely supervised, and based 

outside the U.S. in adequately equipped and on our review of school files did not review the supervision of instruction. Although the 

staffed facilities, or (2) in the U.S. through a schools reported the location of their clinical training facilities, Education had not 

training program for foreign medical requested information on equipment or facilities beyond what information a school 

students approved by all medical licensing provided in its course catalogue. Finally, Education had approved several schools that 

boards and evaluating bodies whose views state medical boards had disapproved, as discussed on pages 27 and 28. 

are considered relevant by the Secretary. 

aThe law was modified by the Higher Education Amendments of 1992, as discussed on page 11. 

Before the 1992 amendments, the Secretary’s criteria for approving foreign medical schools had 

to include a requirement that a student attending a medical school is ineligible for loans unless at 

least 60 percent of its students are nationals of the country in which the school is located or that a 

school unable to meet their criteria could establish the eligibility of its students if the U.S. nationals 

attending such school achieve a pass rate on the examinations administered by ECFMG not less 

than 50 percent for students taking such examination in any subsequent year. As a result of the 

1992 amendment foreign medical schools now must demonstrate that at least 60 percent of their 

students are not American and 60 percent of their students who took the ECFMG exam the 

preceding year passed or that their clinical training program was approved by at least 1 state as 

of January 1, 1992. 

Foreign School Clinical 

Training Often Not 

Comparable to U.S. 

Tf.kaining 

Clinical training, or clerkships, provide vital “handsxx?’ medical training 

and typically constitute the last 2 years of medical school. The applied 

clinical training is a critical part of medical education, because these 

clerkship experiences teach the student to establish desirable 

Page 19 GAO/EEES-94-28 Foreign Medical School Student Loans 
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Education Improperly Guaranteed Millions 

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schools 

physician-patient relationships, take medical histories, conduct physical 

examinations, and recognize common disease patterns Assuring close 

supervision and adequate evaluation of these experiences is important. 

Also, these applied skills cannot currently be tested in the standard 

knowledge examinations that are used to certify the readiness of foreign 

medical school students to enter U.S. graduate medical education and 

obtain medical licenses. U.S. medical schools are required to obtain formal 

agreements with hospitals providing required clerkships. These 

agreements may cover how the school and hospital will maintain the 

school’s standards, appoint faculty to the medical school staff, design the 

curriculum, supervise the students, provide for liability insurance, evaluate 

student performance, and other matters. 

Foreign medical schools frequently attended by U.S. nationals often lack 

facilities to provide clerkships in their country. These schools arrange for 

hospitals outside the country to train their students. For frequently 

attended schools, this training often occurs in the United States. We 

identified five approved foreign medical schools whose students received 

39 percent of the total funding Education provided to students attending 

foreign medical schools in 1990 and 1991 with clinical training faciiities 

located outside of the country. Generally, these schools and their affiliates 

in the United States were identied through the schools’ applications for 

Education approval and school catalogues. A 1986 study and our work on 

Education-approved medical schools and their a.Biliated hospitals indicate 

that U.S.-baaed clinical clerkships for foreign medical students were often 

in hospitals that (1) were not approved to teach U.S. students or (2) had 

no formaJ teaching agreements to assure the schools’ educational 

standards were met. 

Study of U.S. Hospitals Raises 

Concerns 

In 1986, AHA and AMA researchers reported the results of a survey of U.S. 

hospitals to assess the types of clinical training they were providing to 

foreign medical students2 The study concluded that the foreign medical 

schools exercised little supervjsion or control over the students or the 

quality of the educational experiences provided. The study found that, as 

of January 1985,166 U.S. hospitals were providing clerkships for foreign 

medical students and 789 hospitals had provided such training before the 

study. Thirty percent of the 166 hospitals providing clerkships to foreign 

medical students were not affiliated with U.S. medical schools and, thus, 

were not accredited to teach American medical school students. Sixty-five 

percent of the 166 hospitals training foreign medical students had no 

*Mona M. Signer, M.P.H. (AHA), and Anne E. Crowley, Ph.D. (AMA), ‘Clinical Tmining for Students of 

Foreign Medical Schools in U.S. Hospitals,” Journal of the American Medical Association, Vol. 256, No. 

10 (19&T), pp. 1311-1314. 

Page 20 GAO/HEHS-94-28 Foreign Medical School Student tqans 
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written or oral fiation agreements with the foreign schools. Almost 

60 percent of those hospitals had never been visited by a representative of 

the school whose students it was training. 

Sixteen states reported to AMA in 1991 that they regulate clerkships that 

hospitals provide to foreign medical students, primarily by requiring that 

the hospital be accredited to train U.S. students or by prohibiting such 

arrangements. However, the 1985 study found that eight hospitals located 

in states that prohibited hospitals from training foreign medical school 

students were providing such training. In addition to the 166 hospitals 

providing tmining to foreign medical students, the study found that 701 

U.S. hospitals were providing opportunities for foreign medical school 

students to “obsenTe* their operations-but not in a clinical training 

arrangement that the hospital considered a clerkship. Although 

determining the specific nature of these arrangements was outside the 

scope of their study, the researchers noted that this type of arrangement 

raises questions about the objectives of the arrangements and the credit 

students receive for participating in such arrangements. 

Concerns Remain With 

Education-Approved Schools 

We contacted selected U.S. hospitals that were identified either by foreign 

medical schools in their applications for Education approval or foreign 

medical students in thejr applications for ECFMG certification as providing 

their clinical tmining.3 Our review of the affiliations and their training 

status yielded results similar to the earlier study. In total, we reviewed 84 

af6liations~ 45 that were reported by schools and 39 reported by students 

that had not been reported by the schools. In reviewing the 84 afiiliations, 

we found that? 

l Sixtyone percent of the affiliations in hospitals that had trained foreign 

medical school students between 1990 and 1993 were in hospitals that had 

no formal af!iliation agreements with the foreign medical schools. 

4 F’ifty-one percent of the af6liations were with hospitals6 that either did not 

have an affiliation with a U.S. medical school to teach U.S. medical 

sSpecificaUy, we reviewed a judgmental sample of students taking the ECF’MG examination in 1990 or 

1991 from 15 schools that we had identified as likely to have clinical k4ning afiiliates in the United 

States. Students reported receiving train@ in 39 hospitals that had not been reported to Education in 

their schools’ applications for approval 

4Since some U.S. hospitals were affiliates of more than one foreign medical school, a larger number of 

zAlaalions existed as compared to atxates. 

6our review was limited in that it only included a smsll number of schools. 

‘In some cases, the af6hated facilities were clinics or other medical facilities. 

Page 21 GAOAIEHS-94-28 Foreign Medical School Student Loans 
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students or had only a limited affiliation to teach students for brief or 

unique rotations. 

9 Twenty-nine percent of the af6hations were with hospitals that were not 

accredited to sponsor or participate in any graduate training programs. 

l Seven percent of the reported affiliations apparently did not exist. The 

hospital administrators or other officials from six hospitals indicated that 

the hospital had no affiliation with the foreign medical schools whose 

students claimed that they were trained at the hospital Officials from two 

of these hospitals stated that they had not heard of the cited foreign 

medical school whose students claimed to have received training at their 

hospital. 

. Ten percent of the affiliations had ended. Officials from eight hospitals 

indicated that the hospital had once trained foreign medical students but 

had ended the af6Jiation.s with the cited foreign medical school. 

We could not verify that five of the U.S. clinical training facilities cited by 

schools in their 1992 Education applications or fall 1992 catalogues 

existed in the city cited by the school when we conducted our review in 

early 1993. 

We also found evidence that some schools may allow students to set up 

their own clerkships in any U.S. hospital that would accept the student. 

For example, the course ctiogue of one school receiving student loan 

monies indicated that “students are permitted to seek clinical clerkships in 

locations of their own choosing in the U.S.A.” 

Education Has Not 

Enforced Its 

Standards 

Education’s inattention to assuring the comparability of foreign medical 

schools is further reflected in its lack of enforcement of its standards. 

Relying primarily on information that the schools submitted to comply 

with Education’s requirements, Education did little to document that 

schools had met all standards and to assure schools were reapproved 

within the required timeframes. Education’s lack of enforcement was 

complicated by the unavailability of certain medical examination pass 

rates by school. However, summary information on pass rates for all 

foreign medical school graduates shows that foreign-trained U.S. nationals 

score significantly lower than their U.S.-trained counterparts. 

Our review of Education’s files for the 91 approved schools showed that 

Education did not 

Page 22 GAO/HJlHS-94-28 Foreign Medical School Student Loans 
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Chapter 2 

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sebools 

l follow its own regulation and reapprove schools every 2 years. Education’s 

regulations indicate that a foreign medical school’s participation is limited 

to 2 years. Education had 91 schools designated as approved in 1992, but 

the eligibility of 88 of those schools had expired. Most schools had not 

been reviewed for a period of time much greater then 2 years. The most 

recent date of correspondence between Education and 59 approved 

schools was 1934 or earlier. 

l consistently apply standards to all cases. Of the 91 approved schools’ files, 

60 (66 percent) had no documentation that the medical program had been 

reviewed. The only document in these Bles was a program participation 

agreement signed by the school and Education and/or a notification to the 

school of its eligibility. The remainin g 23 schools (25 percent) had some 

evidence that Education had applied at least one standard. Education 

could not locate a school file or any documentation for another 8 schools 

(9 percent). Limited information provided to us by several approved 

schools showed that many of them did not meet the standards that 

Education had in place.’ 

l conduct site surveys to verify information submitted by schools in course 

catalogues and the Education application. Verification, when it occurred,B 

-consisted mainly of checking reference manuals or determining from 

officials of the school’s country that the school was considered a medical 

school by the host country government, the Education official responsible 

for reviewing and approving foreign schools told us. Education officials 

indicated that foreign school approvals were a low priority and that 

Education lacked the expertise and resources to conduct site reviews. 

