UNITED STATES DEPARTMENT OF EDUCATION

OFFICE OF POSTSECONDARY EDUCATION

Proposed Regulatory Text 

Student Debt Relief 

Negotiated Rulemaking, Session 3 

December 11-12, 2023 

34 CFR PART 30—DEBT COLLECTION 

Subpart A—General 

§ 30.1 What administrative actions may the Secretary take to

collect a debt?

(a) The Secretary may take one or more of the following actions

to collect a debt owed to the United States:

(1) Collect the debt under the procedures authorized in the

regulations in this part.

(2) Refer the debt to the General AccountingGovernment

Accountability Office for collection.

(3) Refer the debt to the Department of Justice for compromise,

collection, or litigation.

(4) Take any other action authorized by law.

(b) In taking any of the actions listed in paragraph (a) of this

section, the Secretary complies with the requirements of the

Federal Claims Collection Standards (FCCS) at 431 CFR parts 900-

904101-105 that are not inconsistent with the requirements of

this part.

(c) The Secretary may—

(1) Collect the debt under the offset procedures in subpart C of

this part;

(2) Report a debt to a consumer reporting agency under the

procedures in subpart C of this part;

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(3) Charge interest on the debt as provided in the FCCS;

(4) Impose upon a debtor a charge based on the costs of

collection as determined under subpart E of this part;

(5) Impose upon a debtor a penalty for failure to pay a debt

when due under subpart E of this part;

(6) Compromise a debt, or suspend or terminate collection of a

debt, under subpart F of this part;

(7) Waive repayment of a debt under subpart G of this part;

(78) Take any other actions under the procedures of the FCCS in

order to protect the United States Government's interests; or

(89) Use any combination of the procedures listed in this

paragraph (c) as may be appropriate in a particular case.

§ 30.9 Severability. If any provision of this part or its

application to any person, act, or practice is held invalid, the

remainder of the part or the application of its provisions to

any other person, act, or practice will not be affected thereby.

* * * * * 

Subpart C-- What Provisions Apply to Administrative Offset?

§ 30.20 To what do §§ 30.20–30.31 apply?

(a)(1)

(i) Sections 30.20–30.31 establish the general procedures used

by the Secretary to collect debts by administrative offset.

(ii) The Secretary uses the procedures established under other

regulations, including § 30.33, What procedures does the

Secretary follow for IRS tax refund Treasury Offset Program

offsets?, 34 CFR part 31, Salary Offset for Federal Employees

Who Are Indebted to the United States Under Programs

Administrated by the Secretary of Education, and 34 CFR part 32,

Salary Offset to Recover Overpayments of Pay or Allowances from

Department of Education Employees, if the conditions requiring

application of those special procedures exists.
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* * * * *

(b) The Secretary does not rely on 31 U.S.C. 3716 as authority 

for offset if: 

(1) The debt is owed by a State or local government; 

(2) The debt, or the payment against which offset would be 

taken, arises under the Social Security Act; or 

(3) The debt is owed under: 

(i) The Internal Revenue Code of 1954; or 

(ii) The tariff laws of the United States.; or

(4) The right to collect the debt first accrued more than ten 

years before initiation of the offset. 

* * * * *

§ 30.23 How must a debtor request an opportunity to inspect and 

copy records relating to a debt? 

* * * * * 

(b) A request filed under paragraph (a) of this section must 

contain: 

(1) All information provided to the debtor in the notice under § 

30.22 or § 30.33(b) that identifies the debtor, and the debt, 

including the debtor’s Social Security number and the program 

under which the debt arose, together with any corrections of 

that identifying information; and 

* * * * * 

§ 30.25 How may a debtor obtain an oral hearing? 

* * * * * 

(c) The Secretary grants a debtor's request for an oral hearing 

regarding the issues identified in the notice under § 

30.22(b)(3)(ii) or § 30.33(b)(3)(ii) only if: 

(1) (i) A statute authorizes or requires the Secretary to 

consider waiver of the indebtedness involved; 
4 

(ii) The debtor files a request for waiver of the indebtedness 

with the request for review filed under paragraph (a) (1) of 

this section; and 

(iii) The question of waiver of the indebtedness turns on an 

issue of credibility or veracity; or 

* * * * * 

§ 30.27 When does the Secretary enter into a repayment agreement 

rather than offset? 

