CFR > Title 34 - Education > SUBTITLE A—Office of the Secretary, Department of Education > PART 30—DEBT COLLECTION > SUBPART F—What Requirements Apply to the Compromise of a Debt or the Suspension or Termination of Collection Action? (§30.70 to §30.70) > 30.70—How does the Secretary exercise discretion to compromise a debt or to suspend or terminate collection of a debt?

30.70—How does the Secretary exercise discretion to compromise a debt or to suspend or terminate collection of a debt?

(a) The Secretary uses the standards in the FCCS, 4 CFR part 103, to determine whether compromise of a debt is appropriate if—
(1) The debt must be referred to the Department of Justice under this section; or
(2) The amount of the debt is less than or equal to $20,000 and the Secretary does not follow the procedures in paragraph (e) of this section.
(b) The Secretary refers a debt to the Department of Justice to decide whether to compromise a debt if—
(1) The debt was incurred under a program or activity subject to section 452(f) of the General Education Provisions Act and the initial determination of the debt was more than $50,000; or
(2) The debt was incurred under a program or activity not subject to section 452(f) of the General Education Provisions Act and the amount of the debt is more than $20,000.
(c) The Secretary may compromise the debt under the procedures in paragraph (e) of this section if—
(1) The debt was incurred under a program or activity subject to section 452(f) of the General Education Provisions Act; and
(2) The initial determination of the debt was less than or equal to $50,000.
(d) The Secretary may compromise a debt without following the procedure in paragraph (e) of this section if the amount of the debt is less than or equal to $20,000.
(e) The Secretary may compromise the debt pursuant to paragraph (c) of this section if—
(1) The Secretary determines that—
(i) Collection of any or all of the debt would not be practical or in the public interest; and
(ii) The practice that resulted in the debt has been corrected and will not recur;
(2) At least 45 days before compromising the debt, the Secretary publishes a notice in the Federal Register stating—
(i) The Secretary's intent to compromise the debt; and
(ii) That interested persons may comment on the proposed compromise; and
(3) The Secretary considers any comments received in response to the Federal Register notice before finally compromising the debt.
(f) (1) The Secretary uses the standards in the FCCS, 4 CFR part 104, to determine whether suspension or termination of collection action is appropriate.
(2) The Secretary—
(i) Refers the debt to the Department of Justice to decide whether to suspend or terminate collection action if the amount of the debt at the time of the referral is more than $20,000; or
(ii) May decide to suspend or terminate collection action if the amount of the debt at the time of the Secretary's decision is less than or equal to $20,000.
(g) In determining the amount of a debt under paragraphs (a) through (f) of this section, the Secretary excludes interest, penalties, and administrative costs.
(h) Notwithstanding paragraphs (b) through (f) of this section, the Secretary may compromise a debt, or suspend or terminate collection of a debt, in any amount if the debt arises under the Guaranteed Student Loan Program authorized under title IV, part B, of the Higher Education Act of 1965, as amended, or the Perkins Loan Program authorized under title IV, part E, of the Higher Education Act of 1965, as amended.
(i) The Secretary refers a debt to the General Accounting Office (GAO) for review and approval before referring the debt to the Department of Justice for litigation if—
(1) The debt arose from an audit exception taken by GAO to a payment made by the Department; and
(2) The GAO has not granted an exception from the GAO referral requirement.
(j) Nothing in this section precludes—
(1) A contracting officer from exercising his authority under applicable statutes, regulations, or common law to settle disputed claims relating to a contract; or
(2) The Secretary from redetermining a claim.

Code of Federal Regulations

(Authority: 20 U.S.C. 1082(a) (5) and (6), 1087hh, 1221e-3(a)(1), 1226a-1, and 1234a(f), 31 U.S.C. 3711(e) )

Code of Federal Regulations

[53 FR 33425, Aug. 30, 1988]