Protecting Students from Failing Institutions Act

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.

[Congressional Bills 113th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4860 Introduced in House (IH)]

113th CONGRESS
  2d Session
                                H. R. 4860

 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.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             June 12, 2014

   Ms. Hahn introduced the following bill; which was referred to the 
                Committee on Education and the Workforce

_______________________________________________________________________

                                 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.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Protecting Students from Failing 
Institutions Act''.

SEC. 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--
            (1) in paragraph (1), by inserting ``or the closure of a 
        campus or branch of the institution,'' after ``closure of the 
        institution'';
            (2) in paragraph (3)--
                    (A) by inserting ``or the closing of a campus or 
                branch of the institution'' after ``closing of the 
                institution''; and
                    (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)''; and
            (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' and `branch' include the term `branch campus' as 
        defined in section 600.2 of title 34, Code of Federal 
        Regulations (or a successor regulation).''.
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