The Federal Financial Aid Administration (FFA) has revised its guidelines for how much the federal government can offer student loan forgiveness to low-income borrowers.

The agency is considering a recommendation that it will allow borrowers who are not eligible for a federal loan forgiveness program to refinance their loans at a lower rate to avoid a potential debt discharge penalty.

“It is important that low- and moderate-income students not suffer an additional burden if they are eligible for forgiveness, said FFA Commissioner John J. Sullivan.

Students who have borrowed less than $25,000 and owe less than 5% of their discretionary income must be eligible for repayment assistance if their income falls below 120% of the federal poverty line.

They must also be able to repay their student loans within 60 days of the date they receive the loan forgiveness, and they must be able file a petition within three years of repayment.

In addition, borrowers who have made payments on their loans for five years or more must be forgiven if their loan balances exceed $1,000.

If borrowers do not meet the income requirements, the federal financial aid agency will impose a loan discharge penalty that could add up to up to $3,000 for the student, depending on the borrower’s income.

The FFA is currently reviewing the guidance, which was published in the Federal Register this week.

But FFA said it is open to considering the revised guidelines when it releases its annual financial aid report in the fall.

The federal government, which receives roughly $9.5 billion in federal student loan aid each year, said in its updated guidance that borrowers who owe less on their federal loans will not be eligible to receive assistance from the FFA for the first three years.

For example, if a borrower owes $25 on a federal student loans, the borrower would be eligible only for the portion of the forgiveness program that covers repayment assistance for three years, instead of the entire program.

The new guidelines will allow students who are eligible, but have not applied for a Federal Direct Loan to refortify at a higher rate.

The government’s revised guidance comes amid a growing movement by some borrowers to refit their federal student debt to pay down student loans at lower interest rates.

The Federal Reserve Board announced this week that it is exploring a program to provide loans that could refinance at lower rates for borrowers who qualify for the forgiveness.