* * * * * 

(c) If the Secretary receives a request filed in accordance with 

this section, the Secretary may enter into a written agreement 

requiring repayment in accordance with, 31 CFR 901.8, 4 CFR 

102.3instead of offsetting the debt. 

* * * * * 

§ 30.29 What procedures apply when the Secretary offsets to 

collect a debt owed another agency? 

The Secretary may initiate offset to collect a debt owed another 

Federal agency if: 

(a) An official of that agency certifies in writing: 

(1) That the debtor owes a debt to the United States; 

(2) The amount of the debt; and 

(3) That the agency has complied with 31 CFR 901.34 CFR 102.3; 

and 

* * * * * 

§ 30.30 What procedures apply when the Secretary requests 

another agency to offset a debt owed under a program or activity 

of the Department? 

(a) The Secretary may request another Federal agency to offset a 

debt owed under a program or activity of the Department if the 

Secretary certifies in writing to the other Federal agency: 

(1) That the debtor owes a debt to the United States; 
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(2) The amount of the debt; and 

(3) That the Secretary has complied with 4 CFR 102.3 31 CFR 

901.3. 

* * * * * 

§ 30.33 What procedures does the Secretary follow for IRS tax 

refundTreasury Offset Program offsets? 

* * * * * 

§ 30.39 Severability. If any provision of this subpart or its 

application to any person, act, or practice is held invalid, the 

remainder of the subpart or the application of its provisions to 

any other person, act, or practice will not be affected thereby. 

Subpart E-- What Costs and Penalties Does the Secretary Impose on 

Delinquent Debtors? 

§ 30.62 When does the Secretary forego interest, administrative 

costs, or penalties? 

(a) For a debt of any amount based on a loan, the Secretary may 

refrain from collecting interest or charging administrative 

costs or penalties to the extent that compromise of these 

amounts is appropriate under the standards for compromise of a 

debt contained in 431 CFR 902103. or to the extent that waiver 

of repayment of these amounts is appropriate under §30.80. 

(b) For a debt not based on a loan, the Secretary may waive, or 

partially waive, the charging of interest, or the collection of 

administrative costs or penalties, if— 

(1) Compromise of these amounts is appropriate under the 

standards for compromise of a debt contained in 4 CFR 103. 31 

CFR part 902; or 

(2) The Secretary determines that the charging of interest or 

the collection of administrative costs or penalties is— 

(i) Against equity and good conscience; or 

(ii) Not in the best interests of the United States. 

(c) The Secretary may exercise waiver under paragraph (b)(1) of 

this section without regard to the amount of the debt. 
6 

(d) The Secretary may exercise waiver under paragraph (b)(2) of 

this section if— 

(1) The Secretary has accepted an installment plan under 4 CFR 

102.1131 CFR 901.8; 

(2) There is no indication of fault or lack of good faith on the 

part of the debtor; and 

(3) The amount of interest, administrative costs, and penalties 

is such a large portion of the installments that the debt may 

never be repaid if that amount is collected. 

(e)(1) The Secretary does not charge interest on any portion of 

a debt, other than a loan, owed by a person subject to 31 U.S.C. 

3717 if the debt is paid within 30 days after the date of the 

first demand for payment. 

(2) The Secretary may extend the period under paragraph (e)(1) 

of this section if the Secretary determines that the extension 

is appropriate. 

§ 30.69 Severability. If any provision of this subpart or its 

application to any person, act, or practice is held invalid, the 

remainder of the subpart or the application of its provisions to 

any other person, act, or practice will not be affected thereby. 

* * * * * 

Subpart F—What Requirements Apply to the Compromise of a Debt or 

the Suspension or Termination of Collection Action? 

