Why It Matters
Federal agencies generally must seek repayment of overpayments even when the agency made the error, but debt waiver statutes allow some relief on fairness grounds. A new Congressional Research Service (CRS) report describes how those exceptions differ across programs, affecting when recipients can keep money paid to them in error.
The authorities appear in more than 50 sections of the U.S. Code, and most expressly require that the debtor did not contribute to creating the debt. Some waivers are discretionary, while others are mandatory when statutory conditions are met. That distinction affects whether an agency has a choice to make once a recipient meets the applicable conditions.
The Big Picture
The governmentwide collection framework permits agencies to compromise debts or stop collection in specified circumstances, including when a debtor cannot pay or collection costs would exceed the amount recovered. Neither that framework nor its implementing standards expressly makes fairness or public policy a reason to depart from collection. The distinction separates general debt-collection tools from additional waiver authorities, which can apply to a single program or a broader range of debts.
Social Security law bars recovery of certain overpayments from recipients who were not at fault when recovery would defeat the law’s purposes or offend equity and good conscience. The Social Security Administration estimated that its old-age, survivors and disability insurance programs made $9.3 billion in overpayments in fiscal 2025, according to CRS.
Under the agency’s waiver rules, a recipient’s ability to meet ordinary and necessary living expenses can determine whether recovery would defeat the programs’ purposes. The rules treat detrimental reliance on an overpayment as a separate ground for waiver. The standards distinguish between the effect of repayment on living expenses and actions a recipient took in reliance on the payment.
As of the report’s publication, no equity-and-good-conscience waiver authority applied to federal student loans. The Biden administration considered whether authorities in other programs could inform the Department of Education’s use of more general waiver authority for those loans.
The Department of Veterans Affairs has a distinct authority covering certain loans it makes or guarantees. It may waive qualifying debts following default or loss of property when collection would be against equity and good conscience.
The Bottom Line
Congress can add fairness-based waiver authority where it does not exist, change existing standards or limit or eliminate that authority. Those choices require weighing relief from hardship against considerations including program integrity and federal costs.
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