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California Association of Private Postsecondary Schools

Durbin Seeks Probe of Caribbean Schools With U.S. Loan Access

09/12/2013

Bloomberg.  September 10, 2013.  U.S. Senator Dick Durbin called for an examination of for-profit medical schools in the Caribbean that have access to federal student loans yet may be subject to standards below those set for medical students in the U.S.

Two schools, American University of the Caribbean School of Medicine and Ross University School of Medicine, have accepted hundreds of students turned down by U.S. medical colleges. These students amass more debt than their U.S. counterparts and have a higher dropout rate, Durbin said in a letter late yesterday to Education Secretary Arne Duncan, citing a report by Bloomberg Markets. 

For-profit college companies have faced increased scrutiny from federal and state officials over their recruiting practices, graduation rates and high student debt levels. Students at AUC and Ross, owned by for-profit operator DeVry Inc. (DV), and St. George’s University School of Medicine, also based in the Caribbean, received about $450 million in U.S. student loans in the year ended June 2012.

“It is my understanding that they are able to do this because of a 1992 loophole that allowed a small number of foreign medical schools to qualify for federal funds under lower standards than other medical schools,” Durbin, a Democrat from Illinois, said in the letter. “If this is true, it seems to allow these schools access to millions in federal funds with little to no oversight or accountability.”

DeVry’s medical schools are approved for the student-loan program because the Education Department’s National Committee on Foreign Medical Education and Accreditation reviews standards used by foreign countries to accredit medical schools and determines whether they are comparable to standards used in the U.S., Ernie Gibble, a spokesman for Downers Grove, Illinois-based DeVry, said in an e-mail.

“They met high academic standards, not due to a ‘loophole,’” Gibble said.