ISIR CORRECTIONS DUE TO TRANSFER OF INCORRECT TAX YEAR DATA FROM IRS

According to a recent announcement from Federal Student Aid (FSA), some FAFSA applicants who attempted to file a correction to their 2018-2019 FAFSA received 2017 tax year data instead of the correct 2016 tax year data. It appears that this glitch affected only a small number of applicants, particularly those who made a correction to their 2018-2019 FAFSA between September 30, 2018, and October 4, 2018, and used the IRS Data Retrieval Tool to transfer their tax information from the IRS to the FAFSA. FSA identified the issue and resolved the problem with the IRS Data Retrieval Tool on October 4th, 2018, so it shouldn’t happen again.

2018-2019 ISIR CORRECTIONS MADE DUE TO TRANSFER OF INCORRECT TAX YEAR DATA FROM IRS

On October 26, 2018, the Central Processing System reprocessed the ISIRs of affected applicants and voided the bad transactions – but they did NOT correct the tax information so ISIR corrections still need to be made. Instead, emails are being sent to affected applicants alerting them to the problem and informing them to go online and make another ISIR correction by transferring the correct 2016 IRS tax information to the FAFSA using the DRT. This issue reportedly impacted a very small number of applicants, but it is important to note that the reprocessed transactions are intended solely to alert impacted applicants and institutions that action is required; the CPS reprocessing did not modify the financial information transferred from the IRS.

Several methods exist for schools to identify records resulting from the October 26 reprocessing:
Reprocessed Institutional Student Information Records (ISIRs) will be sent under the IGSG19OP message class.
SARs and ISIRs will include SAR comment code 172, which states “This SAR was produced because we processed a change to your information based on information reported to us by another agency or because of a processing system change. Review your SAR to see what effect, if any, this change has had on your application, and call 1-800-4-FED-AID (1-800-433-3243) if you have any questions.”

ISIRs produced because of the reprocessing will include a value of “04” for the Reprocessed Reason Code (ISIR field #248).

The FAA Information page in Student Inquiry on the FAA Access to CPS Online Web site will display “04 – Reprocessed for wrong tax year transferred from IRS DRT” for the Reprocessing Code for the transaction resulting from the reprocessing. The Reprocessing Reason Code 04 description will not display in FAA Access to CPS Online until after FSA implements updates to the site in a future release.

2018-2019 ISIR CORRECTIONS DUE TO TRANSFER OF INCORRECT TAX YEAR DATA

According to a recent announcement from Federal Student Aid (FSA), some FAFSA applicants who attempted to file a correction to their 2018-2019 FAFSA received 2017 tax year data instead of the correct 2016 tax year data. It appears that this glitch affected only a small number of applicants, particularly those who made a correction to their 2018-2019 FAFSA between September 30, 2018 and October 4, 2018 and used the IRS Data Retrieval Tool to transfer their tax information from the IRS to the FAFSA.  FSA identified the issue and resolved the problem with the IRS Data Retrieval Tool on October 4th, 2018, so it shouldn’t happen again.

On October 26, 2018 the Central Processing System reprocessed the ISIRs of affected applicants and voided the bad transactions – but they did NOT correct the tax information so ISIR corrections still need to be made. Instead, emails are being sent to affected applicants alerting them to the problem and informing them to go on line and make another ISIR correction by transferring the correct 2016 IRS tax information to the FAFSA using the DRT. This issue reportedly impacted a very small number of applicants, but it is important to note that the reprocessed transactions are intended solely to alert impacted applicants and institutions that action is required; the CPS reprocessing did not modify the financial information transferred from the IRS.

Several methods exist for schools to identify records resulting from the October 26 reprocessing:

Reprocessed Institutional Student Information Records (ISIRs) will be sent under the IGSG19OP message class.

SARs and ISIRs will include SAR comment code 172, which states “This SAR was produced because we processed a change to your information based on information reported to us by another agency or because of a processing system change. Review your SAR to see what effect, if any, this change has had on your application, and call 1-800-4-FED-AID (1-800-433-3243) if you have any questions.”

ISIRs produced because of the reprocessing will include a value of “04” for the Reprocessed Reason Code (ISIR field #248).

The FAA Information page in Student Inquiry on the FAA Access to CPS Online Web site will display “04 – Reprocessed for wrong tax year transferred from IRS DRT” for the Reprocessing Code for the transaction resulting from the reprocessing. The Reprocessing Reason Code 04 description will not display in FAA Access to CPS Online until after FSA implements updates to the site in a future release.

