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Federal Judge Rules In Favor of Students, Allows Lawsuit Against For-Profit Medical School to Proceed

February 2, 2024

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Federal Judge Rules In Favor of Students, Allows Lawsuit Against For-Profit Medical School to Proceed

A class action lawsuit alleges Saba University School of Medicine & R3 Education Inc. made false statements about student passage rates on the United States Medical Licensing Examination (USMLE). 

On January 31, a federal judge denied Saba University School of Medicine’s motion to dismiss a class action lawsuit filed by Student Defense on behalf of former student Natalia Ortiz. The case seeks to hold Saba and its corporate parent R3 Education, Inc. accountable for years of misrepresentations regarding the percentage of Saba students who pass the United States Medical Licensing Examination (“USMLE”) — a multi-step test required for students to obtain their medical license in the United States. R3 Education is a private-equity backed holding company of for-profit medical colleges. 

Knowing that USMLE passage rates are a critical metric in choosing medical schools, Saba advertises that 98%–100% of its students pass Step 1 of the USMLE on their first attempt. Saba describes this passage rate as an “unprecedented achievement” that is “unmatched by any other international medical school,” “better than most U.S. Schools,” and a “testament to the quality of our education.” Saba assures prospective students that “virtually every Saba student passes the USMLE on their first attempt.” What Saba does not disclose is that only around 50% of the students who enroll actually sit for the USMLE. This statistic is in stark contrast to the roughly 90% of students enrolled at U.S. medical schools that sit for the exam.

Ms. Ortiz and the proposed class are seeking a judgment that Saba deceived prospective students into enrolling and taking on large amounts of student debt to attend. Saba has received over $120 million in federal student aid revenue since it became eligible to receive Title IV funds in 2013. The lawsuit seeks actual and punitive damages along with an injunction to prevent Saba from continuing to deceive prospective students about its USMLE passage rates. The case will now proceed to discovery.

“Saba is one of many predatory for-profit Caribbean medical schools taking advantage of the lack of standards around the calculation of post-graduate licensure rates,” said Student Defense Vice President Alex Elson. “They misrepresent the true quality of the school and deceive students into taking on debt for an education that’s not worth the cost.” 

Caribbean-based medical schools have drawn increased scrutiny in recent years. A 2022 PEER Project report found that many are exploiting a Federal Student Aid loophole to the detriment of students, and U.S. Senator Dick Durbin (D-IL) has introduced legislation to increase oversight and accountability of overseas medical programs. 

Learn more about this case here.