This report evaluates the adequacy of the Department of Education's efforts to approve foreign medical schools for participation in the federal student loan program, and information needed by state medical boards to assess the quality of the education that foreign-trained physicians receive before granting them licenses. Findings indicate that the Department's standards for approving foreign medical schools to participate in the student loan program address only a portion of the standards for medical education covered in the U.S. accreditation process. In addition, not only does the Department do little to assess the adequacy of foreign schools' clinical training programs, but management problems at the Department have resulted in loans being made to students attending medical schools that the Department has neither reviewed nor approved. The state medical boards have also found great difficulty in acquiring information on foreign schools' quality, forcing them to attempt a thus far unsuccessful attempt to get this information themselves. The report contains recommendations to improve the Department's standards and processes for assessing foreign medical schools. Appendices include information on the history of examinations given to foreign- and U.S.-trained physicians, and the methodology for calculating estimates of loans guaranteed. (GLR)