(a) If the statute under which waiver or administrative review is sought is mandatory, that is, if it prohibits the agency from collecting the debt prior to the agency’s consideration of the request for waiver or review (see Califano v. Yamasaki, 442 U.S. 682 (1979)), then collection action must be suspended until either

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(1) The agency has considered the request for waiver/review, or

(2) The applicable time limit for making the waiver/review request, as prescribed in the agency’s regulations, has expired and the debtor, upon proper notice, has not made such a request.

(b) If the applicable waiver/review statute is permissive, that is, if it does not require all requests for waiver/review to be considered, and if it does not prohibit collection action pending consideration of a waiver/review request (for example, 5 U.S.C. § 5584), collection action may be suspended pending agency action on a waiver/review request based upon appropriate consideration, on a case-by-case basis, as to whether:

(1) There is a reasonable possibility that waiver will be granted, or that the debt (in whole or in part) will be found not owing from the debtor;

(2) The Government’s interests would be protected, if suspension were granted, by reasonable assurance that the debt could be recovered if the debtor does not prevail; and

(3) Collection of the debt will cause undue hardship.

(c) If the applicable statutes and regulations would not authorize refund by the agency to the debtor of amounts collected prior to agency consideration of the debtor’s waiver/review request in the event the agency acts favorably on it, collection action should ordinarily be suspended, without regard to the factors specified in paragraph (b) of this section, unless it appears clear, based on the request and the surrounding circumstances, that the request is frivolous and was made primarily to delay collection.