34 C.F.R. § 81.35
Reduction of claims
The Secretary or an authorized Departmental official as appropriate may, after the issuance of a disallowance decision, reduce the amount of a claim established under this subpart by—
(a) Redetermining the claim on the basis of the proper application of the law, including the standards for the measure of recovery under § 81.31, to the facts;
(b) Compromising the claim under the Federal Claims Collection Standards in 4 CFR part 103; or
(c) Compromising the claim under § 81.36, if applicable.