While we agree that Education has in the past lacked the expertise to 

perform on-site surveys of schools, in response to the Higher Education 

Amendments of 1992, the Secretary plans to establish a31 advisory panel of 

medical experts to evaluate the standards of accreditation used for 

evaluating foreign medical schools. This panel should greatly enhance 

Education’s ability to adequately evaluate foreign medical schools. 

Concerning resources, Education could establish criteria to decide which 

schools should be visited for site reviews with an aim toward minimizing 

resource requirements. For example, Education could review schools 

whose clinical training facilities are located outside the country of the 

school. Schools meeting such criteria could be required to pay a fee to 

help offset the costs of the site visit as a condition of Education’s review of 

Tar example, some schools provided infomon show&g that more than 60 percent of their student 

population was from outside the local population. We further found that some Education-approved 

foreign medical schools were not listed in the WHO directory. 

Bwe found little evidence in the files of approved schools that such verikation had taken place. 

Page 23 GAO/HEHS-94-28 Foreign Medical School Student Loam 
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their school for participation in the guaranteed student loan program. 

State medical boards and FSMB generally required schools to pay for the 

site visits they conducted. 

Foreign Medical Schools’ 

Dependence on Tuition 

Financing Enhances 

Education’s Ability to 

Review Their Activities 

The foreign medical schools with high concentrations of U.S. national 

students appear heavily dependent on tuition financing-much of it 

provided through student loans. This situation should facilitate 

Education’s ability to thoroughly review these schools’ activities, should 

Education choose to conduct site visits. 

Almost 90 percent of Education’s student loan funds to approved foreign 

medical schools are provided to students attending about 10 schools, as 

determined from student loan funding between 1986 and 1991. We also 

noted during our review that foreign medical schools attended most 

frequently by U.S. citizens appear much more dependent on tuition as a 

source of revenue than U.S. medical schools. Tuition and fees made up 

only 4.3 percent of total 1989-90 revenues for U.S. medical schools. The 

majority of revenues for these schools came from federal research; other 

-federal, state, and local government sources; and medical services. In 

contrast, New York’s state education department reviewed foreign medical 

schools in the mid-1980’s and obtained data on revenues. The department 

found that the three Education-approved9 schools most frequently 

attended by U.S. nationals receiving student loans between 1986 and 1991 

were highly dependent on tuition revenues, which ranged between 92 and 

99 percent. The percentage of Americans at these three schools averaged 

75 percent for 1990 and 1991. 

Our review also indicated that the schools receiving the most student loan 

funds have histor&lly cooperated in providing Education with 

information needed to approve them for the program If, however, a 

school was to choose to not cooperate with Education in this regard, 

Education’s authority permits it to not approve the school and deny loan 

funds to students attending the school. 

@The survey reports showed that tuition and fees for St. Georges Universi@ School of Medicine 

constituted 92 percent of total revenues in fiscal year 1986-87. Tuition and fees (as budgeted) at Ross 

University School of Medicine in 1984-E constituted 99 percent of the school’s educational revenues. 

Tuition and fees at the American University of the Caribbean constituted 95 percent of revenues in 

1981. 

Page 24 GAO/BEES-94-28 Foreign Medical School Student Loans 
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Education Did Not Apply 

Pass-Rate Criteria, but 

Overall Rates Show 

Foreign-Trained U.S. 

Citizens Score Lower 

One quantifiable measure of a school’s medical program is a school’s 

student pass rate on standard national examinations. Since the Higher 

Education Amendments of 1986,‘O Education has been required by law to 

assure that foreign medical schools approved for participation in the 

guaranteed student loan program either show that their student bodies are 

composed mainly of citizens of their own country or that their U.S. 

graduates pass ECFWG examinations at a rate equal to or above a specified 

percentage, currently 50 percent.ll 

According to the Education official responsible for approving foreign 

schools, Education did not use pass rates in approving the 91 schools,12 

m&ly because the data were unavailable from ECFMG and difficult to 

obtain from the schools themselves. ECFMG’S policy in the past was to 

withhold group pass-rate data for individual. schools due to concerns 

about their misinterpretation and misuse of performance data In 

February 1993, ECFMG informed us that it would work with Education to 

determine the best method for calculating the pass rates for individual 

schools. These rates had not been provided to Education as of June 1993.13 

A comparison of overall pass rates on medical knowledge examinations 

administered to foreign- and U.S.-trained students and graduates shows 

that foreign-trained U.S. nationals generally score below the 50 percent 

level and significantly lower than their U.S.-trained ~ourtterparts.~~ The 

most extensive data available that provide a comparison between foreignand U.S.-trained students are for the National Board of Medical Examiners 

examination. This exam was taken by both U.S.- and foreign-trained 

students between 1989 and 1992. These data are shown below. Data from 

other tests showing similar results can be found in appendix I. 

‘@I’he 1992 Higher Education Amendments further modified the law. See page 19 for information 

%See table 2.1, note a, for speci& criteria as specified in law. 

nlIre approving Education official also indicated that schools were able to qualify based on meeting 

the 60-percentenrollment criteria However, we identified at least 6 approved schools that did not 

meet the enrollment criteria 

13According to Education officials, ECFMG had changed its position and would not release these data 

Education officials said that they were planning to seek an amendment to the requirement that they 

apply the pass rates in assessing schools. 

r4Pmts of three different medical knowledge examinations taken by both US.- and foreign-educated 

students and graduates offer a point of comparison. See appendix I for more specific explanations of 

the tests and the pass rates. 

Page 28 GAO/HEHS-94-28 Foreign Medical School Student Loans 
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Figure 2.1: Pass Rates on the NBME 

Examination, Part I (Basic Sciences) 100 Psrcenfage of CandIdatea 

- Graduates of LCME-Accredited Medical Schools 

-11 U.S. Graduates of Foreign Medical Schools 

-*mmrn. Foreign Graduates of Foreign Medical Schools 

Pee 26 GAOIHEHS-94-28 Foreign Medical School Student Lqens 
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Education Improperly Guarauteed Millions 

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school6 

Figure 2.2: Pass Rates on the NBME 

Examination, Part II (Clinical Sciences) PefcentagoofCmdldates 

80 

70 

60 

IO 

0 

SeptwlO Aprl990 sept1990 AprlO91 L%lptl901 Apr 

1992 

.TesUngPerlods 

- Graduates of LCME-Accredited Medicos Schocls 

-- U.S. Graduates of Foreign Medical Schools 

=a*=.= Foreign Graduates of Foreign Medical Schools 

Education HasApprcwed Schools 

That State Medical 

Boards Have 

Disapproved 

Serious deficiencies at a few foreign medical schools may have escaped 

Education’s attention because of Education’s inadequate standards, 

reliance on information in applications and course catalogues, and lack of 

enforcement of its standards. In fact, Education had no record since 1983 

of any foreign medical school that did not meet its standards, an 

Education official told us. Education has reviewed and approved schools 

that state medical boards reviewed and rejected. Licensing boards in 

California, New Jersey, and New York conducted surveys of foreign 

medical schools to determine whether their graduates would be eligible 

for state ticensure or allowed to train in hospitals in the state.16 The states’ 

evaluations, conducted mainly in the 1980s at the expense of the subject 

schools, were generally narrower in scope than LCME'S but more thorough 

than Education’s in that site teams inspected facilities and usually met 

with school administrators, faculty, and students. 

%her states also conducted surveys and disapproved schools in some cases; however, these surveys 

generally were not conducted on site. 

Page 27 GACVEEHS-94-28 Foreign Medical School Student Loans 
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Together, the three state boards disapproved a total of four schools that 

Education had approved for student loan program participation.16 

Collectively, students attending these four schools received about 

$11.4 million in student loan monies in 1990 and 1991. Some of the 

deficiencies that the states noted illustrate the magnitude and types of 

problems that would not have emerged from information on guaranteed 

student loan applications or school catalogues. These deficiencies 

included ill-preparedness of students for clinical training with respect to 

physical diagnosis and taking patient histories; a lack of integration of the 

basic and clinical sciences; limited teaching facilities and materials; 

inadequately managed clinical curricuhun-particularly with respect to 

the supervision, evaluation, and counseling of students; careless 

documentation of credited coursework taken at other medical schools; 

and the granting of credit for study in health fields not taken in medical 

school. 

Not Following Procedures During the course of our review, we became aware of an allegation that an 

Resulted in Approval of Education-approved school, the Universidad Federico Henriquez Y 

Questionable School Carvajal School of Medicine (LJFHEC), located in Santa Domingo, 

Dominican Republic, was operated by a person who had pleaded guilty to 

practicing medicine in the United States without a license. Several Santa 

Domingo schools were involved in the allegation. We conducted a special 

investigation of the schools17 and the basis for Education’s approval of the 

involved schools. 

Our investigation found that U’RIEC was operating with the same key 

administrators and similar course catalogs as another Santo Domingo 

school, the British West Indies Medical College (SWIMC). These 

relationships raise concerns because BWWC was alleged by former 

students to be granting medical degrees after students had as little as 10 to 

11 months of medical education. In fact, former students told us and 

provided documentation indicating that generally the BWIMC curriculum 

consisted of about 6 weeks of rapid review of the “basics,” and 9 months 

of courses and clinical rotations to complete the program. Persons with 

prior health experience, such as chiropractors, were given “advanced 

standing” for their experience. When recruited, students (often 

‘@Not alI schools were rated consistently by states, primarily because some state’s reviews were more 

indepth than others. One state, New York, patterned its reviews after those of LCME and had 

extensive reports and tidings. 

l’GAO’s Oflice of Special Investigations conducted the fieldwork to determine the status of the schools 

refeed to in the student’s allegation. 

