(a) 
         The Secretary may offset a debt if:
     
    
        
        (1) 
         The debt is liquidated or certain in amount; and
     
    
        
        (2) 
         Offset is feasible and not otherwise prohibited.
     
    
        
        (b) 
        
        (1) 
         Whether offset is feasible is determined by the Secretary in the exercise of sound discretion on a case-by-case basis, either:
     
    
        
        (i) 
         For each individual debt or offset; or
     
    
        
        (ii) 
         For each class of similar debts or offsets.
     
    
        
        (2) 
         The Secretary considers the following factors in making this determination:
     
    
        
        (i) 
         Whether offset can be practically and legally accomplished.
     
    
        
        (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.
     
    
        
            Code of Federal Regulations
        
        (Authority: 
                20 U.S.C. 1221e-3(a)(1) and 1226a-1, 31
             U.S.C. 3716(b))