§ 30.70 How does the Secretary exercise discretion to compromise 

a debt or to suspend or terminate collection of a debt? 

(a) (1) The Secretary may uses the standards in the FCCS, 31 CFR 

part 902, to determine whether compromise of a debt is 

appropriate if the debt arises under a program administered by 

the Department, unless compromise of the debt is subject to 

paragraph (b) of this section. 

(2) If the amount of the debt is more than $100,000, or such 

higher amount as the Department of Justice may prescribe, the 

Secretary refers a proposed compromise of the debt to the 

Department of Justice for approval, unless the compromise is 
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subject to paragraph (b) of this section or the debt is one 

described in paragraph (e) of this section. 

(b) Under the provisions in 34 CFR 81.36, the Secretary may 

enter into certain compromises of debts arising because a 

recipient of a grant or cooperative agreement under an 

applicable Department program has spent some of these funds in a 

manner that is not allowable. For purposes of this section, 

neither a program authorized under the Higher Education Act of 

1965, as amended (HEA), nor the Impact Aid Program is an 

applicable Department program. 

(c)(1) The Secretary may uses the standards in the FCCS, 31 CFR 

part 903, to determine whether suspension or termination of 

collection action on a debt is appropriate. 

(2) Except as provided in paragraph (e) of this section, 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 outstanding at the time of the referral is more than 

$100,000 or such higher amount as the Department of Justice may 

prescribe; or 

(ii) May suspend or terminate collection action if the amount of 

the debt outstanding at the time of the Secretary's 

determination that suspension or termination is warranted is 

less than or equal to $100,000 or such higher amount as the 

Department of Justice may prescribe. 

(d) In determining the amount of a debt under paragraph (a), 

(b), or (c) of this section, the Secretary deducts any partial 

payments or recoveries already received, and excludes interest, 

penalties, and administrative costs. 

(e) (1) Subject to paragraph (e)(2) of this section, under the 

provisions of 31 CFR part 902 or 903, the Secretary may 

compromise a debt in any amount, or suspend or terminate 

collection of a debt in any amount, if the debt arises under the 

Federal Family Education Loan Program authorized under title IV, 

part B, of the HEA, the William D. Ford Federal Direct Loan 

Program authorized under title IV, part D of the HEA, or the 

Perkins Loan Program authorized under title IV, part E, of the 

HEA, or the Health Education Assistance Loan Program authorized 

by sections 701-720 of the Public Health Service Act, 42 U.S.C. 

292-292o. 
8 

(2) The Secretary refers a proposed compromise, or suspension or 

termination of collection, of a debt that exceeds $1,000,000 and 

that arises under a loan program described in paragraph (e)(1) 

of this section to the Department of Justice for review. The 

Secretary does not compromise, or suspend or terminate 

collection of, a debt referred to the Department of Justice for 

review until the Department of Justice has provided a response 

to that request. 

(f) The Secretary refers a proposed resolution of a debt to the 

Government Accountability Office (GAO) for review and approval 

before referring the debt to the Department of Justice 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. 

(g) 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. 

(h) Nothing in this section authorizes the Secretary to 

compromise, or suspend or terminate collection of, a debt— 

(1) Based in whole or in part on conduct in violation of the 

antitrust laws; or 

(2) Involving fraud, the presentation of a false claim, or 

misrepresentation on the part of the debtor or any party having 

an interest in the claim.

§ 30.79 Severability. If any provision of this subpart or its 

application to any person, act, or practice is held invalid, the 

remainder of the subpart or the application of its provisions to 

any other person, act, or practice will not be affected thereby. 

Subpart G-- Waiver of Federal Student Loan Debts 
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§ 30.80 Waiver of Federal student loan debts. 

The Secretary may waive all or part of any debts owed to the 

Department arising under the Federal Family Education Loan 

Program authorized under title IV, part B, of the HEA, the 

William D. Ford Federal Direct Loan Program authorized under 

title IV, part D, of the HEA, the Federal Perkins Loan Program 

authorized under title IV, part E, of the HEA, and the Health 

Education Assistance Loan Program authorized by sections 701–720 

of the Public Health Service Act, 42 U.S.C. 292–292o, under the 

conditions included in, but not limited to, §§ 30.81 through 

30.90. 

