§ 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?

Cross Reference

Link to an amendment published at 81 FR 76070, Nov. 1, 2016.

(a)

(1) The Secretary uses the standards in the FCCS,

4

31 CFR part

103

902, 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

the debt arises under a program administered by the Department, unless compromise of the debt is subject to paragraph (b) 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

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

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

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 uses the standards in the FCCS,

4

31 CFR part

104

903, to determine whether suspension or termination of collection action on a debt is appropriate.

(2)

The Secretary - (

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

$20

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

(ii) May

decide to

suspend or terminate collection action if the amount of the debt outstanding at the time of the Secretary's

decision is

determination that suspension or termination is warranted is less than or equal to

$20

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

(

g

d) In determining the amount of a debt under

paragraphs

paragraph (a)

through

, (

f

b), or (c) of this section, the Secretary deducts any partial payments or recoveries already received, and excludes interest, penalties, and administrative costs.

(

hparagraphs

e)

Notwithstanding

(

b

1)

through

Subject to paragraph (

f

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

Guaranteed Student

Federal Family Education Loan Program authorized under title IV, part B, of the

Higher Education Act of 1965, as amended,

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

Higher Education Act of 1965, as amended. (i

HEA.

(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

General Accounting

Government Accountability Office (GAO) for review and approval before referring the debt to the Department of Justice

for litigation if -

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

g) Nothing in this section

precludes -

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.

(Authority: 20 U.S.C. 1082(a) (5) and (6), 1087a, 1087hh, 1221e-31221e–3(a)(1), 1226a-11226a–1, and 1234a(f), 31 U.S.C. 3711(e) )

[53 81 FR 3342576070, AugNov. 301, 19882016]