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chiropractor) were told that the program would allow them to maintain 

their practice in the United States and obtain their medical degree at the 

same time. At least four students interviewed indicated that they had 

received credit for courses they did not tie or test results for tests that 

were not administered. Several students complained that their clinical 

experiences were limited. For example, one student said his training 

consisted of “scrub nurse” activities at various clinics or hospitals in and 

around Santo Domingo. 

While BWTMC apparently ceased operations in mid-1992 UFHEC continued 

with some of the same troubling characteristics as BWIMC. Documentation 

provided by BWIMC students and our investigation showed the following: 

l Correspondence on UFMEC letterhead sent to BWIMC students soliciting their 

attendance in the new program cited the former BWIMC dear?* as the 

“Academic Advisor” and “Coordinator.” Court documents show that this 

individual had pleaded guilty in 1989 to practicing medicine without a 

license. in North Carolina, receiving a 2-year suspended sentence and a 

$500 tie. A North Carolina Department of Jutice official told us that a 

raid of the advisor’s former office found numerous diplomas from what 

proved to be correspondence schools or organizations that simply charged 

a fee for certifkation.1g The UFWEC advisor was also charged in Florida in 

1990 with financial exploitation of the elderly, practicing medicine without 

a license, and grand theft. 

l u??‘HEc correspondence sent to current and former BWIMC students and an 

interview with a former BwIMc administrator who was also employed by 

UFHEC show that the BWIMC dean was also employed by LFHEC. Further, the 

schools had almost identical course catalogues and the same mailing 

addresses for certain school clinical facilities. Solicitations mailed to 

potential students in 1992 seeking their attendance at UFHEC were signed 

by the former BWIMC dean and the former BWIMC administrator. These 

solicitations indicated that UFHEC was offering the same “accelerated 

program” for obtaining a medical degree as was offered at BWIMC. 

UFWEC officials did not respond to our written and oral requests for 

comments on these relationships with EWMC. 

‘@This individual was cited as “dean” and ‘president” on various leuers sent to students regarding the 

school. 

loA document obtained by a BWIMC student showed that the individual had attended a Dominican 

Republic school called Universidad CIFAS, which was closed by that government in the mid498Os for 

selling fkaudulent medical diplomas. 

Page 29 GAO/IIEHS-94-28 Foreign Medical School Student Loans 
Chapter 2 

Education Improperr~ Gwauteed MiWons 

in Loans to Students of Foreign Medical 

Schools 

Our review of the Education records shows that Education had approved 

UFHEC for student loans effective June 1991 without following its own 

approval procedures. According to Education’s records, WHEC 

participated in the student loan program under a school code number 

formerly assigned to a school called the Universidad Mundial Dominicana 

(VMD). Education rules allow such a transfer in codes and participation 

status when an approved school merely changes its name.2o New schools, 

or schools undergoing more profound changes-such as a change of 

ownership-are subject to Education review before being approved for 

participation. 

IBID was closed in 1991, according to the Dominican Republic government, 

and UFHEC opened in the same location after the closure of UMD. The 

Dominican Republic government considered UFTBC a new school; 

consequently, per Education’s own rules, Education should have reviewed 

IX’HEC to assure Education standards were met before allowing it to 

participate in the guaranteed student loan program. If Education had 

reviewed T.TFHEC as a new school, UFTIEC would not have met Education’s 

basic participation criteria. For example, UFHEC did not have the World 

-Health Organization recognition that Education requires before approval. 

A more detailed discussion of the problems found with UFIBC is in 

appendix II. 

Inattention to 

Program - 

Requirements Results 

in Student Loan 

Program Participation 

by Unapproved 

Medical Schools 

Typically, the student initiates the loan process by providing eligibility 

information to the school. The school puts together a financial aid package 

and is responsible for dete r-mining a student’s eligibility for a student loan. 

In the event a school incorrectly certifies that an ineligible student is 

eligible, the school is responsible for reimbursing Education for all interest 

and special allowance paid on behalf of the borrower. The student loan 

funds are provided by a lending institution and a state or nonprofit agency 

approves the loan, guaranteeing the loan against default. In cases of 

students seeking loans to attend foreign medical schools, lenders and 

guaranty agencies consult a list of foreign schools and medical programs 

that Education has approved for student loan program participation to 

assure that the school named on the student’s application is an approved 

participant. 

“Education files contained no documentation of UMD’s request to change its name to UF’HEX. The 

system was changed to allow Federico to use UMD’s school code, and the person responsible for 

making the change left Education employment before responding to our questions. UFHEC officials 

provided us with a copy of the letter they claimed to have submitted to Education to request the name 

change. 

Page 80 GAOIHEHS-94-28 Foreign Medical School Student Loans 
chapter 2 

Education Improperly Goat-an teed MUions 

in Loans to Students of Foreign Medical 

SChOOlS 

This process has not assured that schools correctly certify eligibility for 

students attending approved foreign medical school programs for two 

reasons. First, Education’s primary control to assure that loans go only to 

approved schools is through the lenders and guaranty agencies, an 

Education official told us. However, these agencies have no means to 

identify loan applicants who are attending a medical school or program 

that is part of a foreign university. Identifying those students seeking to 

attend foreign medical schools is important, since foreign medical schools 

must comply with specific Education criteria The loan applications do not 

request any information on whether the program of study in which the 

student is enrolling is a foreign medical school. For example, a student 

attending the school of medicine at the University of Guadalajara would 

show only “University of Guadalajara” on the applicationzl Many foreign 

universities are considered Education-approved, with the exception of 

their medical program. Only if the lender or guarantee agency acts on its 

own initiative to determine if an applicant was attending the medical 

program would this fact become known. 

Second, Education mistakenly indicated to lenders and guaranty agencies 

-that all approved foreign universities had approved medical schoolsn In 

fact, only 67 of the more than 600 approved foreign schools receiving 

student loan monies did.23 For at least 20 months and as long as 10 years,24 

Education provided lenders and guaranty agencies with official agency 

guidance that ah approved foreign schools had approved medical schools. 

According to our review of school files, Education had actually never 

reviewed most of the medical schools of the approved foreign schools. 

Education managers were apparently unaware of the mistake, as the 

official responsible for providing the guidance had been given full 

authority for making all approval decisions and providing guidance to 

*IA common applicatjon form for the student loan program has been developed by the higher 

education community, the guarantee agencies, and the Department and was recently approved fat use 

by the Department, according to an Education official. The form does not request speciiic program 

informalion. 

%hile Education is not required to apply any specific criteria in approving international universities, 

Education by law must assure international medical programs meet standards of comparability. 

%hile Education hsd approved 91 schools, not all received student loan monies during the 1986-91 

timehrne. 

%We could not determine how long guaranty agencies and lenders were operating under the incorrect 

guidance, because Education could not provide us with documention of past guidance. However, 

based on documentation provided by guaranty agencies, they were operating under the incorrect 

guidance for up to 10 years. 

Page 31 GAO/HEHS-94-28 Foreign Medical School Stndent Loans 

Y 
Chapter 2 

Education Improperly Guaranteed Million8 

in Loans to Students of Foreign Medical 

SChOOLa 

guaranty agencies without management oversight.26 As of 1992, Education 

had reviewed and approved only 91 foreign medical schools. The incorrect 

guidance had the effect of authorizing participation of 226 foreign medical 

programs that had not been reviewed.% 

Moreover, the majority of student loan monies going to the schools were 

provided to students attending their unapproved medical schools. We 

surveyed 18 of the unapproved foreign medical schools in the Caribbean 

Basin and Mexico, since these regions had schools that were frequently 

attended by U.S. nationals. Of the 12 responding schools, 11 had students 

receiving student loans in 1990 or 1991. On average, about 83 percent of 

the students receiving loans were attending unapproved medical schools. 

In December 1992, during our review, Education corrected its guidance to 

the guarantee agencies and lenders by clarifying that not all approved 

foreign schools had approved medical programs. However, the application 

form has not been changed to request information about foreign medical 

schools. For this reason, the likelihood remains that students will receive 

loans to attend unapproved foreign medical schools. 

. 

Loans to Foreign We could not determine the precise amounts of loans guaranteed to 

Medical Schools Total students attending foreign medical schools for which Education had no 

assurance were comparable to U.S. medical schools. However, available 

Tens of Millions evidence indicates that many loans were made to students attending 

Annually - 

unapproved foreign medical schools or approved schools for which 

Education had little assurance were comparable to their U.S. counterparts. 

Between 1986 and 1991, $173 million in guaranteed student loans was 

made to students attending foreign schools. Over $129 million of that was 

provided to students attending foreign schools with medical programs. We 

estimate that $118 million of that was provided to students attending 

foreign schools for which Education had no assurance of their 

comparability to U.S. medical schools. A detailed discussion of our 

estimating methodology is in appendix III. 

Conclusions While most U.S. guaranteed student loans go to students at U.S. schools, a 

large share of the renGnin g loans go to U.S. students who predominately 

“Based on our conversation with her immediate supervisor, who informed us that she was -ware of 

the emplOYeds actions witi regard to for- schools. According to the supervisor, she allowed the 

employee to use her (the supervisor’s) %&a-hue stamp” on outgoing guidance requiring the 

supervisor’s signahlre. 

“See World Health Organization World Directory of Medical SC+IOO~S, Sixth Edition, 1988. 

Page 52 ~O/HEI%S-94-28 Foreign Medical School Student Leans 
chapter 2 

Education Improperly G-anteed Milliona 

in Loans to Students of Foreign Medical 

Schools 

attend a few foreign medical schools. The Congress has legislated certain 

standards that foreign medical schools must meet to qualify for 

participation in the guaranteed student loan program. However, Education 

has not property implemented the standards and lacks assurance that the 

foreign medical schools it authorizes for loan program participation are 

comparable to U.S. schools. 