§ 30.81 Waiver when the current balance exceeds the original 

principal balance for low-income borrowers on an IDR plan. (a) 

Pursuant to the authority to waive debt that the Secretary is 

unable to collect in full under the standards prescribed in 31 

U.S.C. 3711(d), and subject to paragraphs (b) and (c) of this 

section, the Secretary may waive the lesser of $20,000 or the 

amount by which a borrower’s loans cumulatively have a total 

outstanding balance that exceeds— 

(1) The original principal balance of the loans for loans 

disbursed before January 1, 2005; 

(2) The balance of the loans on the final day of their grace 

period for loans disbursed on or after January 1, 2005; or 

(3) The total original principal balance of all loans repaid by 

a Federal Consolidation Loan or a Direct Consolidation Loan. 

(b) A borrower is eligible for the waiver described in 

paragraph (a) of this section if- 

(1) The borrower is enrolled in an IDR plan under §§ 682.215, 

685.209, or 685.221 as of a date determined by the Secretary; 

and 

(2) The borrower’s adjusted gross income or other documentation 

of income acceptable to the Secretary demonstrates that the 

borrower’s annual income is equal to or less than 225 percent of 

the applicable Federal Poverty Guideline as described in § 

685.209. 
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(c) A borrower who has received a waiver under § 30.82 is not 

eligible for a waiver under paragraph (a) of this section. 

§ 30.82 Waiver when the current balance exceeds the original 

principal balance for borrowers on the SAVE plan. (a) Subject to 

paragraphs (b) and (c) of this section, the Secretary may waive 

the lesser of $20,000 or the amount by which a borrower’s loans 

cumulatively have a total outstanding balance that exceeds— 

(1) The original principal balance of the loans for loans 

disbursed before January 1, 2005; 

(2) The balance of the loans on the final day of their grace 

period for loans disbursed on or after January 1, 2005; or 

(3) The total original principal balance of all loans repaid by 

a Federal Consolidation Loan or a Direct Consolidation Loan. 

(b) A borrower is eligible for the waiver described in 

paragraph (a) of this section if- 

(1) The borrower is enrolled in the Saving on a Valuable 

Education Plan under § 685.209 as of a date determined by the 

Secretary; and 

(2) The borrower’s adjusted gross income or other documentation 

of income acceptable to the Secretary demonstrates that the 

borrower’s annual income as calculated under §685.209 is either- 

(i) Less than or equal to $125,000; or 

(ii) Less than or equal to $250,000 if the borrower is married 

and files a joint Federal tax return. 

(c) A borrower who has received a waiver under § 30.81 is not 

eligible for a waiver under paragraph (a) of this section. 

§ 30.83 Waiver when a loan first entered repayment 20 or 25 

years ago. (a) The Secretary may waive the outstanding balance 

of a loan if the loan first entered repayment on or before July 

1, 2005, and the borrower only received loans as an 

undergraduate student or a Federal Consolidation Loan or Direct 

Consolidation Loan that repaid only loans the borrower received 

as an undergraduate student. 
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(b) The Secretary may waive the outstanding balance of a loan 

if the loan first entered repayment on or before July 1, 2000, 

and the borrower received loans other than loans received as an 

undergraduate student or a Federal Consolidation Loan or Direct 

Consolidation Loan that repaid loans other than loans the 

borrower received as an undergraduate student. 

(c) For the purpose of this section, a loan enters repayment 

on— 

(1) For a Federal Stafford Loan, a Direct Subsidized Loan, or a 

Direct Unsubsidized Loan, the day after the initial grace period 

ends; 

(2) For a Federal PLUS Loan or a Direct PLUS Loan, the day the 

loan is fully disbursed; or 

(3) For a Federal Consolidation Loan or Direct Consolidation 

Loan, the earliest day as determined under paragraph (c)(1) and 

(2) of this section for any loan that was repaid by that 

consolidation loan. 

