Saturday, November 5, 2022

St. James School of Medicine settles with the FTC: Should Foreign Medical Schools Participate in the Federal Student Loan Program?

 Last spring, the Federal Trade Commission settled its case against St. James School of Medicine, a foreign medical school operating from two Caribbean campuses.

According to the FTC, the school lied to students "about their chances of success--both in passing a medical school standardized test, and in matching with a residency program after graduating."

The FTC accused St. James of falsely representing that its pass rate for an important medical licensing exam was 93 percent when in fact it was only 35 percent. In addition, the agency said that the school falsely claimed that its residency placement rate was similar to other medical schools and that its placement rate was 20 percent lower than advertised.

St. James agreed to pay $1.2 million to more than a thousand students, including $850,000 in refunds to approximately 1,300 students and $350,000 in canceled debt.

Is this a big deal? No. Dividing $850,000 among 1,376 beneficiaries means that each student will get a measly 620 bucks.  That's a drop in the bucket compared to the medical school's tuition price.

Are the good folks at St. James sorry about allegedly misrepresenting important facts to its students? I don't think so. 

A spokesperson for the school issued a public statement saying:

We have chosen to settle with the FTC over its allegations that disclosures on our website and in Delta’s loan agreements were insufficient. While we strongly disagree with the FTC’s approach to this matter, we did not want a lengthy legal process to distract from our mission of providing a quality medical education at an affordable cost.

Moreover, St. James "stoutly dispute[d]" the FTC's accusation that it misrepresented pass rates on the licensing exam, saying:

Our marketing materials accurately stated a 94% USMLE Step 1 pass rate. This figure represented the 2019 first-time pass rate for SJSM-Anguilla students who cleared the NBME requirement, which is consistent with how other medical schools track and report their USMLE pass rate.

In short, the FTC's dispute is a tempest in a teapot, leaving two important questions unanswered. First, why is the federal government loaning students money to attend foreign medical schools? Doesn't the United States have enough medical schools operating inside the country?

And second, who owns St. James's parent corporation, Human Resources Development Services, Inc?

My guess is that private equity funds own big pieces of St. James School of Medicine and that most people in those funds don't give a damn about medical education. 


  1. I have myself wondered about your first question, "why is the federal government loaning students money to attend foreign medical schools?" Maybe the answer is related to your second question, "Doesn't the United States have enough medical schools operating inside the country?" No, the US doesn't produce enough of its own medical professionals -- for over one-hundred years the AMA has fought to keep those numbers as low as possible, and now we are paying the price.
    PS. I just saw this bit of wisdom regarding the health care system that I wanted to pass along. I am certain that readers will be able to confirm parts of the process that Doctorow describes:
    "This is the problem with monopolies: once there's a monopoly in your supply chain, everyone else in the supply chain has to form a monopoly or a cartel, or the monopoly will devour them. That's how the US got its infinitely cursed health-care system. Big Pharma merged to monopoly and price-gouged hospitals. Hospitals formed regional monopolies to fight pharma prices – and then gouged the insurers. The insurers merged with one another and divided up the country like the Pope dividing up the New World, and fought hospital pricing.
    The whole health supply chain is monopolized, except for the patients at one end (paying higher prices for worse care) and the health care workers at the other end (getting paid less to work under worse conditions). The giants that run the industry may fight one another over how to divide the pie, but they all agree that we should get crumbs."
    Cory Doctorow on American Health Care System 11-7-2022

  2. Thank you for sharing such great thoughts. Very impressive