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updated: 9/10/2013 11:03 AM

Downers Grove-based Devry lures med school rejects

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When he was a child, David Adams pretended to operate on his stuffed animals.

As a teen, the Salt Lake City native became a paramedic. He wanted to train to become a physician after graduating from the University of Utah with a bachelor's degree in health promotion and education in 2009 but was rejected by two dozen U.S. medical schools.

Three years later, he earned a Master of Science in medical health sciences from Touro University Nevada and applied again, Bloomberg Markets will report in its October issue. Adams was accepted to American University of the Caribbean School of Medicine, which is owned by Downers Grove, Illinois-based DeVry Inc.

Adams, now 31, moved with his wife, Jessica, and their two young children to a two-bedroom apartment that smelled of dog urine and had a broken stove on the Dutch part of St. Maarten on Jan. 1. After financing his first two semesters with $67,000 in U.S. government-backed loans, Adams expects to leave medical school with as much as $400,000 in debt -- and about a 20 percent chance of never practicing as a physician in the U.S.

"I understand that I am coming from behind a little bit, attending a Caribbean medical school," Adams says, standing on his apartment's terrace, watching sailboats glide by on the deep-blue waters of Simpson Bay Lagoon.

Rejected Students

Downers Grove-based DeVry, which has two for-profit medical schools in the Caribbean, is accepting hundreds of students who were rejected by U.S. medical colleges. These students amass more debt than their U.S. counterparts -- a median of $253,072 in June 2012 at AUC versus $170,000 for 2012 graduates of U.S. medical schools.

And that gap is even greater because the U.S. figure, compiled by the Association of American Medical Colleges, includes student debt incurred for undergraduate or other degrees, while the DeVry number is only federal medical school loans.

Many DeVry students quit, particularly in the first two semesters, taking their debt with them. While the average attrition rate at U.S. med schools was 3 percent for the class that began in the fall of 2008, according to the AAMC, DeVry says its rate ranges from 20 to 27 percent.

Of those who remained, 66 percent of AUC students and 52 percent of students at DeVry's other Caribbean medical school, Ross University School of Medicine, finished their program -- typically two years of sciences followed by two years of clinical rotations -- on time in the academic year ended on June 30, 2012.

Taxpayer Owes

And though neither AUC nor Ross, in the island nation of Dominica, is accredited by the body that approves medical programs in the U.S., students at both schools are eligible for loans issued by the U.S. Education Department. The loans, which totaled about $310 million in the year ended June 2012, leave the U.S. taxpayer -- not DeVry -- on the hook if students should fail to get jobs and be unable to repay them.

DeVry is also paying hospitals in the U.S. to take its students for the two years of clinical training that they need to complete their degree. U.S. medical schools typically provide the training hospitals benefits such as a faculty appointment and access to a medical school library, not cash per student per week, says Glenn Tung, associate dean for clinical affairs at Brown University's Warren Alpert Medical School, who has studied for-profit medical schools.

AMA Ire

DeVry's pay-for-play model has drawn the ire of the American Medical Association. In June, the state of Texas passed a law prohibiting foreign medical schools from sending students to the state.

Congress needs to examine the law that makes foreign for- profit medical schools eligible for federal loans, says Senator Dick Durbin, a Democrat from DeVry's home state of Illinois.

"These schools are taking advantage of an offshore loophole that allows federal funding to be released to students attending a medical school that is not accredited in the U.S.," Durbin says. "Until Congress acts, these schools will stop at nothing to keep the American taxpayer dollars flowing."

Students Shortchanged

DeVry's policies shortchange students, says David Bergeron, who recently retired as head of postsecondary education at the U.S. Department of Education.

"If they have to make a choice between students and profit, they choose profit," Bergeron says of the for-profit Caribbean schools. "Because their students heavily depend on student loans, it creates risk for the student and the taxpayers throughout the system."

Adds Ernie Yoder, dean of Central Michigan University's newly opened medical school, "I have grave concerns about the financial welfare of some of these kids and how they're led to believe that they will be successful as physicians and be able to pay back their debt."

A DeVry spokesman, Chris Railey, says, "Students who don't succeed academically typically leave school before accumulating a large debt load."

Michael Uva, a 2010 graduate of St. George's in Grenada, twice failed to land a residency spot that would be the next step to practicing medicine in the U.S.

'Unfulfilled Dream'

"I spent my entire life preparing for this career, and I am now 33 years old with massive debt and an unfulfilled dream," Uva says. The Oswego, New York, native has almost $400,000 in medical school loans and currently earns $30 an hour overseeing a blood donation clinic in New Jersey, where he also draws blood.

DeVry acquired AUC in 2011 for $235 million, attracted partly by the school's eligibility for federal loans, says Harold Shapiro, DeVry's chairman and a former president of Princeton University.

Loan Access

"Access to federal student loans is very important for a lot of DeVry programs, including that one," says Shapiro, 78, an economist by training, who plans to retire from DeVry in November after 12 years on the board and five years as chairman. "Obviously, it's part of what makes it work."

DeVry is ramping up its capacity to take on more medical students. It's adding a $30 million building at AUC that students were to begin using in September. Including the 3,500 students at Ross and about 1,300 at AUC, DeVry is currently training some 4,800 would-be doctors. Ross typically enrolls 900 to 950 students per academic year, who start in either January, May or September.

MCAT Scores

That's about seven times the average of 139 for the 2013 graduating class of U.S. med schools, according to figures from the AAMC. St. George's has about 4,900 students.

Many of those students, like Adams, failed to gain admission to U.S. schools, where the mean score on the Medical College Admission Test, or MCAT, was 31.2 out of a possible 45 last year. At DeVry's schools, the average score was 25.

"I don't feel that these schools are very selective all the time and will potentially take students whose failures could be predicted based on their academic record," says Jessica Freedman, a physician who runs MedEdits, a company that advises applicants to medical schools.

DeVry's Shapiro says the school gives prospective students the information they need to decide whether to attend.

Though the U.S. needs more doctors, it has only a limited number of residencies after Congress in 1997 effectively froze the number of positions Medicare would help support.

Graduates are matched with hospitals that want them via an algorithm refined by Alvin Roth, the Stanford University economist who shared the Nobel Memorial Prize in Economic Sciences in 2012.

The National Resident Matching Program says 94 percent of fourth-year students schooled in the U.S. landed a first-year match in 2013, while 53 percent of U.S. citizens trained internationally did.

Getting Matches

DeVry students fare better than the average foreign-trained student. Of the 914 Ross students who applied for residency in 2013, 76 percent, or 699, earned places. Another 41 had preliminary one-year spots.

Of the 268 AUC students who applied for residency, 212, or 79 percent, got matches, and seven more had one-year slots. The remainder of the students failed to win a residency.

To become a pediatric cardiothoracic surgeon, Adams would need to complete three residencies that could take nine years after medical school.

"I realize it's a very small minority getting very, very, very good match spots," he says. "But it's what I have to hold on to."

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