GAO Report

U.S. Student Loans to Those Attending Foreign Medical Schools Important But Require More Oversight

August 09, 2010 05:00 pm News Staff

A recently released U.S. Government Accountability Office, or GAO, report investigates the performance of international medical graduates, or IMGs -- which the GAO defines as both U.S. citizens and foreign nationals enrolled in foreign medical schools -- and urges better monitoring of foreign medical schools that participate in the federal student loan program.

The GAO's report to Congress, titled "Foreign Medical Schools: Education Should Improve Monitoring of Schools That Participate in the Federal Student Loan Program(," makes several recommendations to the U.S. Department of Education about the lack of consumer data on foreign medical schools and the department's oversight of pass rates at foreign medical schools whose students take the U.S. Medical Licensing Examination, or USMLE.

"Little is known about IMGs with respect to how much they borrow overall or the outcome of their medical studies, leading some policymakers to question the return on investment in IMGs," the report says.

The federal government, through the Federal Family Education Loan program administered by the Education Department, loaned U.S. students enrolled at foreign free-standing medical schools $1.5 billion between 1998 and 2008, according to the report.

Although that amount represents less than 1 percent of all federal student loans made during the same period, borrowing has grown by more than 300 percent because of increases in tuition, student enrollments and the availability of other loan funds.

Foreign medical schools that participate in the loan program have to meet certain statutory requirements. One requirement has been that 60 percent of their students who take the USMLE must pass the test. Beginning last month, however, Congress increased that must-pass percentage to 75 percent of students.

Although most foreign medical schools have met the 60 percent pass rate requirement, only 11 percent would likely meet the new 75 percent pass rate, the GAO estimates.

The report recommends that the Education Department

  • collect consumer information, such as student debt levels and graduation rates, from foreign medical schools that participate in the loan program and make that information available publicly;
  • require foreign medical schools to submit their institutional pass rate data to the department annually;
  • verify data submitted by the schools by, for example, entering into a data-sharing agreement with the testing organizations; and
  • evaluate the potential impact of the higher pass rate requirement on school participation in the federal student loan program.

According to the report, the Education Department has not been able to fully enforce the institutional pass rate requirement on foreign medical schools. One reason is that private organizations that administer each step of the exam have refused to release student scores on grounds that the information is proprietary.

That may change, however, because two organizations have been negotiating with schools for the release of aggregate student performance data. As a result, Education Department officials already have been planning to require pass rate data every year.

The report notes that the Education Department agrees with and plans to move forward on the GAO's recommendations. The report also relates HHS' concern that increasing the pass rate requirement would "adversely affect federal student loan availability for future students attending foreign medical schools."

"IMGs contribute a significant percentage of primary care residents in the United States," HHS comments in the report.

The report's authors note that IMGs are concentrated in the eastern United States and agree that a larger proportion of them tend to practice in primary care than do U.S.-educated graduates.

Thus, the report concludes that the federally guaranteed student loans have a valuable role to play in funding students to study medicine at foreign schools.

"For individual Americans, the loans represent the single most important avenue available to finance their medical education, without which they would not become physicians," says the report.

"For the nation as a whole, these loans help assure a steady supply of the U.S. physician workforce. The fact that foreign-educated doctors, including U.S. citizens, are more likely than their domestically educated peers to practice primary care medicine fulfills an ever-increasing demand for such physicians."