§ 30.84 Waiver when a loan is eligible for forgiveness based 

upon repayment plan. The Secretary may waive the entire 

outstanding balance of a loan if the Secretary determines that a 

borrower is not enrolled in, but otherwise meets the eligibility 

requirements for forgiveness under— 

(a) An income-based repayment plan under § 682.215 or § 

685.221; 

(b) An income-contingent repayment plan under § 685.209; or 

(c) An alternative repayment plan under § 685.208(l). 

§ 30.85 Waiver when a loan is eligible for a targeted 

forgiveness opportunity. (a) The Secretary may waive the entire 

outstanding balance of a loan if the Secretary determines that a 

borrower has not successfully applied for, but otherwise meets 

the eligibility requirements for, any loan discharge, 

cancellation, or forgiveness opportunity under part 682 or 685. 

(b) If the conditions for waiver in paragraph (a) of this 

section are met but the loan has been repaid by a Federal 

Consolidation Loan or Direct Consolidation Loan that has an 

outstanding balance, the Secretary may waive the portion of the 
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outstanding balance of the consolidation loan attributable to 

such loan. 

§ 30.86 Waiver based upon Secretarial actions. (a) Subject to 

paragraph (b) of this section, the Secretary may waive the 

entire outstanding balance of a loan associated with attending 

an institution or a program at an institution if the Secretary 

or other authorized Department official has issued a final 

decision that terminated the institution or program’s 

participation in the title IV, HEA programs or denied the 

institution’s request for recertification, or the Secretary or 

other authorized Department official has otherwise determined 

that the institution or the program in which the student was 

enrolled is no longer eligible for its students to receive 

assistance under the title IV, HEA programs and that decision, 

denial, or determination was due, in whole or in part, to any of 

the following circumstances: 

(1) The program or institution has failed to meet an 

accountability standard based on student outcomes established 

under the HEA or its implementing regulations for determining 

eligibility for participation in the title IV, HEA programs. 

(2) The program or institution has failed to deliver sufficient 

financial value to students, including in situations where the 

institution or program has engaged in substantial 

misrepresentations, substantial omissions, misconduct affecting 

student eligibility, or other similar activities. 

(b) The waiver described in paragraph (a) of this section is 

limited to loans that were borrowed to attend that program or 

institution during the period that corresponds with the findings 

or outcomes data that forms the basis for the action described 

in paragraph (a) of this section, unless the Secretary 

determines that the use of a different period is appropriate. 

§ 30.87 Waiver following a closure prior to Secretarial 

actions. (a) Subject to paragraph (b) of this section, the 

Secretary may waive the entire outstanding balance of a loan 

associated with attending a program or institution if the 

program or institution has closed and the Secretary or other 

authorized Department official has made a final determination 

that— 

(1) Based on the most recent reliable data for that program or 

institution, the program or institution has not satisfied, for 

at least one year, an accountability standard based on student 
13

outcomes established under the HEA or its implementing 

regulations for determining eligibility for participation in the 

title IV, HEA programs; or 

(2) The program or institution- 

(i) Failed to deliver sufficient financial value to students 

including in situations where the institution or program has 

engaged in substantial misrepresentations, substantial 

omissions, misconduct affecting student eligibility, or other 

similar activities; and

(ii) Is the subject of a program review, investigation, or any 

other Department action that remains unresolved at the time of 

closure and that is based, in whole or in part, on the conduct 

described in paragraph (a)(2)(i) of this section. 

(b) The waiver described in paragraph (a) of this section is 

limited to loans that were borrowed to attend that program or 

institution during the period that corresponds with the findings 

or outcomes data that forms the basis for the action described 

in paragraph (a) of this section, unless the Secretary 

determines that the use of a different period is appropriate. 

§ 30.88 Waiver for closed Gainful Employment programs with high 

debt-to-earnings rates or low median earnings. 

(a) The Secretary may waive the outstanding balance of a loan 

received by a borrower associated with enrollment in a Gainful 

Employment (GE) program as described in 20 U.S.C. 

