What form is the"premature" distribution on?
Is it a tax deferred account? What kind of account?
If you click the yellow ? on the toolbar when your cursor is on each of the lines of the 5329 where you choose the exception, it should give you more information.
You can avoid the penalty for early withdrawal for education from an IRA but not from a pension. However you can have a loan from a pension to avoid tax and penalties.
Code 1 on which form, and what else is selected or checkmarked on that form?