Education has an opportunity to improve its standards as it prepares 

regulations to implement the Higher Education Amendments of 1992. 

Education will have medical experts that could assist in developing these 

standards and the processes for applying them, since the amendmenta 

required the Secretary, as part of the comparability determination process, 

to establish an advisory panel of medical experts to determine the 

comparability of foreign countries’ accreditation standards to those 

applied to U.S. medical schools. This advisory panel is a likely source of 

information as to how the standards that Education uses could more 

approximate those that are applied to U.S. medical schools. 

Still, more needs to be done than improve Education’s standards. We 

-identified serious problems with Education’s enforcement procedures and 

the program requirements that are supposed to assure loans are 

guaranteed only for students attending approved foreign medical 

programs. Problems we found with Education’s processes resulted 

in millions of loans being made to students attending unreviewed and 

unapproved schools, and schools that Education had approved but with no 

assurance that they met its standards. 

Foreign medical schools greatly benefit from their U.S. students’ 

participation in the student loan program, since many attending students 

receive these loans. While Education may not have resources to conduct 

site surveys of alI foreign schools, a few schools receive the majority of the 

guaranteed student loans made to students attending foreign schools. In 

the case of states that required site surveys as part of their assessment 

processes, foreign medical schools were willing to pay for teams to assess 

their schools and affiliated hospitals. 

Recommendations to We recommend that the Secretary improve the standards and processes 

the Secretary of 

Education 

used to determine the eligibility of foreign medical schools. Specifically, 

we recommend that the Secretary together with the congressionally 

mandated advisory panel of medical experts implement standards that are 

comparable to those that U.S. schools must meet. Further, we recommend 

Page 33 GAOAEHS-94-23 Foreign Medical School Student Loans 
Chapter 2 

Education Improperly Guaranteed Millions 

in Loans to Studenta of Foreign Me&xl 

schools 

that the Secretary establish policies and procedures to help assure that 

guaranteed student loans are made only to students attending medical 

programs that meet Education’s standards. 

W ith regard to standards, Education should 

l 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 and 

l establish criteria for triggering site visits to schools’ campuses and clinical 

training facilities to review the schools’ operations and facilities and verify 

information. 

We also recommend that the Secretary of Education (1) establish formal 

policies and procedures regarding the foreign medical school approval 

process, (2) develop appropriate guidance for lenders and guaranty 

agencies, (3) assure that approving officials are knowledgeable and staff 

are properly supervised, and (4) require applicants for loans to iden- 

-when they plan to attend a foreign medical school. 

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 

w-w-= 

Agency Comments Education agreed with our recommendations and described the specific 

steps it is taMng to address them. Education stated that it is drafting a 

Notice of Proposed Rulemaking to revise the procedures and criteria 

under which a foreign medical school establishes eligibility to apply to 

participate in the student loan program. Education plans to address our 

recommendations for improving its standards and procedures in these 

new regulations that implement the 1992 amendments to the Higher 

Education Act. Additional planned steps that Education stated it was 

t&king include 

l developing regulations that require foreign medical schools to 

demonstrate that (1) they have formal &iliation agreements with the 

facilities they use to train their students and (2) their facilities are 

equivalent to those that teach U.S. medical students. 

Page 24 GAO/HEHS-94-28 Foreign Medical School Student Loans 
Chapter 2 

Education Improperly Guaranteed hUllions 

in Loans to Students of Foreign Medical 

schoola 

l developing and implementing criteria to trigger site visits of foreign 

medical schools’ clinical training facilities within the United States and to 

foreign medical schools in Mexico, Canada, and the Caribbean Basin 

where the majority of participating foreign medical schools are located. 

. developing internal procedures for the review and approval of foreign 

medical schools, including the development of a revised Application for 

Participation and Program Participation Agreement. 

l establishing new internal procedures for the review and approval of 

foreign medical schools. 

9 assuring that staff assigned to Education’s approval function are 

adequately supervised and receive appropriate instruction on the approval 

process. 

. requiring schools whose eligibility has expired to undergo a complete 

renewal of approval, and initiating termination actions for currently 

participating foreign medical schools that do not meet the Department’s 

standards of approval. 

Education agreed in part with our recommendation to require loan 

applicants to identify when they plan to attend a foreign medical school. 

-Education plans to assign each foreign medical school a unique 

identification number but does not plan to require that loan applicants use 

it or otherwise disclose that they plan to attend a foreign medical school. 

In our view, establishing these new identiers will not, in itself, correct the 

problem that we found with loans going to students attending unapproved 

schools. To correct this problem, Education wouId also need to collect 

information to separately identify those students who attend foreign 

medical schools that are part of a larger university. 

A copy of Education’s detailed response is in appendix IV. 

Page 35 G4O/EEHS-94-28 Foreign Medical School Student Loans 
Chapter 3 

State Medical Boards Lack Information to 

Evaluate Education of Foreign-Trained 

Applicants for Licensure 

For licensed physicians to practice medicine in their states, state medical 

boards must evaluate the quality, relevance, and acceptability of the 

education and training of applicants. State medical boards generally have 

been unable to obtain the information they need for such evaluations of 

foreign-educated physicians because they either lack resources to conduct 

such evaluations or foreign schools contacted will not cooperate. To 

compensate for their lack of information on the education of foreign 

medical school graduates, some states have raised the training (residency) 

requirements for applicants from unaccredited schools. As a result, states 

have faced lawsuits charging discrimination. 

FSMB and Individual 

States Unable to 

The Federation of State Medical Boards is the representative organization 

supporting the state medical boards in the 50 states and the District of 

Columbia, Guam, Puerto Rico, and the Virgin Islands. On two occasions, 

Obtain Information on FSMB, at the behest of its member state medical boards, has been 

Foreign Medical unsuccessful in attempts to collect objective data on specific foreign 

schools. The first attempt occurred after FSMB’S 1980 annual meeting, 

Programs during which state medical boards expressed concern with the quality of 

-education at certain offshore schools catering to W.S. citizens. As a result, 

FSMB established a Commission to Evaluate Foreign Medical Schools, The 

Commission’s objective was basically to gather information for state 

licensing boards. The information gathered was patterned after the Liaison 

Committee on Medical Education reviews, although the Commission was 

set up to be a fact-gathering body as opposed to an evaluative accrediting 

organization. The schools selected for study were those in which state 

boards had expressed the greatest amount of interest. Initially, eight 

schools located in the West Indies and Mexico were surveyed, While five 

schools agreed to cooperate, only one school responded completely to the 

Commission’s survey. Eventually, 68 schools were queried, 10 of which 

responded with a completed questionnaire. 

After the initial lack of responsiveness from the schools, the Commission 

became relatively inactive until 1984 when, once again at FSMB’S annual 

meeting, state medical boards unanimously passed a resolution seeking 

the prompt implementation of an effective system for providing critical 

information on foreign medical schools to the member boards for their use 

in making licensure decisions. This action resurrected FSMB’S Commission 

on Foreign Medical Education. Once again, licensing boards provided the 

Commission with lists of schools for which they wanted more information. 

Initially, 10 schools were solicited. Again, only one school completed the 

PW~ 36 GAO/HEHS-94-28 Foreign Medical School Student Lam 
Chapter 3 

State Medical Boards Lack Information to 

Evahate Education of Foreign-Trained 

Applicants for I.&ensure 

CommLssion’s questionnaire.’ FSMB at that time decided that, based on the 

overwhelming nonresponse, it would abandon this effort. An FSME! official 

told us that in addition to the problems with the lack of cooperation from 

schools, FSMB was concerned about liability issues, in the event that state 

boards based hcensure rejections on information provided by the 

Commission. 

Some individual states have tried to survey foreign medical schools on 

their own. Fourteen of 19 states we contacted had tried to conduct surveys 

to approve a school’s clinical training program or approve the school’s 

graduates for licensure. Seven subsequently decided that the process was 

not workable and abandoned their efforts. OnIy seven still have authority 

to continue the process, and most of these were not actively approving 

schools at the time of our review because schools were no longer applying 

for approvaL2 Jn most cases, state officials indicated the efforts were 

ended due to a lack of resources or the unwilhngness of schools to 

cooperate. 

FSMB officials, and five state medical board directors we interviewed, 

-indicated that states still need information on the quality of the education 

provided by frequently attended foreign medical schools. In fact, schools 

that states were most interested in knowing about are also schools that 

were receiving student loans. Of 27 known schools from which FSMB 

sought information in the 1980s 20 had received student loans between 

1986 and 1991. 

Without reliable information on the quality of education at foreign medical 

schools, educationally underqualified physicians may be entering the U.S. 

health care delivery system. Medical board and other officials cited 

concerns with other controls in place that keep underqualified physicians 

from entering the system. First, the medical knowledge examinations that 

all physicians must pass to enter residencies are not all inclusive. Also, 

some physicians continue taking the tests until they pass. States can set 

limits on the number of times the test can be taken to qualiQ for licensure 

but some states have not set such limits. Therefore, access to data on 

foreign medical schools, such as are available for US. schools, is 

?-wo schools that the Commission solicited were closed soon after the survey attempt, due to their 

involvement in selling fraudulent medicaI diplomas. 

