New Report: Caribbean For-Profit Medical Schools Exploiting Federal Student Aid Funding Loophole
FOR IMMEDIATE RELEASE:
November 30, 2022
MEDIA CONTACT:
press@defendstudents.org
New Report: Caribbean For-Profit Medical Schools Exploiting Federal Student Aid Funding Loophole
Senator Dick Durbin: These schools burden students with crippling student loan debt and less chance of actually becoming a doctor
For more than a decade, U.S. Department of Education funds have provided a steady income stream to Caribbean for-profit colleges that are not approved to receive aid, according to a new report from the Postsecondary Equity & Economics Research (PEER) Project. The analysis, authored by Student Defense Intake & Digital Advocacy Manager Abigail Moats, found these offshore schools encourage students to enroll in secondary, and often unnecessary, degree programs at U.S. colleges concurrent with their medical school programs. Students then max out their federal student aid funding and schools leverage their aid refunds to pay for both programs.
“While the offshore Caribbean medical schools and U.S. schools benefit financially from this partnership, students who participate in these programs face the danger of overborrowing for a subpar medical education and an expensive second degree that is unnecessary to become licensed as a physician in the United States,” the report says. “Meanwhile, an unknown amount of Title IV funding is flowing to foreign for-profit medical schools that have failed to meet the eligibility requirements to participate in the Direct Loan Program.”
“For too long, offshore for-profit medical schools have scammed students and siphoned off taxpayer dollars,” said U.S. Senator and Judiciary Chairman Dick Durbin (D-IL). “PEER Project’s report sheds light on this issue and reveals how foreign for-profit medical schools burden students with crippling student loan debt and less chance of actually becoming a doctor than at quality U.S. medical schools. It is unacceptable that these predatory for-profit medical schools use loopholes to line their own pockets while students and taxpayers are left holding the bag.”
The report found that at least eighteen institutions in the Caribbean are participating in this arrangement and calls on the Department to implement policies to stop these foreign medical schools and their U.S. partners from taking advantage of students and siphoning Title IV funds. Walden University — one of two prominent US-based partner schools — has also come under scrutiny for using predatory and misleading tactics to entice students into enrolling in their programs. Earlier this year, PEER Project partner organization Student Defense filed a federal civil rights lawsuit against Walden alleging the school unfairly targeted Black women students to enroll in the school’s doctorate in business administration program.
“It’s just baffling that the Department has allowed this scheme to go on for so long,” said PEER Project Co-Director Libby DeBlasio Webster. “These offshore schools are systematically duping students into taking on debt for useless degrees, and its federal funding that makes the whole thing possible. The Department should work to close this loophole and stop allowing these shoddy schools from taking advantage of our federal student aid programs for their monetary gain.”
A full copy of the report can be found on the PEER Project website.