UNITED STATES DEPARTMENT OF EDUCATION

OFFICE OF POSTSECONDARY EDUCATION

Proposed Regulatory Text for Questions 1-4 

Student Debt Relief 

Negotiated Rulemaking, Session 2 

November 6-7, 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 Accounting 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 314 CFR parts 900-

904 101-105 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; 
2 

(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. 

* * * * * 

* * * * * 

§ 30.62 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 part 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 431 CFR part 

902103; or 

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

the collection of administrative costs or penalties is— 
3 

(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. 

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

this section if— 

(1) The Secretary has accepted an installment plan under 431 CFR 

901.8102.11; 

(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. 

* * * * * 

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 
4 

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 

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), 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) 
5 

(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, of the Health Education Assistance Loan Program authorized 

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

292-292o. 

(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 
6 

(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. 

Subpart G Waiver of Federal Student Loan Debts 

§ 30.80 Waiver of Federal student loan debts. 

(a) General. 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 described in this section including but not 

limited to those described in paragraphs (b)-(g) of this 

section. 

(b) Current balance exceeds the original principal balance. The 

Secretary may waive [all or a portion of ] the amount by which a 

borrower’s total outstanding balance exceeds the original 

principal balance of the loan, including if the loan is a 

Federal Consolidation Loan or a Direct Consolidation Loan, the 

total original principal balance of all loans repaid by such 

loan, if— 

(i) The loan was in repayment for at least XX months by no later 

than July 1, 2025; and 

[(ii) BORROWER ELIGIBILITY REQUIREMENTS]. 

(c) First entered repayment 25 years ago. (1) The Secretary may 

waive the outstanding balance of a loan if the loan was in 

repayment, including periods when the loan was in default, 

deferment, or forbearance, for at least 300 months by no later 

than July 1, 2025. 

(2) For the purpose of this paragraph (c), a loan enters 

repayment on— 

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

Direct Unsubsidized Loan, the day after the initial grace period 

ends; 

Commented [A1]: The entirety of this section is new so 

we are not showing it as a redline.

Commented [A2]: Question for negotiators: Should this 

kind of language be considered for inclusion in the draft 

rule, and if so how might the Department further define it?

Commented [A3]: Question for negotiators: We are 

interested in thoughts for how to define this period such 

that a borrower would have likely paid off their in-school 

interest.

Commented [A4]: Question for negotiators: What 

requirements, if any, should the department include?
7

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

loan is fully disbursed; or

(iii) For a Federal Consolidation Loan or Direct Consolidation 

Loan, the earliest day as determined under paragraphs (c)(2)(i) 

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

consolidation loan.

(d) Forgiveness based upon repayment plan. (1) The Secretary may 

waive the outstanding balance of a loan where the Secretary 

determines that a borrower is not enrolled in, but otherwise 

meets the eligibility requirements for forgiveness under—

(i) An income-based repayment plan under § 682.215 or § 685.221;

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

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

(e) Targeted forgiveness programs. (1) The Secretary may waive 

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—

(i) Public Service Loan Forgiveness under § 685.219; 

(ii) Closed School Discharge under § 674.33(g), § 682.402(d), or 

§ 685.214; 

(iii) Borrower Defense to Repayment under part 685, subpart D; 

or

(iv) Any other loan discharge, cancellation, or forgiveness 

program under parts 682 or 685.

(f) Gainful employment. (1) For loans received for enrollment 

in a gainful employment (GE) program, as described in 20 U.S.C. 

1002(b)(1)(A)(i) and (c)(1)(A), the Secretary may waive 

repayment if the following conditions are met:

(i) The Secretary determines that the GE program has failed the 

debt-to-earnings (D/E) rates measure, or has failed the earnings 

premium measure, under paragraph (f)(2) of this section in two 

out of any three consecutive award years for which the program’s 

D/E rates or earnings premium, as applicable, are calculated. 
8

(ii) The borrower—

(A) Completed the program and the borrower was in the cohort 

whose debt was used to calculate the failing D/E rates or 

earnings premium; or 

(B) Withdrew from the program within—

(1) Four award years prior to the most recent award year in the 

cohort period used to calculate the failing D/E rates or 

earnings premium, for a bachelor’s degree, doctoral degree, or 

first professional degree program; 

(2) Two award years prior to the most recent award year in the 

cohort period used to calculate the failing D/E rates or 

earnings premium for an associate or master’s degree program; or

(3) The same award year as the most recent award year in the 

cohort period used to calculate the failing D/E rates or 

earnings premium for a certificate program.

(iii) The borrower did not submit an acknowledgment under § 

668.605.

(2) For the purpose of this paragraph (f)—

(i) The Secretary calculates D/E rates and the earnings premium 

in accordance with §§ 668.403, 668.404, and 668.405, beginning 

with the first award year that the Secretary calculates D/E 

rates and the earnings premium for a program under part 668, 

subpart Q; and 

(ii) For award years 2015-2022 and any subsequent award year 

where the Secretary does not calculate D/E rates and the 

earnings premium for a program under part 668, subpart Q for 

reasons other than those described in § 668.403(f) or § 

668.404(d), as applicable, the Secretary will calculate the 

measures by [using available data and a methodology that 

reasonably approximates those described in §§ 668.403, 668.404, 

and 668.405].

(g) Cohort default rates. For loans received for attendance at 

an institution that lost its eligibility to participate in any 

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

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

repayment of the loan provided that the borrower was included in 
9 

the cohort whose debt was used to calculate the cohort default 

rate.

* * * * * 

§ 682.403 Waiver of FFEL Program loan debt. 

Waivers. 

(1) The Secretary may waive the outstanding balance on an FFEL 

Program loan if the loan would qualify for a waiver under-- 

(i) 34 CFR 30.80(b)(2); 

(ii) 34 CFR 30.80(b)(3)(i); or 

(iii) 34 CFR 30.80(b)(4)(ii). 

(2) After determining that a loan qualifies for a waiver under 

paragraph (a)(1) of this section, the Secretary may direct the 

lender to submit a claim to the guaranty agency so the loan can 

be assigned to the Secretary. 

(3) After the loan is assigned, the Secretary may waive all or a 

portion of the loan in accordance with 34 CFR 30.80. 

(b) Lender and guaranty agency actions. 

(1) If the Secretary determines that a loan qualifies for a 

waiver under paragraph (a)(1) of this section— 

(i) The Secretary notifies the lender that the loan qualifies 

for a waiver; 

(ii) The lender must submit a claim to the guaranty agency, 

within 60 days of the date the lender received the notification, 

that includes the following documentation: 

(A) An original or a true and exact copy of the promissory note. 

(B) The notification described in paragraph (b)(1)(i) of this 

section. 

Commented [A5]: 682.403 is currently reserved, so this 

entire section is new. It is not shown as redline.
10

(2) If the claim meets the requirements of paragraph (b)(1)(ii) 

of this section, the guaranty agency must pay the claim 

submitted by the lender.

(3) The Secretary reimburses the guaranty agency for a claim 

paid to the lender after the agency pays the claim to the 

lender.

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

within 45 days of the date the guaranty agency pays the claim 

and receives the reimbursement payment or within 45 days of the 

date the guaranty agency receives the notification described in 

paragraph (a)(2) of this section if the guaranty agency is the 

lender.