?State.s that continue their assessment processes use the information for various purposes. For 

example, a New York board official told us that New York maintains a list of foreign medical schools 

approved to train students in New York hospitals, as well as a list of foreign medical schools whose 

students are approved to be treated the same as graduates of U.S. schools. A California official 

indicated that the state maintains a list of schools whose graduates are ineligible for licensure in the 

state and another list of schools approved to train students in CalZornia hospitals, 

Page 37 GAO/lXEHS-94-28 Foreign Medical School Student Loans 
Chapter 3 

State Medical Boards Lack Info~~Mti~n to 

Evaluate Education of Foreign-TWined 

Applicauts for Liceneure 

important for determining applicants’ qualifications. Second, tests only 

assess knowledge, not clinical skills. As noted by one state board official, 

“basically we test for the retention of facts; facts that become obsolete and 

have little clear-cut relationship to the clinical situation.” Finally, while all 

states require that foreign-trained U.S. citizens complete at least 1 year of 

residency before grant&rg them licenses, resident physicians are high in 

demand, positions are often unfilled, and state medical board officials 

indicate that residency program directors are hesitant to expel poor 

performers or alert the board to them due to liability concerns. State 

medical boards became painfully aware of the need for better information 

when the Dominican Republic government closed down two to four 

medical schools in the mid-1980s for issuing false diplomas, and boards 

found that numerous physicians with such diplomas had gone through the 

system and gotten licensed. 

- 

State Medical Boards Assessing the quality of education of applicants for licensure is a critical 

Under Pressure to Set element to state medical boards in determining whether the applicant 

should be licensed. The executive vice president of BMB testified to the 

the Same Standards Congress in 1988 that the boards are Ytmctioning in the dark in relation to 

for U.S.- and the educational background of large numbers of foreign medical 

ForeigrCllained 

Physicians 

graduatesB5 W ithout reliable information on the quality of education, some 

state boards have attempted to develop compensating requirements for 

the licensure of foreign medical school graduates by raising their graduate 

medical education requirements for foreign medical school students. For 

example, for 1993, an AMA publication shows that approximately 32 of 54 

licensing boards had higher requirements for graduate medical education 

for foreign-trained applicants than their U.S.-trained counterparts. 

States, however, have been under pressure to keep their requirements the 

same for both foreign- and U.S.-trained physicians.4 The differing 

requirements for foreign-trained versus U.S.-trained applicants have raised 

complaints about discrimination. Some states have faced lawsuits 

charging civil rights violations against foreign medical students. Many 

complaints have been raised to the Congress, and an AMA publication 

reports that between 1988 and 1991 at least 12 bills to prohibit 

discrimination against foreign-trained physicians were introduced, In 1992, 

q@iIIlOV by B-t L. Galusha, M.D., before the Subcommittee on Health and the Environment, 

House Committee on Energy and Commerce (Mar. 11,1988). The hearing was addressing, among other 

things, bills to address concerns about higher licensing requirements for foreign medical graduates. 

4GA0 reported on differences in state licensing standards once a doctor has been licensed in one state 

for fad@ and U.S. medical school graduates in Medical Licensing by Endorsement: Requirements 

Differ for Graduate5 of Foreign and U.S. Medical& 

Page 38 GAO/HEHS-94-28 Foreign Medical School Student Loans 
Chapter s 

State Medical Boards Lack Information to 

Evaluate Education of Foreigtt-Trained 

Applicanta for Licenmre 

the Congress passed Public Law 102408, which included a requirement 

that the Secretary of Education establish a council to, in part, review state 

licensing policies for foreign- and U.S.-trained medical graduates and 

determine the effects of the policies. 

California provides an illustrative example of the dif&ulties states have 

had in responding to the pressures of assuring the competence of the 

physicians they license and not unfairly treatjng foreign medical school 

graduates. The California legislature passed a law in 1985 declaring its 

intent that the state medical board move toward the approval of foreign 

medical schools that meet California medical school standards. The law 

requires the board to conduct site visits to inspect medical school 

accreditation systems and individual schools in three countries on three 

continents and report its findings to the state legislature. The board’s 1989 

report to the legislature found that many schools and foreign country 

accreditation systems reviewed did not provide a medical education 

comparable to that of a U.S. school. The report also concluded that 

duplicating LCME’S process would be prohibitive for all schools abroad, but 

an option would be to ask foreign-trained applicants to enhance their 

-clinical training in U.S. hospitals. The board’s report recommended that 

the board raise its l-year postgraduate training requirements for U.S.- and 

foreign-tr&ned physicians to 3 years, The report indicated that the raised 

requirement for everyone would not be discriminatory because all 

graduates would be required to complete the same training before titial 

licensure. 

Although there was general support from representatives of California 

medical schools to increase the requirement, there was concern from 

graduate student associations that an increase would impose hardships on 

residents in their ability to engage in gainful employment outside of the 

residency setting. In response to these concerns, the board voted in 1990 

to change its recommendation. Instead of a 3-year postgraduate 

requirement, the board proposed a 2-year reqtiement. The California 

Residents’ Association argued that there was no demonstrated need for 

requiring additional training for both foreign- and US.-trained graduates. 

As a result, the board changed its recommendation to, in effect, require 

that foreign-trained physicians who do not have undergraduate clinical 

training in an accredited program satisfy a 2-year postgraduate training 

requirement. As of 1993, this recommendation had not been adopted by 

the state legislature, a state official told us. Both U.S.- and foreign-trained 

physicians were stilI subject to a l-year residency requirement before their 

eligibility for licensure. 

Page 39 GAOIEEHS-94-23 Foreign Medical School Student Loans 
Chapter S 

State Medical Board@ Lack Information to 

Evah&.e Edncation of Foreign-Trained 

Applicants for I&ensure 

Conclusions license have the education and training needed to competently serve the 

public and (2) their standards do not treat applicants unfairly. In the case 

of foreign-trained U.S. physicians, fuhihing these responsibilities has 

proven most difficult. But this dilemma+ombined with the weaknesses 

in Education’s approval process for foreign medical schools participating 

in the student loan program-may be altowing educationally 

underqualified foreign medical school graduates to enter the ranks of U.S. 

physicians. 

States continue to need better information on the curriculum, faculty, and 

facilities of foreign medical schools that train large numbers of U.S. 

nationals who eventually apply for licensure in the states. Education is 

also charged with seeking such information from many of the same 

schools to determine their comparability to US. medical schools. If 

Education improves its assessments to more closely parallel those 

conducted by LCME, we believe that Education can obtain and provide 

states with much of the information they need to meet their purposes. 

Recommendations improved, the Secretary share information that Education obtains on 

foreign medical schools with state medical boards for their use in 

evaluating the education of licensure applicants. The Secretary also should 

work with FSMB to determine which information that Education gathers 

would be of most use to the state boards. 

FSMB Comments FSMB agreed with our recommendations, expressing its hope that the 

recommendations are speedily acted on by the Congress and the Secretary 

of Education. In addition, FF.MB expressed its interest and offered 

assistance, on behalf of its member medical boards, in seeing the 

recommendations move forward. A copy of W&S response is in appendix 

v. 

Education Comments Education agreed with our recommendations. Education stated that it 

intends to interact with FWIB to share critical information gathered on 

foreign medical schools, including periodically providing FSMB with lists of 

approved foreign institutions. 

Page 40 GAOIHEHS-94-28 Foreign Medic&I School Student Loans 
Page 41 GAWIEHS-94-26 Foreign Medical School Student Loans i 
History of Examinations Given to Foreignand U.S.-Trained Physicians 

Before 1992, U.S.-trained physicians and those from unaccredited (foreign) 

schools took different examinations on the path to medical Iicensure. 

U.S.-trained physicians most often took the National Board of Medical 

Examiners exams and foreign-trained physicians the Foreign MedicaI 

Graduate Examination in the Medical Sciences (WGEMS) for ECFMG 

certification and the Federation Licensing Examination (FLEX) for medical 

Iicensure. Since 1989, foreign-trained physicians have been allowed for 

EcmG certi6cation to take two of three parts of the Nl3ME examination, 

which were formerly allowed only for graduates of US. and Canadian 

medical schools. 

NBME and FSMB established a single, uniform examination for medical 

Iicensure in the United States to be administered in 1992. The United 

States Medical Licensing Examination (USMLE) Step 1, Step 2, and Step 3 

provides a common evaluation system against which to measure 

knowledge and cognitive competence of applicants for medical Iicensure. 

USMLE will replace the two existing examination sequences used in the 

medical licensing process, NBME and FLEX. NBME wiIl be last adrnimstered in 

May 1994, and FLEX in December 1993. ECFMG has also approved Step 1 and 

-Step 2 of usrm as meeting the requirement for the medical science 

examination for ECFMG certification. consequently, the WFMGadministered 

examination, FMGEMS, was to be last administered in July 1993. 

Pass-rate data on the ~ME and FLEX examinations taken by both US.- and 

foreign-trained physicians provide a basis for comparison. As shown on 

pages 26 to 27, data for recent test periods show that for parts I and II of 

the NBME exam (part I covering basic medical sciences and part II covering 

clinical sciences), pass rates for U.S. graduates of foreign medical schools 

are far below the rates for graduates of U.S. medical schools. Data from 

FLEX simiIarIy show that foreign-trained U.S. nationals perform lower than 

other groups, including foreign-trained foreign nationals. 

Page 42 GACMEEES-94-28 Foreign Medical School Student Loans 
Appendix 1 

HIstory of Euuninations Given to Foreignand U.S.-Trained Physicians 

Figure 1.1: Pass Rates on the FLEX Examinations 

100 Percentage of Candidates 

lestlng Periods 

- Graduates of LCME-Accredited Medical Schools 

-- US. Graduates of Foreign Medical Schools 

n m* =.. Foreign Graduates of ForsIgn Medical Schools 

While U.S. graduates do not take the EWMG examination called the FMGEMS, 

pass rates for these examinations also reflect that U.S. citizens educated in 

foreign schools pass at a lower rate than foreign nationals trained abroad. 