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RESOLVING CONFLICTING INFORMATION FOR CODE 399

Although the 2016-2017 and 2017-2018 FAFSAs should be completed using the same 2015 income and tax information, there is the possibility that there might be conflicting information between the two FAFSAs. To help administrators identify applications with potential conflicting information, beginning with the 2017-2018 award year, ISIRS will contain a comment code of 399 indicating conflicting information of prior-prior year data.

Federal Student Aid recently announced that they will continue to monitor the 2016-2017 and 2017-2018 FAFSA applications for conflicting information between the two years. Schools are required to resolve 399 codes in accordance with the guidance in GEN 16-14

Through September 9, the last day to make ISIR corrections for the 2016-2017 FAFSA cycle. After September 9, and for the remainder the of the 17-18 cycle, CPS will continue to push 399 C-codes when information conflicts between the two award years, but schools aren’t required to make any changes to 2016-2017 FAFSA or award data after September 9, 2017. Instead to resolve conflicting information, schools must review both years and if the conflict is caused by incorrect 16-17 year data, the school should document that the correction deadline has passed in student files and make sure that 17-18 data is correct before awarding or disbursing. For more information, check out FSA’s recent guidance in this electronic announcement.

COMMENT CODE 399 CHANGES

Resolving comment code 399 situations with students has placed an additional burden on FAAs. Two key changes to CPS were implemented last month to increase the accuracy of the assignment of comment code 399 and reduce the number of students receiving comment code 399.

For students with an automatic-zero EFC for 2017-2018, the CPS will now compare financial information provided for 2017-2018 to the student’s 2016-2017 financial information; SAR comment code 399 will only be assigned to the transaction if the EFC difference calculated by the CPS is over a certain threshold.

For student records with a professional judgment on the 2016-2017 transaction a condition was added to exclude those records from the cross-year edits that set SAR comment code 399.

On February 6, 2017 the CPS reprocessed 2017-2018 student records with an auto zero EFC as well as 2016-2017 records with professional judgment indicators checked. As a result, comment code 399 will be added or removed as needed based on the new CPS logic. http://bit.ly/2lKGWsd

UNUSUAL ENROLLMENT HISTORY FLAGS FOR 2017-2018 ISIRS

Federal Student Aid recently provided information about the Unusual Enrollment History Selection for the 2017-2018 award year. Any financial aid advisor will tell you that some students who have an unusual enrollment history have legitimate reasons for their enrollment at multiple institutions. However, such an enrollment history requires a review to determine whether there are valid reasons for the unusual enrollment history.

There is a flag in NSLDS for students whose pattern of enrollment and / or award history for either Pell or Direct Loans (other than a Direct Consolidation Loan or Parent PLUS Loan) is identified as unusual. The CPS will flag the Unusual Enrollment History field (UEH) on the student’s SAR/ISIR indicating whether the FAFSA applicant has an unusual enrollment history with regard to the receipt of Title IV student aid. The specific unusual enrollment pattern is one where the student may have attended an institution long enough to receive a Title IV credit balance, leaves without completing the enrollment period, enrolls at another institution, and repeats the pattern of remaining enrolled just long enough to collect another Title IV credit balance. The award years that are monitored for unusual enrollment are the four award years preceding the current FAFSA award year. For the 2017-2018 award year, the UEH Flag will consider enrollment history for award years 2013-2014, 2014-2015, 2015-2016, and 2016-2017. http://bit.ly/2jvnta4

RESOLVING CONFLICTING INFORMATION UNDER COMMENT CODE 399

Resolving C Code 399 Training

When an applicant submits a 2017-2018 FAFSA application the Central processing System will perform a comparison between prior 2016-2017 ISIR transactions and the 2017-2018 ISIR. If there is conflicting income or tax information between the two ISIRS, that would, once resolved, produce a significant change in the student’s expected family contribution and resultant Pell Grant eligibility, the student’s 2017-2018 SAR and ISIR will be flagged with a ‘C’ code and a special new Comment Code 399 informing the institution that it must resolve the possible conflicting information.

The Department recently updated the Early FAFSA FAQ with additional information for institutions about resolving conflicting information related to comment code 399 on 2017-2018 ISIRs.

Q – Will a new 2017-2018 ISIR transaction with comment code 399 be generated if the only reason for the transaction is to indicate comment code 399? For example, if a 2017-2018 FAFSA is filed before the student’s 2016-2017 FAFSA, will a new 2017-2018 ISIR be generated to flag the student’s 2017-2018 ISIR with comment code 399 if the comparison between the two years results in conflicting information?

