399 Code – What is it?
Beginning with the 2017-2018, the Department of Education has mandated that the tax information reported on each student’s FAFSA be of the “prior-prior” tax year. In the case of the 2017-2018 tax year, this would mean that the “prior-prior” tax year would be 2015. With us previously verifying prior tax year information, that means that the 2016-2017 and 2017-2018 award years will both be working off the same tax year – 2015. Which brings us to the new C-Code, 399. This C-Code will address any student that has significant discrepancies reported for their taxes between the award years, since there should (in theory) be no discrepancy if the same tax year information was reported on both FAFSAs.
399 Code Exceptions
In some cases, however, tax information will vary, despite the same tax year being used. The Department of Education has determined that any student who has a change in their dependency status or marital status (student or parent) from award year to award year will not receive the 399 code on their ISIR. Other scenarios for exemptions include students who are not expected to be Pell Grant eligible for the 2017-2018 award year, students for whom no ISIR was received in the 2016-2017 award year, students who have not and will not receive Title IV aid in the 2016-2017 award year, and students who had a Professional Judgement performed in either the 2016-2017 or 2017-2018 award year.
399 Code – How is it Resolved?
For any other student that does not fit in to the above exceptions, there may still be an opportunity for exemptions. If a student and or parent used the Data Retrieval Tool in one of the two award years, that information is considered to be accurate and can be used to correct the award year that did not use the DRT tool. Separately, if a student is selected for Verification in one of the two award years and all of their tax information was verified, that information may be used to correct the award year that was not verified. In these two scenarios, students will receive the code on their ISIR, but will not require any resolution since a correction can be done to resolve the discrepancy.
For students who do not meet the Department of Education exemptions, did not use the DRT tool in either year, and did not have tax information verified in either year, resolution will be required. Depending upon the marital status, tax filing status, and dependency status, the student and or parent will be required to submit the appropriate tax information based on what was reported on the FAFSA. Once received and properly verified, this information will be used to correct the information on the ISIR for both award years.
Making corrections to a completed file may result in the aid that was previously awarded and disbursed to be adjusted.
399 Code – Unable to Resolve
For students who are unable to resolve their tax discrepancy regarding the 399 code, that student is considered to be ineligible for Title IV aid in both 2016-2017 and 2017-2018. If aid has already been awarded for an award year, that disbursed aid will be treated as an overaward. If there is any pending aid for that student, it cannot be disbursed. The deadline for students to submit corrections for 2016-2017 is September 9, 2017. If the appropriate information is not submitted by this deadline, then the student is ineligible for 2016-2017 aid, but may still be eligible for 2017-2018 aid upon the submission of the requested information.
Dear Colleague Letter (GEN-16-14) August 3, 2016
NASFAA PPY Webinar Series: Understanding the Treatment of Conflicting Information