1002(b)(1)(A)(i) and (c)(1)(A) if-- 

(1) The program or institution closed; 

(2) The Secretary determines the program was not preparing 

students to become a doctor of medicine or osteopathy or a 

doctor of dental science; and 

(3) For the period in which the borrower received loans for 

enrollment in the program, the Secretary has reliable data 

demonstrating that, for students who received title IV, HEA 

assistance- 

(i)(A) The median annual loan payment of graduates from the 

program is greater than 20 percent of the median annual earnings 

for graduates, minus 150 percent of the applicable Federal 
14

Poverty Guideline for the year being measured or the denominator 

of such calculation is zero or negative; and 

(B) The median annual loan payment of graduates from the 

program is greater than 8 percent of the median annual earnings 

for graduates of the program or the denominator of such 

calculation is zero; or

(ii) The median annual earnings of graduates from the program 

are equal to or less than the median annual earnings for working 

adults aged 25–34, who either worked during the year or 

indicated they were unemployed (i.e., not employed but looking 

for and available to work) when interviewed, with only a high 

school diploma (or recognized equivalent)—

(A) In the State in which the institution is located; or

(B) Nationally, if fewer than 50 percent of the students in the 

program are from the State where the institution is located, or 

if the institution is a foreign institution.

(b) In determining whether a program meets the requirements 

under paragraph (a) of this section, the Secretary-

(1) Identifies a program using the program’s six-digit CIP code 

as assigned by the institution or determined by the Secretary, 

in combination with the institution’s six-digit Office of 

Postsecondary Education ID (OPEID) number and the program’s 

credential level, unless the Secretary does not have reliable 

data at the six digit-level, in which case the Secretary will 

use the four-digit CIP code;

(2) Calculates the annual loan payment based upon the average 

of-

(i) The interest rate on Direct Unsubsidized Loans for 

undergraduate students for the three consecutive award years

ending in the latest completion year for the students whose 

median debt payment is being calculated for graduates of

undergraduate certificate programs, post-baccalaureate 

certificate programs, and associate degree programs; or

(ii) The interest rate on Direct Unsubsidized Loans for 

graduate students for the three consecutive award years ending 

in the latest completion year for the students whose median debt 
15

payment is being calculated for graduates of graduate 

certificate programs and master's degree programs; or 

(iii) The interest rate on Direct Unsubsidized Loans for 

undergraduate students for the six consecutive award years 

ending in the latest completion year for the students whose 

median debt payment is being calculated for graduates of 

bachelor’s degree programs; or 

(iv) The interest rate on Direct Unsubsidized Loans for 

graduate students for the six consecutive award years ending in 

the latest completion year for the students whose median debt 

payment is being calculated for graduates of doctoral programs 

and first professional degree programs; and 

(3) Calculates the median annual earnings of program graduates 

by considering earnings in the third year subsequent to 

graduation. 

(c) The Secretary may also apply the waiver described in 

paragraph (a) of this section for loans received for enrollment 

in a GE program at an institution-- 

(1) If the institution has since closed; 

(2) Prior to the closure, the institution received a majority 

of its title IV, HEA funds from programs that met the conditions 

described in paragraph (a)(3) of this section; and 

(3) The Secretary did not have reliable data to evaluate the 

program’s performance as described in paragraph (a)(3) of this 

section. 

§ 30.89 Waiver when the current balance exceeds the original 

principal balance. (a) Subject to paragraph (b) of this section, 

the Secretary may waive the lesser of $10,000 or the amount by 

which a borrower’s loans cumulatively have a total outstanding 

balance that exceeds- 

(1) The original principal balance of the loans for loans 

disbursed before January 1, 2005; 

(2) The balance of the loans on the final day of their grace 

period for loans disbursed on or after January 1, 2005; or 

(3) The total original principal balance of all loans repaid by 

a Federal Consolidation Loan or a Direct Consolidation Loan. 
16

(b) A borrower who has received a waiver under § 30.81 or § 

30.82 is not eligible for a waiver under paragraph (a) of this 

section. 

