34 C.F.R. § 304.31
Requirements for obtaining an exception or deferral to performance or repayment under an agreement
(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) Is unable to continue the course of study in § 304.30 or perform the service obligation because of a permanent disability; or
(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) Is engaging in a full-time course of study at an institution of higher education;
(2) Is serving on active duty as a member of the armed services of the United States;
(3) Is serving as a volunteer under the Peace Corps Act; or
(4) Is serving as a full-time volunteer under title I of the Domestic Volunteer Service Act of 1973.