On June 9, 2026, Federal Student Aid (FSA) issued an electronic announcement providing important updates regarding Institutional Student Information Record (ISIR) reprocessing tied to Comment Code 352 and the FAFSA Processing System (FPS) C Flag. This update primarily affects how institutions interpret borrower eligibility for federal student loan limits under recent legislative changes.
The short version: if you have been seeing an FPS C Flag alongside Comment Code 352, you can disregard it. You do not need to delay awarding or disbursing aid because of it.
What Happened
In late May 2026, the U.S. Department of Education initiated a reprocessing effort for 2026–27 FAFSA records. This process generated new ISIRs that included a loan limit exception flag based on a borrower’s 2025–26 loan disbursement activity. The purpose of this flag was to indicate whether a borrower may qualify for pre-Working Families Tax Cuts Act (also referred to as the One Big Beautiful Bill Act) aggregate loan limits, including lifetime limits and eligibility for Direct PLUS Loans for parents.
During this reprocessing, ISIR field 585 was set to reflect borrower eligibility. This determination was based on data from the Common Origination and Disbursement (COD) system, transmitted through the National Student Loan Data System (NSLDS), and subsequently reflected in ISIRs with Reason Code 34, Comment Code 352, and an associated FPS C Flag.
Why It Caused Confusion
The inclusion of the FPS C Flag led to confusion among institutions. Typically, a C Flag indicates that an issue must be resolved before aid can be awarded or disbursed. In this case, the flag did not require resolution, which prompted concern within the financial aid community.
What the Department Clarified
In response, the Department of Education clarified that institutions may immediately disregard the FPS C Flag when it appears alongside Comment Code 352. Institutions are not required to delay awarding or disbursing financial aid solely due to the presence of this flag.
The Department also announced that it will begin reprocessing ISIRs on June 11, 2026 to remove the FPS C Flag tied to this scenario.
Moving forward, Comment Code 352 will continue to be used to inform institutions and borrowers of potential changes in eligibility for loan limits.
What to Do Now
- Disregard the FPS C Flag where it appears alongside Comment Code 352. Do not hold awarding or disbursement on that flag alone.
- Review borrower information in NSLDS to verify updated loan eligibility, including aggregate totals and any warning or informational indicators.
- Expect the FPS C Flag tied to this scenario to be removed in the reprocessing that begins June 11, 2026, while Comment Code 352 remains in use.
Federal Student Aid acknowledged the confusion caused by this issue and expressed appreciation for the financial aid community’s patience as system updates are implemented. Institutions with questions are encouraged to contact the FSA Partner and School Relations Center or use the resources available on the FSA Knowledge Center.
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