The Hidden Loophole
How Predatory Offshore Medical Schools Are Partnering with U.S. Universities to Access Federal Student Aid Funds
For-profit, offshore Caribbean medical schools that are not eligible to participate in Federal Student Aid’s Direct Loan Program are taking advantage of a regulatory loophole to obtain Title IV, Higher Education Act (HEA) funds: concurrent enrollment partnerships with Title IV-eligible U.S. colleges that offer online programs of study.
Under this scheme, the offshore Caribbean medical schools and U.S. colleges encourage American students who are enrolled in the Caribbean medical schools to sign up for second degrees at the U.S. colleges, borrow the maximum amount of federal loans, and use credit balance refunds to pay for cost-of-living expenses and expensive tuition to attend the Title IV-ineligible offshore Caribbean medical schools. 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 (a high percentage of offshore Caribbean medical school students either drop out or fail U.S. medical licensing exams) and an expensive second degree that is unnecessary to become licensed as a physician in the United States. 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.
In this report, we discuss how these predatory, offshore medical schools, partnering with American schools, are taking advantage of students to syphon Title IV funds, and call on the U.S. Department of Education to implement policies to address the regulatory loophole and protect students and preserve the integrity of the Title IV program.
