(a) Based upon sufficient evidence to substantiate the grounds, the Secretary may grant an exception to the repayment requirement in § 304.30(j), in whole or part, if the scholar—

1. (1) Is unable to continue the course of study in § 304.30 or perform the service obligation because of a permanent disability; or
2. (2) Has died.

(b) Based upon sufficient evidence to substantiate the grounds, the Secretary may grant a deferral of the repayment requirement in § 304.30(j) during the time the scholar—

1. (1) Is engaging in a full-time course of study at an institution of higher education;
2. (2) Is serving on active duty as a member of the armed services of the United States;
3. (3) Is serving as a volunteer under the Peace Corps Act; or

4. (4) Is serving as a full-time volunteer under title I of the Domestic Volunteer Service Act of 1973.

   (Authority: 20 U.S.C. 1462(h))