Caribbean medical school and its Park Ridge operator agree to $1.2 million settlement, following FTC allegations the school misled students
A Caribbean medical school with Illinois ties has agreed to pay a $1.2 million settlement, after the Federal Trade Commission alleged that the school lied about its students’ success being placed into residencies and passing a medical licensing exam.
St. James School of Medicine, which has campuses in Anguilla and St. Vincent, allegedly made misleading claims to attract students since at least 2018, according to the FTC. The school and other defendants neither admitted to nor deniedthe allegations, as part of the settlement order, which was approved Friday in U.S. District Court for the Northern District of Illinois.
The settlement order applies to the school itself, as well as the school’s Park Ridge-based operator Kaushik Guha, and Park Ridge-based Delta Financial Solutions, which provides financing for the school’s students. Guha serves as executive vice president of operations of Human Resource Development Services, the Park Ridge-based parent company of the school.
Guha said in a statement Monday that the school has added additional language and clarifications to its website wherever its medical licensing exam pass rates and residency placement rates are mentioned.
“We have chosen to settle with the FTC over its allegations that disclosures on our website and in Delta’s loan agreements were insufficient,” Guha said in the statement. “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.”
St. James is a for-profit school that advertises itself as a lower-cost alternative to U.S. medical schools. Caribbean medical schools are typically for-profit institutions that have sometimes been criticized for having lower admission standards than U.S. medical schools. Guha, however, said in his statement that St. James provides “a high-quality medical education at a tremendous value, opening the door to a medical career to students who would otherwise find it impossible to become a doctor.”
St. James claimed that nearly 97% of its students passed an important standardized test, called the United States Medical Licensing Examination Step 1 Exam, when, in reality, only 35% of those who completed the necessary coursework to take the test passed it, the FTC alleged.
The school also claimed that its students matched into residencies — which is real-world training doctors undergo after they graduate from medical school — 85% to 90% of the time, when the average match rate was actually 63%, according to the FTC.
“St. James lured students by lying about their chances of success,” said Samuel Levine, director of the FTC’s Bureau of Consumer Protection, in a news release Friday.
The FTC also alleged that the defendants marketed financing for tuition and living expenses, but the financing contracts contained language that attempted to waive consumers’ rights under federal law and omit legally required disclosures.
The settlement money will go toward refunds and canceling debt for students who financed their educations at Saint James in the past five years. St. James enrolled about 1,300 students a year between 2016 and 2020, according to the FTC.
