1. Short title
This Act may be cited as the “Protecting Students from Failing Institutions Act”.
Protecting Students from Failing Institutions Act
A BILL
To clarify that a closure of a branch or campus of an institution of higher education may qualify a borrower for loan discharge under the Higher Education Act of 1965, and for other purposes.
2. Closure of a campus or branch of an institution of higher education
Section 437(c) of the Higher Education Act of 1965 (20 U.S.C. 1087(c)) is amended—
in paragraph (1), by inserting “or the closure of a campus or branch of the institution,” after “closure of the institution”;
in paragraph (3)—
by inserting “or the closing of a campus or branch of the institution” after “closing of the institution”; and
by inserting before the period the following: “and shall not count towards the student’s duration limit for Federal Pell Grants under section 401(c)(5)”; and
by adding at the end the following:
“(6) Campus or branch closure—A borrower who withdraws from an institution not more than 120 days before the date of closure of the campus or branch of the institution in which the borrower was enrolled and such closure would have prevented the borrower from completing the program in which the borrower was enrolled shall, for purposes of discharging such borrower’s loans under paragraph (1) and determining the borrower’s eligibility for additional assistance under this title in accordance with paragraphs (3) and (4), be considered to be a student who is unable to complete the program in which such student is enrolled due to the closure of the campus or branch of the institution.
“(7) Federal Pell Grants—In a case of a borrower that receives a Federal Pell Grant under subpart 1 of part A of this title for an academic year for enrollment in a program at a campus or branch of an institution and such campus or branch closes, even if for purposes of paragraph (1) the borrower is considered to be able to complete the program in which such borrower is enrolled, the borrower may use the remaining amount of the Federal Pell Grant for such academic year at another institution.
“(8) Definition—For purposes of this subsection, the terms “campus” and “branch” include the term “branch campus” as defined in section 600.2 of title 34, Code of Federal Regulations (or a successor regulation).”