§ 30.90 Waiver when the current balance exceeds the original 

principal balance for low-income borrowers not on an IDR plan. 

(a) Pursuant to the authority to waive debt that the Secretary 

is unable to collect in full under the standards prescribed in 

31 U.S.C. 3711(d), and subject to paragraphs (b) and (c) of this 

section, the Secretary may waive the lesser of $10,000 or the 

amount by which a borrower’s loans cumulatively have a total 

outstanding balance that exceeds— 

(1) The original principal balance of the loans for loans 

disbursed before January 1, 2005; 

(2) The balance of the loans on the final day of their grace 

period for loans disbursed on or after January 1, 2005; or 

(3) The total original principal balance of all loans repaid by 

a Federal Consolidation Loan or a Direct Consolidation Loan. 

(b) A borrower is eligible for the waiver described in 

paragraph (a) of this section if- 

(1) The borrower is either not enrolled in an IDR plan under §§ 

682.215, 685.209, or 685.221 or is enrolled in an IDR plan under 

§§ 682.215, 685.209, or 685.221 but has not previously provided 

their adjusted gross income or other documentation of income 

acceptable to the Secretary that demonstrates the borrower’s 

annual income; and 

(2) The borrower’s adjusted gross income or other documentation 

of income acceptable to the Secretary demonstrates that the 

borrower’s annual income is equal to or less than 225 percent of 

the applicable Federal Poverty Guideline as described in § 

685.209. 

(c) A borrower who has received a waiver under §§ 30.81 or 30.82 

is not eligible for a waiver under paragraph (a) of this 

section. 
17

§ 30.91 Severability. If any provision of this subpart or its 

application to any person, act, or practice is held invalid, the 

remainder of the subpart or the application of its provisions to 

any other person, act, or practice will not be affected thereby. 

* * * * * 

§ 682.403 Waiver of FFEL Program loan debt. 

(a) General. 

(1) This section specifies the rules and procedures under 

which--

(i) The Secretary determines that a FFEL Program loan qualifies 

for a waiver of all or a portion of the outstanding balance and 

notifies the lender of any such determination; 

(ii) The lender submits a waiver claim to the applicable 

guaranty agency; 

(iii) The guaranty agency pays the claim, is reimbursed by the 

Secretary, and assigns the loan to the Secretary; and 

(iv) The Secretary grants the waiver. 

(2) For the purposes of this section, references to— 

(i) “The lender” includes the guaranty agency if the guaranty 

agency is the holder of the loan at the time the Secretary 

determines that the loan qualifies for a waiver, except that the 

waiver claim filing requirements applicable to the lender do not 

apply to the guaranty agency; and 

(ii) “The guaranty agency” means the guaranty agency that 

guarantees the loan. 

(b) Determination of qualification for a waiver by the 

Secretary. The Secretary may waive the borrower’s obligation to 

repay up to the entire outstanding balance on an FFEL Program 

loan if the loan qualifies for a waiver under one of the 

following conditions: 

(1) First entered repayment 20 or 25 years ago. (i) The 

Secretary may waive the outstanding balance of a loan if the 

loan first entered repayment on or before July 1, 2005, and the 
18

borrower only received loans as an undergraduate student or a 

Federal Consolidation Loan or Direct Consolidation Loan that 

repaid only loans the borrower received as an undergraduate 

student. 

(ii) The Secretary may waive the outstanding balance of a loan 

if the loan first entered repayment on or before July 1, 2000, 

and the borrower received loans other than loans received as an 

undergraduate student or a Federal Consolidation Loan or Direct 

Consolidation Loan that repaid loans other than loans the 

borrower received as an undergraduate student. 

(iii) For the purpose of this section, a loan enters repayment 

on— 

(A) For a Federal Stafford Loan, the day after the initial 

grace period ends; 

(B) For a Federal PLUS Loan, the day the loan is fully 

disbursed; or 

(C) For a Federal Consolidation Loan, the earliest day as 

determined under paragraph (iii)(A) and (B) of this section for 

any loan that was repaid by that consolidation loan. 

