S. 3757: Foreign Medical School Accountability Fairness Act of 2026

This bill, titled the Foreign Medical School Accountability Fairness Act of 2026, aims to amend the Higher Education Act of 1965 to create uniform eligibility criteria for graduate medical schools located outside of the United States and Canada. The primary objective is to enhance accountability and protect U.S. students and taxpayer investments in education.

Purpose

The bill seeks to establish consistent standards for foreign graduate medical schools so that these institutions are held to the same requirements as domestic medical schools. It is intended to ensure that federal funds allocated to students studying at these foreign institutions are used responsibly and effectively.

Key Findings

• Historically, three for-profit Caribbean medical schools have received approximately 75% of federal funding for students attending foreign medical schools, despite being exempt from the same standards required of other schools.
• Federal and educational authorities recommend that all foreign graduate medical schools should meet identical eligibility standards to access federal funding.
• The dropout rate at U.S. medical schools is significantly lower (averaging 3.2%) compared to the high rates at for-profit Caribbean schools, which can reach up to 30%.
• Matching rates for residencies are lower for graduates from foreign medical schools compared to those from U.S. allopathic and osteopathic schools.
• Students attending for-profit medical schools outside of the U.S. typically incur higher debt compared to their peers in U.S. medical schools.

Repeal of Grandfather Provisions

The bill proposes the repeal of certain 'grandfather' provisions that currently allow some foreign medical schools to remain eligible for federal funding without meeting the updated standards. The amendments will require:

• At least 60% of students enrolled and graduated from these schools to not be under certain disqualifying categories set by federal law.
• At least 75% of the students or graduates taking the required examinations must achieve passing scores annually.

Furthermore, the eligibility for these schools to participate in federal loan programs will expire on July 1 following the enactment of this legislation.

Loss of Eligibility

Should a graduate medical school lose its eligibility to participate in federal loan programs due to the new standards, students who were already enrolled will still be able to receive financial aid under certain conditions. This eligibility will continue until:

• The student withdraws from the program.
• The student completes their program of study.
• The fourth June 30 following the loss of eligibility.

Relevant Companies

• EDMC - Education Management Corporation may face impacts regarding its funding and operational viability due to changes in federal loan eligibility affecting foreign medical schools.
• STRA - Strayer Education, Inc. could be indirectly affected as it operates in the education sector and may see shifts in competition with foreign medical schools.