Python solution:

def gradingStudents(grades):

    # Write your code here
round_grades=[]
for i in grades:
    if i<38:
        round_grades.append(i)
    elif (i+(5-i%5))-i < 3:
        x=i+(5-i%5)
        round_grades.append(x)
    else:
        round_grades.append(i)
return round_grades