(2) Closed school discharge. The Secretary may waive the 

borrower’s obligation to repay up to the entire outstanding 

balance of a loan where the Secretary determines that a borrower 

has not successfully applied for, but otherwise meets the 

eligibility requirements for, a closed school discharge on that 

loan under § 682.402(d). 

(3) Cohort default rate. For loans received for attendance at 

an institution that lost its eligibility to participate in any 

title IV, HEA program because of its cohort default rate, as 

defined in 20 U.S.C. 1085(m), the Secretary may waive the 

outstanding balance of the loan, provided that the borrower was 

included in the cohort whose debt was used to calculate the 

cohort default rate.

(c) Notification. If the Secretary determines that a loan 

qualifies for a waiver under paragraph (b) of this section, the 

Secretary provides notice to the lender that the lender must-- 

(1) Submit a waiver claim to the applicable guaranty agency; 

and 
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(2) Suspend collection activity, or maintain a suspension of 

collection activity, on the borrower’s FFEL Program loan. 

(d) Claim procedures. 

(1) The guaranty agency must establish and enforce standards 

and procedures for the timely filing by lenders of waiver 

claims. 

(2) The lender must submit a claim for the full outstanding 

balance of the loan to the guaranty agency, within 75 days of 

the date the lender received the notification from the Secretary 

described in paragraph (c) of this section. 

(3) The lender must provide the guaranty agency with the 

following documentation when filing a waiver claim: 

(i) An original or a true and exact copy of the promissory 

note. 

(ii) The notification described in paragraph (c) of this 

section. 

(4) The guaranty agency must review the waiver claim and 

determine whether the claim meets the requirements of paragraph 

(d)(3) of this section. 

(5) If the guaranty agency determines the waiver claim meets 

the requirements of paragraph (d)(3) of this section, the 

guaranty agency must pay the claim within 30 days of the date 

the claim was received by the guaranty agency. 

(6) If the lender receives any payments on the loan from or on 

behalf of the borrower after receiving a claim payment from the 

guaranty agency, the lender must promptly return the payments to 

the sender. 

(7) The Secretary reimburses the guaranty agency for the full 

amount of a claim paid to the lender after the agency pays the 

claim to the lender. 

(8) The guaranty agency must assign the loan to the Secretary 

within 75 days of— 

(i) The date the guaranty agency pays the claim and receives 

the reimbursement payment; or 
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(ii) The date the guaranty agency receives the notification 

described in paragraph (c) of this section if the guaranty 

agency is the lender. 

(9) After the guaranty agency assigns the loan, the Secretary 

may waive the borrower’s obligation to repay up to the entire 

outstanding balance of the loan. 

(10) After the Secretary grants the waiver, the Secretary 

notifies the borrower, the lender, and the guaranty agency that 

the borrower’s obligation to repay the debt or a portion of the 

debt, has been waived. 

(e) Payments received after the Secretary's payment of a waiver 

claim. 

(1) If the guaranty agency receives any payments from or on 

behalf of the borrower on a loan that has been assigned to the 

Secretary in accordance with paragraph (d) of this section, the 

guaranty agency must promptly return these payments to the 

sender. At the same time that the agency returns the payments, 

it must notify the borrower that there is no obligation to make 

payments on the loan after the Secretary has granted a waiver 

unless— 

(i) The borrower received a partial waiver of the outstanding 

balance of the loan; or 

(ii) The Secretary directs the borrower otherwise. 

(2) If the guaranty agency has returned a payment to the 

borrower, or the borrower's representative, with the notice 

described in paragraph (e)(1) of this section, and the borrower 

(or representative) continues to send payments to the guaranty 

agency, the agency must remit all of those payments to the 

Secretary. 

(3) If the Secretary receives any payments from or on behalf of 

the borrower on the loan after the Secretary waives the entire 

outstanding balance of a loan, the Secretary returns the 

payments to the sender.