A – Comment code 399 will only appear on a 2017-2018 ISIR if there was conflicting information between the student’s 2016-2017 and 2017-2018 records when any 2017-2018 ISIR was processed. For example, if a 2017-2018 ISIR is processed before the student’s 2016-2017 FAFSA was submitted there cannot be a 399 code on the 2017-2018 ISIR since there would be no conflicting information. If the student then submits a 2016-2017 FAFSA no comparison with the previously processed 2017-2018 ISIR transaction will be made, thus no new 2017-2018 ISIR will be generated. However, if a subsequent 2017-2018 ISIR is generated for any reason (e.g. corrections, NSLDS post-screening) after the 2016-2017 FAFSA was processed, a comparison will be done and if conflicting information is identified, the new 2017-2018 ISIR will include the 399 code.

Q – When the resolution of conflicting information related to Comment Code 399 determines that a student is no longer eligible for all or some of the subsidized aid that had been awarded, what action must the institution take regarding the subsidized aid that was disbursed?

A – As discussed in Dear Colleague Letter GEN-16-14, if the resolution of Comment Code 399 results in an overaward, the institution may adjust any subsequent disbursements in the same award year to eliminate the overaward. For example, a student is eligible for $4,000 in Pell Grant funds for the 2016-2017 award year. The institution disburses $2,000 for the Fall 2016 semester with the remaining $2,000 scheduled to be disbursed for the Spring 2017. However, after resolving Comment Code 399, the institution determines that the student is only eligible for $3,500 in Pell Grant funds for the entire 2016-2017 award year. The institution must reduce the Spring 2017 disbursement from $2,000 to $1,500. Of course, if the student does not return for the Spring 2017 term, the overaward becomes an overpayment that must be returned.

If an institution determines that a student’s overaward cannot be totally eliminated by adjusting subsequent disbursements, any remaining portion of the overaward attributed to a Title IV grant or Perkins Loan must be returned.

Q – What is a reasonable amount of time that institutions should allow students to submit documentation to resolve Comment Code 399?

A – When determining a deadline for submitting documentation to resolve a Comment Code 399, institutions should use the same guidance provided in the verification provisions of the April 4, 2016 Federal Register Notice.

You can read the Early FAFSA FAQ here: http://bit.ly/2hKBcgW


Does your staff need training on resolving C-Code 399? Contact us today to discuss your training needs.

Info@ed-executives.com | 203-836-4806

PAPER SECONDARY CONFIRMATION AND G-845 VERIFICATION NUMBER

Paper Secondary Confirmation is initiated when a student’s ISIR does not pass automated secondary confirmation or when the school has conflicting information about a student’s eligible noncitizen status. Paper secondary confirmation is accomplished by completing the G-845 form and sending supporting documentation to the United States Citizen and Immigration Services for review by their case teams.

The G-845 form is completed by the Financial Aid Office and sent to the Department of Homeland Security/ USCIS along with a student’s eligible noncitizen documentation to support a claim of being an eligible noncitizen for Title IV purposes, after primary and secondary verification when a non-citizen student’s eligible status is not confirmed during the match with the Department of Homeland Security.

When an ISIR is processed for an eligible noncitizen, a verification number is created (similar to a case number). If the USCIS does not receive a G-845 form within 60 days of when the verification number was created, they automatically close the case.

If you need to send in a G-845 form after 60 days has elapsed, a new verification number must be created. According to the USCIS, you can create a new verification number on the ISIR by submitting a correction to the ISIR. They suggest making a simple correction on the ISIR to generate a new one. Just be sure not to change anything important.  Once the correction is submitted, a new verification number should be created on the resulting ISIR, which can then be used to submit the G-845.

SAR Comment 399 Issue Resolved

SAR comment code 399 and the SAR C flag are assigned to a record by CPS when the student or parent reports a different 2015 income amount on the 2017-2018 Free Application for Federal Student Aid than the 2016-2017 FAFSA. With the implementation of prior-prior year financial reporting for the 2017-2018 processing cycle, applicants and parents of dependent applicants should be reporting the same 2015 income for 2017-2018 as they did for 2016-2017. In early October, schools reported they were receiving SAR comment code 399 on 2017-2018 records with no discernable difference in the 2015 income reported for 2016-2017 versus 2017-2018. CPS identified a system issue causing the incorrect assignment of SAR comment code 399, and has updated CPS to resolve the issue on October 16, 2016. ISIRS and SARS were reprocessed on October 17, 2016 to fix 2017-2018 student records that were assigned comment 399 incorrectly.

