(a) The Secretary may offset a debt if:

1. (1) The debt is liquidated or certain in amount; and
2. (2) Offset is feasible and not otherwise prohibited.

(b)

1. (1) Whether offset is feasible is determined by the Secretary in the exercise of sound discretion on a case-by-case basis, either:

   1. (i) For each individual debt or offset; or
   2. (ii) For each class of similar debts or offsets.

2. (2) The Secretary considers the following factors in making this determination:

   1. (i) Whether offset can be practically and legally accomplished.
   2. (ii) Whether offset will further and protect the interests of the United States.

(c) The Secretary may switch advance funded grantees to a reimbursement payment system before initiating an offset.

(Authority: 20 U.S.C. 1221e-3(a)(1) and 1226a-1, 31 U.S.C. 3716(b))