Resolving 399 Codes: The September 9 Deadline Is Upon Us

By Joan Berkes, NASFAA Policy & Federal Relations Staff

Now that the Sept. 9, 2017 deadline for submitting ISIR corrections for the 2016-17 award year is here, what consequences of the 399 code are here as well?

Schools should have made reasonable efforts to obtain documentation within a reasonable timeframe, resolve the 399 code, and submit any necessary corrections to 2016-17 ISIRs by the September 9 deadline. As is always the case, schools should not have tried to circumvent any Title IV administrative requirements, for example by deliberately delaying the resolution process to run out the corrections deadline. However, reasonable efforts do recognize the constraints of normal business practices. As a result, some requests for documentation will not have been made before the September 9 deadline, some will have been made before Sept. 9, 2017 but have deadlines for submission of documentation that fall after Sept. 9, 2017, and some will have been made in time to receive the documentation but not in time to assess and process corrections by Sept. 9, 2017.

NASFAA’s understanding of the most current ED guidance is as follows:

  • 399 codes that the institution first receives after Sept. 9, 2017: These flags affect the 2017-18 award year only. Schools do not take any action on a student’s 2016-17 aid in those cases, but must resolve the 399 code to ensure no errors would impact 2017-18 aid. That means the school should send out requests for documentation relative to the 2017-18 ISIR and give the student a reasonable deadline to comply; no 2017-18 aid should be disbursed once the 399 code is received until it is resolved. If the student never complies with the documentation request by the school’s deadline, only 2017-18 aid is forfeit.
  • 399 codes that the institution received shortly before Sept. 9, 2017: If (1) documentation is received within the deadline provided by the school to the student, but after Sept. 9, 2017, or (2) documentation is received before Sept. 9, 2017 but the school was unable to reasonably process the 2016-17 correction by Sept. 9, 2017, no corrections can be submitted for 2016-17 and no funds have to be returned for 2016-17.

Example #1: The school received a 399-flagged ISIR in late August, sent the request for documentation, and gave the student 45 days to comply. The school receives the requested documentation within the school’s 45-day deadline but after Sept. 9, 2017. No action for 2016-17 is required and the student’s 2016-17 aid stands.

Example #2: The school received a 399-flagged ISIR in early August, sent the request for documentation within a week, and gave the student 45 days to comply. The school receives the requested documentation on Sept. 9, 2017 (within the school’s 45-day deadline), but under the school’s normal business practices it takes 3 business days to make corrections. No action for 2016-17 is required and the student’s 2016-17 aid stands.

Example #3: The school receives a 2017-18 ISIR with the 399 code on 9/3/17. If it normally takes the school a week to draw down the ISIR, examine it, and send out requests for documentation, this student’s 2016-17 aid won’t be affected because the school could not reasonably get the request out by Sept. 9, 2017 within the school’s normal business practices.

In all three examples, the school must still resolve any differences in data for 2017-18. In all cases, the school should determine what are reasonable deadlines and reasonable business practices. NASFAA recommends that the school’s determination of “reasonable” with regard to 399 activity be documented in its policies and procedures.

If the student does not comply with the request for documentation by the school’s deadline, regardless of whether the deadline falls before or after Sept. 9, 2017, that student’s 2016-17 aid is forfeit and the student owes an overpayment.

If the student never submitted the documentation but the school did not give the student a deadline for submission of documentation to resolve the 399 code, the student still loses 2016-17 aid after Sept. 9, 2017 since the school is unable to resolve the conflicting information. The school should consider what would be reasonable action to take in those cases. For example, a school could opt to repay Title IV aid on the student’s behalf so that the student owes an institutional debt rather than a federal debt, thus preserving the student’s Title IV eligibility for 2017-18. If the school followed up with the student several times in different formats to prompt action and still got no response, it might decide to leave repayment of the 2016-17 aid as the student’s responsibility. There is no formal guidance in this case, but the school should still make an effort to determine reasonable treatment within its ability.

For additional guidance and information on withdrawn students or those no longer enrolled and conflicting information, please see the FAFSA and DRT FAQ question 12 and GEN-16-14: 2017-2018 Early FAFSA - Identification and Resolution of Conflicting Information.

 

Publication Date: 9/8/2017


Carrie S | 9/8/2017 10:18:32 AM

Agreed Thomas P. I just wish we had this information a few weeks ago.

Carrie B | 9/8/2017 9:58:34 AM

Thank you for this article.

I am wondering about the following paragraph: If the student does not comply with the request for documentation by the school’s deadline, regardless of whether the deadline falls before or after Sept. 9, 2017, that student’s 2016-17 aid is forfeit and the student owes an overpayment.

My question: If I understand the paragraph re: 399s posted shortly before 9/9/17 and resolution cannot reasonably be completed by 9/9/17, only 2017-18 aid is impacted. Will you please clarify that point? Thanks.

Thomas P | 9/8/2017 9:6:35 AM

Joan,
That was the most thorough explanation of the post September 9th 399 situation.
Thanks.

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