Page 43 GAOAEHS-94-28 Foreign Medical School Student Loans 
Appendix I 

History of Examinations Given to Foreignand U.S.-Trained Physician@ 

Figure 1.2: Pass Rates on the FMGEMS Examination, Day 1 (Basic Sciences) 

50 Percentage of Candidates 

45 

40 

35 

30 

2.5 

I5 - 

- 

10 

5 

0 

July Jan July Jsn July Jan Jufv Jen July Jan July Jan July Jail July Jan July Jan 

1964 1985 1985 1986 1955 1987 1957 1966 1958 1939 1989 1999 1990 1891 1991 1992 1992 1993 

Thing Periods 

- U.S. Graduates of Foreign Medical Schools 

-- Foreign Graduates of Foreign Medical Schools 

Page 44 GAO/HEHS-94-28 Foreign Medicul School Student Loans 
Appendix I 

History of E raminationa Given to Foreignand U.S.-Trained Physiciana 

Figure 1.3: Pass Rates on the FMGEMS Examination, Day 2 (Clinical Sciences) 

100 Percentage of Candidatee 

90 

80 

70 

60 

20 

10 

0 

July Jan July Jan JW Jan July Jan July Jan Julv Jan July JEll July Jan July Jan 

1984 1965 1965 1966 1966 1987 1987 wsa 1966 1969 1969 1990 1990 1991 1991 1992 1992 1993 

Testing Periods 

- U.S. Graduates of Foreign Medical Schools 

-- Foreign Graduates of Foreign Medical Schools 

As noted in 1992, the USMLE examination was first administered to 

establish a single examination for licensure. Data available since 1992 

show that the pass rates on the USMLE similarly indicate that U.S. citiens 

trained in foreign schools pass at a lower rate than other groups. For 

example, the pass rates for m m-registered exatninees (U.S.- and 

Canadian-trained students) for the 1992 administiations of Step 1 of USMLE, 

assessing whether an examinee can apply the lmowledge and 

understanding of key concepts of basic biomedical science, averaged 

85 percent, as compared with 23 percent for foreign-trained U.S. citizens 

and 37 percent for foreign citizens trained in foreign schools. 

Page 46 GAO/HEHS-94-28 Foreign Medical School Student Loans 
Appendix II 

Education Approved Medical School in 

Santo Domingo in Violation of Eligibility 

Rules 

As part of our review of Education’s processes for approving foreign 

medical schools, we investigated allegations that the British West Indies 

Medical College in Santa Domingo was granting degrees to students with 

little or no medical education. Education had not approved BWlIMC’s 

participation in the guaranteed student loan program. However, Education 

did break its own rules in approving a medical school that apparently 

replaced BWIMC. Our investigation demonstrated how Education was 

vuh-terable to approving foreign medical schools that do not meet its own 

standards. 

BWIMC’S medical dean had attended a Santa Domingo medical school that 

was identified in congressional hearings in the mid-1980s as a diploma 

mill, according to documentation obtained by a former BVJIMC student.’ In 

1989, the former dean pleaded guilty to practicing medicine without a 

license in North Carolina and in 1991 was charged with practicing 

medicine without a license and financial exploitation of the elderly in 

Florida. In early 1992, BWIMC students who had become aware of the dean’s 

illegal activities expressed concerns about his notoriety and its effect on 

the school’s reputation. Three students proposed establishing a new 

school or finding a way to sever the school’s ties to the dean. Later that 

year, BWIMC apparently closed. Another medical program that of the 

Universidad Federico Henriquez Y Carvajal, emerged. It was affiliated with 

BWIMC’S dean and shared many characteristics of BWIMC’S ~rogram.~ 

Education allowed WFNX to inherit the school code of another school, 

whose campus it assumed, without assuring that the name change was 

valid. A school under new ownership is considered a new school and 

must, by Education’s own regulations, be treated as such. Education’s 

policy requires that name changes be verified. If Education had done so, it 

would have discovered that, according to Dominican Republic officials, 

the schools were considered different schools and applied its criteria to 

UFHFC. The school would not have met the criteria at the time it adopted 

the approved schooi’s code, since schools are required to be listed in the 

World Health Organization Directory of Medical Schools, at a minimum. 

Also, participating schools must have at least 60 percent of their students 

from the local population. Our evidence shows that UFHEC met none of 

these requirements. 

lThis individual was cited as medical dean of BWIMC on several documents and as the school’s 

president on one document 

2Apparentiy, UlWEC has programs other than medicine. BWIMC appears b be affiliated only with the 

medical school of the UFHEC. 

Page 46 GAO/EJZHS-94-26 Foreign Medical School Stndent Loans 
Appendix II 

Educstion Approved Medical School in 

Santn Domingo in Violation of Eligibili~ 

Rules 

Scope and 

Methodology 

To investigate the allegations that B~IMC was a fraudulent operation that 

was operated by a person who had pleaded guilty to practicing medicine 

without a license in the United States, offered medical diplomas to 

chiropractors with little medical training, and affiliated with an 

Education-approved school, we conducted interviews with and obtained 

documentation from 11 former BWIMC students, one person who invested 

in the school, and one person from IJFTIEC, the school that apparently 

replaced HVIMC. We interviewed a former administrator of BWMC, who was 

then employed by LTHEC. We solicited information from the Vice Rector of 

UF%EC regarding the school’s relationship to BWWC and its principals, but 

received a response to our letter that did not answer most of our 

questions. For that reason, we drew our conclusions primarily from 

interviews with and documentation provided by the Florida State 

Attorneys Office and Department of Law Enforcement, the North Carolina 

Department of Justice, BmC students, the Consejo National de 

Education Superior (CONES) of the Dominican Republic Govemment,3 and 

the Educational Commission for Foreign Medical Graduates. Also, we 

reviewed available Education files on all schools in the Dominican 

Republic, including those potentially related to BWDIIC. Finally, we 

-interviewed staff of the publication Dynamic Chiropractic, who had 

conducted their own investigation of BWIXC and potential false advertising. 

B WIMC Medical In reviewing the adequacy of Education’s processes for approving foreign 

Degree Alleged to Be medical schools for student loan program participation, we became aware 

of allegations made in 1992 to the Federation of State Medical Boards that 

Worthless ’ a Santa Domingo medical school, BWIMC, was granting degrees to students 

with little or no medical education. The initial allegations about BmC 

were made by a chiropractor who enrolled and participated in an on-site 

inspection of the school in session as well as a meeting of students and 

school officials. He quickly withdrew from the program, requesting a 

refund of the $15,000 instaUment on tuition fees he had already paid the 

school. (He eventually received a partial refund.) The chiropractor 

characterized BWTMC as a “scam” and “diploma mill,” and the clinical 

lxainhg as ‘less than inferior.” 

According to his testimony and that of seven other former students and 

documentation provided by them, the BWIMC program consisted of a 

varying number (generally six to eight) of l-week trips to the Santo 

3CONES @I Consejo National de Education Superior or the National Council of Higher Education) is 

a Dominican Republic government body that supervises the performance of higher education 

institutions and legalizes documents from those institutions. CONES verifies the legal status of 

Dominican Republic schools and the credentials of students from schools that have closed. 

Page 47 GAO/HEHS-94-28 Foreign Medical School Student Loans 
Appendix II 

Education Approved Medical School in 

Santa Domingo in Yialadon of Eligibility 

Rules 

Domingo facilities of the school. After 6 weeks of rapid review of the 

“basics” and 9 months of courses and clinical rotations, a student could 

complete the prognun4 One former student described a typical day of 

school as 2 to 3 hours in the classroom in the morning and rounds with 

physicians in the afternoon to observe procedures. The tuition that 

students paid ranged fkom $12,000 to $30,000. This did not include travel 

and lodging expenses, which the students paid out of pocket. Some of the 

students were solicited to become investors in the school. 

B WIMC Compares to 

Diploma Mills schools identified in the mid-1980s during congressional hearings as diploma mills. Like those schools, BWIMC 

Id&ified in the 1980s 

l sought chiropractors and other mid-level practitioners as students, 

offering them advanced standing and admission into an “acceleratedn 

program of medical study. BWIMC advertised in a chiropractic periodical, 

Dynamic Chiropractic. A majority of the school’s students apparently were 

licensed chiropractors who were interested in the opportunity to obtain a 

medical degree while continuing their practice. 

. accepted students with little scrutiny of their qualifications for attending 

medical school. For example, one former student said that the school did 

not insist upon college transcripts as evidence of prior education. Another 

indicated that he was never interviewed and was accepted to the school by 

letter. A third student said he was admitted to BWJMC, although he had not 

graduated from an undergraduate program where he had taken courses. 

. did not maintain high standards for education. One former student told us 

that actual BWMC courses he participated in did not resemble the 

descriptions in the catalog and were “a joke,” and characterized his degree 

from the college as worthless. However, one former student spoke highly 

of the lectures. Several former students indicated that they received no 

grades for tests taken, and that school officials had assured students that 

their performance on course tests was not very important. Four former 

students told us that BWJMC gave them credit for courses that they did not 

take or test results for tests that they did not take. 

9 did not ensure highquality clinical training. One former student said that 

the clinical portion of the BWIMC program involved virtuaHy no hands-on 

training. Another student told us that his clinical experience was limited to 

scrub-nurse activities at various clMcs or hospitals in or near Santa 

Domingo. One student said that his clinical rotation experience included 

4A second part of the program involved transferring to a WHO-approved school Imown as 

UNIFiEHMOs, where the student was required tn spend about three 3-month trimesters on campus. 

Based on interviews with students, this arrangement with IJNIREHMOs was never fulled. 

Page 48 GAO/EEES~94~28 Foreign Medical School Student Loans 
Appendix II 

Education Approved Medical School in 

Santa Domingo in Violation of EUgikdlity 

Rules 

observing cases in a hospital in which “every condition warranted 

penicillin or erythromycin.” 

