Protecting Students from Failing Institutions Act

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. 1. Short title This Act may be cited as the Protecting Students from Failing Institutions Act 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) (1) in paragraph (1), by inserting or the closure of a campus or branch of the institution, closure of the institution (2) in paragraph (3)— (A) by inserting or the closing of a campus or branch of the institution closing of the institution (B) 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) (3) 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 branch branch campus section 600.2 .

Summary: Protecting Students from Failing Institutions Act - Amends title IV (Student Assistance) of the Higher Education Act of 1965 to require the Secretary of Education to discharge a borrower's liability on a loan under the Federal Family Education Loan (FFEL) program if the student borrower, or the student on whose behalf a parent borrowed, is unable to complete the program in which such student is enrolled due to the closing of a campus or branch of the institution of higher education (IHE). Prohibits a student's period of attendance at a campus or branch that closed and prevented the student from completing the student's course of study from: (1) being considered in calculating the student's period of eligibility for additional assistance under title IV, or (2) counting towards the student's duration limit for Federal Pell Grants. Provides such liability discharge and eligibility protections to borrowers who withdraw from an IHE no more than 120 days before the closure of the campus or branch of the IHE at which they are enrolled if that closure would have prevented them from completing the program in which they were enrolled. Allows a borrower who receives a Federal Pell Grant for an academic year for enrollment in a program at an IHE campus or branch that closes to use the remaining amount of the Federal Pell Grant for such academic year at another IHE even if the borrower is considered able to complete the program in which the borrower is enrolled.