A bill to make students studying in foreign medical schools ineligible for Federal loans or loan guarantees unless the medical school meets certain accreditation standards.

Prohibits any loan from being made by the United States, or under any program which receives Federal financial assistance, to a student in a medical school outside the United States or Canada unless the school meets accreditation standards established under this Act. Prohibits any loan guarantee from being made by the United States for a student in such a medical school unless the school meets such standards.

Directs the Secretary of Education and the Administrator of Veterans Affairs to jointly make arrangements under which such medical school can be accredited under the same system as those located in the United States or Canada.

Requires such schools to submit applications and pay accrediting costs.

Prohibits such a school from applying for accreditation if more than 25 percent of its students in any academic year are not residents of the country in which it is located. Authorizes the Secretary and the Administrator, upon application, to waive such limitation if they determine that the purpose for which the limitation is imposed will not be served by applying it to the applicant school.