Students Concerned By early 1992 but perhaps earlier, students at BWIMC were concerned that 

About Reputation of past activities of the school’s dean-m particular, his plea of guilty to the 

charge of practicing medicine without a license and the several charges 

BVVIMC Advocate brought against him in Florida for medical fraud-had tarnished the name 

Establishment of New of the school. The students had become awsre through an article 

School 

published in the December 18,1989, issue of Medical Economics6 that in 

1989 the school’s dean had pleaded guilty to practicing medicine without a 

license in North Carolina From the same article, they also learned that 

their school’s dean had never attended an accredited medical school or 

taken a licensing exam; also that his questionable medical practices had 

attracted the attention of the North Carolina State Attorney General’s 

office, the State Bureau of Investigation, and the North Carolina Board of 

Medical Examiners. 

A letter signed by three students and addressed to present and prospective 

students of BWJMC in early 1992 urged its readers to consider various 

actions: to continue at the school without change, to continue at the 

school but to end all association with the dean, or to establish a new 

school under the direction of another school official. According to one 

former student, this school official advocated that the school be renamed. 

At a meeting between a BWJMC student representative and school officials 

(including the dean) in early 1992, the BWIMC student representative 

questioned the dean’s medics3 credentials and expressed concerns about 

the credibility of the school. According to a former student, when the 

representative suggested that the name of the school be changed, the dean 

indicated that he would take the recommendation under advisement. 

6Charles Daunt III, “No Medical Degree, No License? Come Practice Here,” Medical Economics 

(Dec. 18,1989), pp. 70-96. 

Page 49 &4O/HEHS-94-28 Foreign Medical School Student Loans 
Appendix II 

Edncation Approved Medical School in 

Santa Domingo in Violation of Eli@bjliQ 

Rules 

UFHEC Is 

Established, B WIMC 

Ceases Opeiations 

Sometime around mid-1992, BWIMC apparently ceased to operate.6 A new 

medical program, UFHEC’S, apparently either took its place or somehow 

otherwise became affiliated with the administrators and students of BWIMC.~ 

BWIMC’S former dean was perceived by students to be “at the helm” of 

UFBEC’medical S school, although he was listed on correspondence sent to 

students as the school’s academic advisor and coordinator. According to a 

former BWC student, BWIMC’S dean was responsible for the operation of 

UFHEC and received a percentage of UFHEC’tuition S revenues. Another 

student indicated that the dean had gotten a chance to purchase a license 

to operate through UFHEC. Correspondence sent to BWIMC students stated 

UFTIEC and HVIMC shared almost identical catalogues and mailing addresses 

for certain clinical facilities. LNEC medical school solicitations mailed to 

potential students in 1992 were signed by BWIMC’S former dean and its 

administrator. Former students we interviewed viewed UFXEC’medical S 

school as closely z&hated with BWIMC. According to the former 

zUhinj&ator of BWIMC and a current secretary of UETIEC, BWIMC no longer 

had students in 1993, most having transferred to UFREC. UEXEC was 

apparently established when its owners took over the campus of the 

University Mundial Dominicana, which had ceased to operate in 1991.* 

-TJFIEC opened in the same location following the closure of UMD. 

We requested information from UFTEC, but while UFHEC’S Vice Rector 

responded to our letter, she did not respond to our questions about the 

school’s dean and its organizers, the advisory and teaching staff, the 

clinical facilities, and the nature of the school’s relationship with BWIMC 

and its principals. She said that many questions we asked “were not of my 

concern.” 

@l’o detmmine the status of the school, we visited in May 1993 two mailing addresses for administrative 

offices of the school in Florida The fust address was the location of the Ding-a-Ling Answering 

Service, which had BWIMC as a client several years earlier; the second was the North Lauderdale 

Postal Center, a mail drop for the school. On the basis of further evidence, including accounts of 

former students and a statement Tom an attorney purportedly representing BWEMC, we believe that 

the school suspended operations around mid-1992. 

‘While LFHEX officially opened in 1991, BWIMC was known to be operating in 1992. It was not until 

after BWIMC apparently suspended operations in 1992 that UF’H?ZC correspondence was sent to 

students showing the link to BWIMC. 

BAccordbq to the Vice Rector, UFHEC, the school was founded in 1968 

Page 60 GAO/EIEHS-94-28 Foreign Medical School Student Loans 
Appendix II 

Education Approved Medical School in 

Santa Domingo in violation of Eligibility 

Rules 

Education Transferred In its first year of operation, TJFHEC was approved for federal student loan 

to UFHEC 

Certification of an 

Approved School 

program participation without assessment or review and despite 

Education’s rules that would have prohibited UFIBC from being approved 

without, for example, its listing in the World Health Organization Directory 

of Medical Schools. UFHEC became eligible for program participation in 

that Education assigned it a code number formerly associated with UMD. 

Education rules allow such a transfer in codes and participation status 

when an approved school changes its name and certain conditions are 

met, such as the appropriate agency approving the change. However, 

Education’s policy is that schools changing ownership are considered new 

schools unless certain conditions are met, 

If Education had contacted the Dominican Republic government, 

Education would have learned that UFFIEC was considered to be a new 

school and that it was not the same school as the one whose campus (and 

Education program participation code) it adopted. In that case, Education 

rules would have prohibited immediate approval, since a new school must 

meet all the requirements laid out in regulations. 

Page 61 GAOEIEHS-94-28 Foreign Medical School Student Loans 
Methodology for Calculating Estimates of 

Loans Guaranteed 

We obtained funding data for all payments made to students attending 

foreign schools during the years 1986 to 1991. During that time period, 

Education guaranteed $173 million in student loans for students attending 

foreign schools. We estimate that up to $117.6 million may have been loans 

to students attending foreign medical schools for which Education had no 

assurance were comparable to schools in the United States. 

Education approved 67 schools using standards that are not comparable to 

those used by LCME to accredit U.S. schools or that Education had no 

record of the justification for the approval. Loans to students attending 

these schools totaled $61.9 million between 1986 and 1991. 

Education made loans between 1986 and 1991 to students attending an 

additional 226 foreign schools with unapproved medical programs 

totalling $67.4 million. We identified that these schools had medical 

programs by using the World Health Organization’s World Directory of 

Medical Schools, Sixth Edition. In surveying 12 foreign schools with 

unapproved medical programs, we found that on average 82.6 percent of 

the students receiving loans in 1990 and 1991 to attend the schools were 

-attending the unapproved program. If this percentage is the same for all 

foreign schools with unapproved programs, then 82.6 percent of 

$67.4 million or $55.7 million could potentially have gone to students 

attending unapproved medical school programs. 

Thus, $61.9 million was paid to programs approved because they met 

inadequate standards, and an estimated $55.7 million was paid to students 

attending unapproved medical programs, for a total of $117.6 million. 

Page 62 GAOIHEHS-94-28 Foreign Medical School Student Loans 
Comments From the Department of 

Education 

UNITED STATES DEPARTUENT OF EDUCATIOS 

OFFlCE OP POSTSECOSI)AR)’ EOU’ATICIS 

THE .\SSl?rTA\T hE’XtTr\HY 

NOV 2 2 193 

Linda G. Morra 

Director 

Education and Employment Issues 

Human Resources Division 

United Stat# Genetal Accounting Office 

Washington, DC 20548 

Ikar Ms. Morra: 

The Secretary has asked me to respond to your request for comments on the General 

Accounting Office (GAO) draft report, “Millions in Unauthoriaed Student Loans to U.S. 

Nationals at Foreign Medical Schools.” GAO/HRD 93-136, ttansmitted to the Department of 

Education (Department) on September 27, 1993. 

The Department agrees with GAO’s recommendations. The 1992 amendments to the Higher 

Ebukxlon Act (Act) included new requirements for Foreign medical schools that wish to 

participate in the Federal Family E&cation Loan (FPELl program. The Department is 

dnfting a Notice of F%posul Rulemaking (NORM) coverktg these new requirements. ‘These 

proposed reg$ations would revise the procedures and critcria under wttich a foreign medical 

school establtshes eiigibility to apply to participate in the FPEL program. The Ac@o 

mandates the establishment of an advisory committee.. A dctaikd response to the 

recommendations is enclosed. 

We appreciate the opportunity to comment on the draft report. If you have any questions, 

please contact Molly Hockman, Acting Director, Accounting and Financial Management 

Service, on (202) 708-6234 or Carol Sperry, Acting Director, Institutional Participation and 

Oversight Senk, on 708-8197. 

Enclosure 

Page 63 GAO/EEHS-94-28 Foreign Medical School Student Loans 

I 
Appendix IV 

Comments From the Department of 

Education 

See pp. 33-34. 

Seep. 34. 

General Accounting Office Draft Report, “Millions in Unauthorized 

Loans to U.S. Nationals at Foreign Medical Schools,” 

GACVHRD 93-136 

GAO recommends that the Secretary. together with the Congressionally mandated advisory 

panel of medid experts, implement standards that are comparable to those Ihat U. S. 

schools must meet. 

gD RESPONSE, . 

The Department agrees wilh the recommendation. The Higher Education Amendments of 

1992 mb. L. 102-325, July 22,1992] mandated under pnrt GGeaeftl Provisions, Sec. 

48x. Dcrhltion!i, that 

“The Scaetary shall establish an advisory panel of medical expens which shall- 

(a) evaluate the standards of accreditation applied to applicant foreign medical schools; and 

@)&ermine the compambility of those standards to standards for accreditation applied to 

lJnitcd States medical schools.’ 