Several methods exist for schools to identify records resulting from the October 17 reprocessing:

  • Reprocessed Institutional Student Information Records (ISIRs) were sent under the IGSG18OP message class.
  • SARs and ISIRs will include SAR comment code 172, which states “This SAR was produced because we processed a change to your information based on information reported to us by another agency or as a result of a processing system change. Review your SAR to see what effect, if any, this change has had on your application, and call 1-800-4-FED-AID (1-800-433-3243) if you have any questions.”
  • ISIRs produced as a result of the reprocessing include a value of “02” for the Reprocessed Reason Code (ISIR field #230).
  • After updates are implemented in February 2017, the FAA Information page in Student Inquiry on the FAA Access to CPS Online Web site will display “02 – Reprocessed because Comment Code 399 not assigned correctly” for the Reprocessing Code on the transaction resulting from the reprocessing.

If the ISIR transaction resulting from the October 17 reprocessing no longer includes Comment Code 399 the institution is not required to take any action to resolve the Comment Code 399 that was included in the earlier ISIR transaction. Of course, any subsequent ISIR that includes Comment Code 399 must be resolved using the guidance provided in Dear Colleague Letter GEN-16-14.

Special Note for Graduate Students: The calculation used by the CPS to set Comment Code 399 does not automatically exclude FAFSA applicants simply because they reported on their FAFSA that they would be a graduate student since we know that in some cases that self-reported grade level is in error. That said, an institution is not required to resolve the reported Comment Code 399 if:

  • The institution determines that the student was, or will be, a graduate student for all of 2016-2017 and will continue to be a graduate student for all of 2017-2018; and
  • The student did not, and will not, receive Federal Work-Study for either the 2016-2017 or 2017-2018 award years.

Note that this relief does not apply to a student who was or who will be an undergraduate student even if the student has already completed a bachelor’s degree program. This is because such a student, while not eligible for a Pell Grant or FSEOG funding, is eligible for other subsidized Title IV aid.

RESOLVING CONFLICTING INFORMATION UNDER PPY FOR EARLY FAFSA

As a follow up to Dear Colleague Letter GEN-16-14, FSA updated their Early FAFSA FAQ to clarify circumstances under which an institution must resolve the conflicting information from PPY info when a student’s 2017–2018 ISIR has Comment Code 399 (possible conflicting information). For example, if the institution receives the 2017–2018 ISIR with Comment Code 399, and the student is no longer enrolled and is not expected to re-enroll for 2016–2017 or enroll for 2017–2018, the institution is not required to resolve the possible conflicting information. However, if the student subsequently enrolls, or re-enrolls, for any period associated with either the 2016–2017 or 2017–2018 award years, the institution must resolve the conflicting information.

If the new Comment Code 399 is not included on the student’s 2017–2018 ISIR, the institution is not required to determine if there are any differences in income or tax information between the two ISIRs. Institutions must still resolve conflicting information if the student’s ISIR was flagged with Comment Code 399, but the ISIR was not selected for verification because the resolution of conflicting information is a separate process from verification.

Institutions Can use the documentation collected to verify income and tax information on the 2016–2017 FAFSA to resolve conflicting information or complete verification of the 2017–2018 FAFSA if for either year, the institution had verified the conflicting information item(s) or the student or parent had transferred information into the FAFSA using the IRS DRT and had not changed any of the transferred information. Since the institution can assume that the verified or IRS DRT transferred values are correct it must, therefore, submit corrections to the other year’s ISIR values.

As is the case for a student who has been selected for verification, the institution must resolve any possible conflicting information and submit any required ISIR changes to the CPS before it makes a professional judgment determination.

The “Resolving Possible Conflicting Information and Submitting Corrections” section of Dear Colleague Letter GEN-16-14 instructs institutions to compare information from “both years” ISIRs to determine which income or tax item or items are in conflict.” Which 2016–2017 ISIR should be used for this comparison in cases where the institution received more than one 2016–2017 ISIR?

In cases where an institution has received more than one 2016–2017 ISIR for a student, the required comparison must be between the 2017–2018 ISIR with Comment Code 399 and the 2016–2017 ISIR that was, or will be, used as the basis for awarding and disbursing Title IV aid. Check out the updated FAQ here: http://bit.ly/1SJlP4V

 

IDENTIFICATION AND RESOLUTION OF CONFLICTING INFORMATION UNDER PPY FAFSA

Although the 2016-2017 and 2017-2018 FAFSAs should be completed using the same 2015 income and tax information, there is the possibility that there might be conflicting information between the two FAFSAs. The most effective way to prevent conflicting information from occurring is for financial aid administrators to urge FAFSA applicants and their parents to use the IRS Data Retrieval Tool. To help administrators identify applications with potential conflicting information, beginning with the 2017-2018 award year, ISIRS will contain a comment code of 399 indicating conflicting information of prior-prior year data. Take a look at GEN 16-14 for more information about resolving conflicting information on the 2017-2018 Early FAFSA. http://bit.ly/2bH0G9i