The advisory panel that the Secrctq has established is alkd the National Committee on 

Foreign Education and Awcdition (NCFMEA). The apartment will publish a Notice of 

+pxed Rulemaking (NORM) that wiI1 define procod= and establish standards that 

foreign medical rhools must meet in order to participate in the Fedeml Family Education 

LoaJl (mL) prog~. 

GAO recommends that the Secrer~ry establish policies and procedures to help assure that 

guaranteed student loans an made only to students atteaching medical progtams that meet 

EAhlcation’s slimdads. 

The Dqxtment agrees with the recommendation. The -enI will publish a WRM 

that will define procedures and establish standards that foreign malical schools must meet in 

order to participate in the FFEL program. 

Page 54 GAOIHEBS-94-28 Foreign Medical School Student Loans 
Appendix IV 

Comments From the Department of 

Education 

Page 2 - Ms. Mom 

See D. 34. 

See p. 34. 

See p. 34. 

BFCOMMEBQATION 1.L . 

GAO recommends that, with regard to standards, Education should rquire that foreign 

medical schools demonstrate that (1) they have formal affiliation agreements with Ihe 

facilities they use to train their students, and (2) their tmining facilities ar-c equivalent to 

those that teach U. S. medical students. 

The Depannmt agrees with the recommendation. In the past. the Dcpartmeu could not 

evaluate the quality of the medical education that U. S. citizens chose for themselves in 

foreign countries. However, being unable to evaluate educational quality does not 

necessarily mean the quality was poor. 

As we stated under Recommendation 1.1, the Department will publish a NPRhi that will 

define procedures and estabIish standards that foreign institutions must meet in order to 

participate in the FFEL program. 

EWO-A~ON 1.4, . 

GAO recommends that, Education establish criteria for lriggering site visits to schools’ 

campuses and clinical training facilities to review the schools’ opetations and facilities and 

verify information. 

The Department agrees with the reeornmendation. After the final regulations have beon 

published, the Nm will begin to evaluate the standards of accreditation used in foreign 

u~unties and determine the comparability of those standanis to the standards applied to U.S. 

medical schools. Wed on the information it receives from the NCFMEA, the Department 

will develop and implement criteria to trigger site visits of foreign medii schools’ clinical 

training facilities w&ii the Unit& States and, funds permitting, site visits to foreign medical 

schools in the Republic of Mexico, Canada, and the Caribbean basin where the majority of 

participating foreign medical schools are located. 

RECOhfMENDATION & . 

GAO recommends that the Secreraty of Education establish formal policies and procedures 

regarding the foreign medical school approval process. 

Page 56 CUOIT~JIHS-94-28 Foreign Medical School Student Loans 
Appendix IV 

Comments F’rom the Department of 

Education 

See pi 34. 

See p. 34. 

See p. 34. 

Page 3 - ,Ms. Morn 

The Department agrm with the recommendation. In conjunction with publishing a final 

regulation for foreign medical schml approval, the Department will develop internal 

procedures for the review and approval of foreign medical schools. Included in this process 

will be the development of a revised Application for Participation and Program Participation 

Agreement. 

EEiCOMMENDAnON 1.6 . 

GAO recommends that the Secruary of Education develop appropriate guidance for lenders 

and guaranty agencies. 

ED RESPoNa * 

The Department agrees with the recommendation. After the final regulations have been 

published. the NCFMEA operational, and the certification of foreign medical schools 

commences, appropriate notification and guidance will Lx provided to lenders and guaranty 

agencies through the Office of Postsecondary Education. Institutional Panicipadon Division 

(IPD)‘s Weekly Stalus Report that lists all changes in institutional status including institutions 

renewed for approval and those that are terminated from participation. The Department will 

provide current information to lenders and guuanty agencies through Dear Colleague letters. 

GAO recommends that the Secretary of Education assure that approving officials ace 

knowledgeable and staff are properly supervised. 

The Department agrees with the recommendation. The Department will establish internal 

procedures for the miew and approval of foreign medical schooIs based on final regulations. 

The Department wili also assure that staff assigned to the approval function are adequately 

supervised and receive appropriate instruction on the approval process. So that adequate 

coverage is always available for this function, other staff will be cross trained on the 

approval process. ‘Ihe Director, KPD, will provide careful oversight of all staff assigned to 

this function+ 

3ECOhfMEmAnON I.& . 

GAO recommends that the Secretary of Education require applicants for loans to identify 

when they plan to attend a foreign medical rhcml. 

Page 66 GAO/HHHS-94-28 Foreign Medical School Student Lqans 
Appendix IV 

Comments From the Department of 

Education 

See p. 34. 

See p. 40, 

Page 4 - ,Ms. Mom 

The Department agrees in part with the recommendation. The Depanment, as pan of the 

cenificationlrecmification process for foreign medical schools will. upon approval for 

participation in the FFEL program, give each foreign medical school (whether part of a 

foreign university or fretstanding) a unique identification number (OPEID). Thus, for 

purposes of tbe annual FPEL tape dump, students attending foreign medical schools will be 

identitied, the number of loans and their dollar volumes known, and cohon default rates can 

be calculated. 

GAO recommends that, in cases of schools not cooperating with Education in providing 

information, Education should exercise its authority lo prevent or terminate their continued 

eligibility in the guaranteed student loan program. 

ED RESPONSE; 

The Department agrees with the recommendation. The Higher Education Amendments of 

1992 (Pub. L. 102-325) give the Department authority IO determine that a foreign medic&i 

schooi is ineligible for prrticipation in the FFEL program if the foreign medical school dots 

not provide, release, or authorize release of information that the Department may require to 

detcmine the institution’s eligibility to participate in the FFEL program. We propose to 

require foreign medical schools whose eligibility has expired to undergo a complete renewal 

of approval. If, upon review, the 88 currently participating foreign medical schools do not 

meet the Department’s standards of approval, we will consider initiating termination actions 

pursuant to 34 CFR 668 Subpart G. 

BECOMhfENDATIOI’I 2.1, . 

GAO recommends that, once Education’s standatds and processes have ken improved, the 

Secretary share information it oblains on foreign medical schools with state medical boards 

for their use in evaluating the education of Iicensure applicants. 

The Department agrees with tbc recommendation. The Department indeed is inter&ed in 

sharing information with state medical boards. The Department will provide tbc Fakration 

of State Medical Boards (FSMB) with a list of foreign medical schools and the countries 

where they are located. 

Page 57 GAOIHEHS-94-28 Fore@ Me&al School Student L+uuw 
Appendix Iv 

thnmenta From the Deparanent of 

Education 

See p. 40. 

Page 5 - Ms. Mona 

. BECOMMENQA~ON 2.2 

GAO recommends that the Secretary work with the FSMB to determine what information 

that Education gathers that would be of most use tu the state boards. 

The Department agrees with the recommendation. As the Deplmcnt stated under 

recommendation 2. I, we inltnd to share with the FSMB critical information on foreign 

medical schools. The Department periodically will provide the FSMB with a list of approved 

foreign institutions. 

Page 68 GAOIE[EAS-94-28 Foreign Medical School Student Loans 
Appendix V 

Comments From the Federation of State 

Medieal Boards of the United States, Inc. 

October 14,1993 - vie fox, confirmtion copy by mail 

David P. Baine 

Director, Federal Health Care Delivery Xssuee 

Human &soumes Division 

US General Accountin Ofice 

Washington, DC 206 &l 

Dear Mr. Baine: 

I am whiting to provide comment, on behalf of the Federation of State 

&led&l Boards, to the draft report entitled EDUCATlON: Millions in 

Unauthorized Guaranteed Leans Made to U.S. Nationals Attending 

Foreign Medical Schools (Code 101411) which was received by the 

Federation on September 29. We appreciate the exknsion to October 16 

of the deadline for the Federation in provide comment, as confirmed by 

phone with Frank Pasquier on September 30. 

In general, we are h 

p”“d 

hy the thoroughness of the study and tbe 

soundness of the cone usinns and recommeudationa. We are grati:iiz 

the validation provided by the study of the many and com@tx 

facing licensing boards in their attem t to assess the qua& o 

P 

p” medical 

education delivered hg f&tigu medica schools. We hope w study is 

taken to heart and the recommendationa speedily acted upon by C!ongrees 

and the Secretary of Education. We also hope you will somehow convey 

kthekpm riab 

met 

authorities the Federation’s inteteet. on behalf of ila 

Ical hoards, in seeing the recommendations move forward, 

along with the Federation’s of&-r of assistance in any way possible to 

further these ends. 

There are a few sections in the draft which could benefit tirn mod& 

clarification. We have marked B 

of the draft, and these are eucl 

p3&.ed modiikatiom on afhted pages 

OIZ For your easy reference, suggested 

changes are provided for pages 2,5,9,10,19,20, and 21. 

Again, please accept our cbmmendation on a job well done. If you wish to 

di~cuee any of our comments or if we CM otherwise assist you in 

finalizing this *port for nubmission leem feel free Gcontact me or our 

Assistant Executive Vice President, ifate Hill. 

SiIlce*ely, 

Executive Vice JY’reaident 

Enclosures 

cc: Hormoz Rassekh, MD 

I. Kathryn Hill. MEd 

1 

Page 89 GAO/EEHS-94-28 Foreign Medical School Student Loana 
Appendix VI 

Major Contributors to This Report 

1 Seattle Regional 

Office Katherine M. Iritani, Evaluator-in-Charge 

Lori D. Pang, Evaluator 

Desiree W. Whipple, Evaluator 

Evan L. Stall, Jr., Programmer Analyst 

Offke of General Craig H. Winslow, Senior Attorney ? 

1 

Counsel 

Office of Special 

Investigations 

Stephen R. Myt man, Assistant Director, Investigations 

Woodrow Huni ;, Senior Investigator 

(101411) Page 60 GAWHEHS-94-28 Foreign Medical School Student Loam 

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