RECORD OF PROCEEDINGS
         AIR FORCE BOARD FOR CORRECTION OF MILITARY RECORDS

IN THE MATTER OF:      DOCKET NUMBER:  BC-2002-01710
            INDEX NUMBER:  128.10
      XXXXXXXXXXXXX    COUNSEL:  J. Bruce Harper

      XXX-XX-XXXX      HEARING DESIRED:  Yes

_________________________________________________________________

APPLICANT REQUESTS THAT:

The recoupment of funds expended for her education through the  Armed
Forces Health Professions Scholarship Program (AFHPSP) be  terminated
and that her tax refunds  taken  for  payment  toward  this  debt  be
refunded.

_________________________________________________________________

APPLICANT CONTENDS THAT:

Applicant’s  legal  counsel  submits  a  four-page  brief,  a  letter
prepared  by  the  applicant,  and  seven  exhibits  in  support   of
applicant’s appeal.  He states that several issues are significant in
the  applicant’s  case.   After  the  applicant  filed  her  annually
required statement of medical condition in June 1994 stating that she
had been diagnosed with  diabetes  mellitus,  she  was  found  to  be
medically disqualified for  military  duty  without  any  hearing  or
opportunity to discuss her medical condition in person.

She would have requested a hearing or personal  interview  to  defend
her position that she could perform well as an Ear, Nose, and  Throat
(ENT) specialist in  the  Air  Force  if  she  had  been  given  that
opportunity.  She currently maintains a full time  civilian  surgical
practice.  The  applicant  did  submit  a  letter  from  a  physician
confirming that the onset of her diabetes in Mar 94 was a  very  mild
case that was well controlled with an excellent prognosis.  There was
no indication in the notification letter or in  the  disqualification
determination that the letter  from  the  applicant’s  physician  was
considered.

The Notice of Proposed Discharge, dated 28 Sep 94,  and  received  by
the applicant on 24 Nov 94, did not mention  possible  recoupment  of
HPSP funds.  During an inquiry conducted  in  Jan  96,  the  Deferred
Physician Program Manager advised  the  applicant  of  her  impending
discharge and stated that she would have no further obligation to the
Air Force.  When contacted later by the Inquiry  Officer,  he  stated
that he and the applicant never discussed recoupment  of  funds.   He
did not deny telling the applicant that she had no further obligation
to the Air Force.

The applicant was advised of certain rights  when  she  received  the
notice of proposed discharge in Nov 94.  The right to  a  hearing  on
the merits of the finding of medical disqualification was not one  of
the rights she was given.  The “right to  review”  provision  clearly
states that the administrative discharge board was  not  a  “physical
evaluation board nor is it a board of inquiry.”   It  further  states
that the board  is  not  qualified  or  authorized  to  make  medical
determinations.”  The function and duties of the board were  “limited
to making findings and recommendations concerning whether  a  medical
determination of disqualification has been made  by  the  appropriate
surgeon and is evidenced in the  manner  prescribed  by  AFR  160-43,
Medical Examinations and Medical  Standards.”   Disqualification  had
already been determined by the Air Force physician on 12 Jul 94.  The
Notice of Proposed Discharge gave her the option to transfer  to  the
Retired Reserve or tender her resignation.  She made neither election
and was involuntarily discharged, as provided in the  memorandum,  on
  21 Feb 95, having no  idea  that  her  discharge  would  result  in
claimed recoupment.   She  also  did  not  receive  notice  that  the
administrative discharge board was apparently convened on 17  Jan  95
to consider her discharge.  After her discharge she received a notice
dated 23 Feb 95 saying recoupment was not excused.  This was followed
one month later on 28 Mar 95 by notification of indebtedness claiming
$91,852.92 was owed and requiring payment of the total amount  by  28
Apr 95.  Interestingly,  that  notice  contained  a  summary  of  her
medical school expenses dated 20 Jul 94, which was eight  days  after
the determination of disqualification by the Air Force physician.

The applicant signed a HPSP contract on 2 Feb 88  that  contains  the
following provision at paragraph 6(b):

        “Should I become  unable  to  commence  the  period  of  ADSC
specified in the contract  because  of  physical  disqualification  I
agree to reimburse the United States in one lump sum for a total cost
of advanced education paid by the U.S. Government as specified in  10
USC 2005.”

10 USC 2005  entitled  Advanced  Education  Assistance:  active  duty
agreement; reimbursement requirements provides in paragraph (a)(3):

        “That if such a person, voluntarily or because of  misconduct
fails to  complete  the  period  of  active  duty  specified  in  the
agreement, such person will reimburse the United States in an  amount
that bears the same ratio to the total  cost  of  advanced  education
provided such person as the unserved portion of active duty bears  to
the total period of active duty such person agreed to serve.”

Counsel indicates that the  applicant  was  discharged  involuntarily
based on the previously determined medical disqualification  and  not
for misconduct.  He references a case  in  which  the  Federal  Court
denied recoupment of education costs  where  a  midshipman  had  been
discharged for failure  to  maintain  weight  standards.   The  Court
determined that his failure to maintain weight standards was “neither
voluntary” nor “misconduct” provided in the statute.  Counsel  states
that  obviously  the  applicant’s  contracted  diabetes  was  neither
voluntary nor misconduct.  Therefore, the determination  of  the  Air
Force to medically disqualify the applicant for her illness and  then
compel reimbursement for her educational expenses did not come within
the authorization of 10 USC 2005(a)(3).  Paragraph 6(b) of  the  HPSP
contract therefore included within the agreement a provision that was
not authorized and is  therefore  void  and  unenforceable.   Counsel
asserts that any reliance upon 10 USC  2005(a)(4)  that  permits  the
Secretary of the Air Force (SECAF) to include “such other  terms  and
conditions as the Secretary concerned may prescribe  to  protect  the
interests  of  the  United  States”  is  misplaced.   The   Secretary
certainly would not be authorized  to  include  a  provision  in  the
contract that provided for recoupment in cases where an  officer  was
involuntarily  discharged  for  medical  reasons  when  the   statute
otherwise provides that such discharge must be  on  the  basis  of  a
voluntary failure to complete active duty or because  of  misconduct.
Such a reliance on that provision would imply that the Secretary  was
authorized to create Federal Legislation.

It is further provided in 10 USC 2005 at paragraph (g)(2):

        “The Secretary of each military department shall ensure  that
a member of the armed forces who  may  be  subject  to  reimbursement
requirement under this section is advised of such requirement  before
(1) submitting a request for voluntary separation  or  (2)  making  a
decision on a course of  action  regarding  personal  involvement  in
administrative,  nonjudicial,  and  judicial  action  resulting  from
alleged misconduct.”

Counsel opines that if such notification is required in the case of a
request for voluntary separation or for  misconduct,  it  is  obvious
that the Secretary is obligated to ensure such a requirement  is  met
in the case of involuntary discharge  for  medical  disqualification.
Since the Air Force failed to give the applicant such required notice
and opportunity to  be  heard  both  on  the  issue  of  her  medical
disqualification or on the subsequently  ordered  recoupment  of  her
medical expenses, recoupment action should be terminated.

In the letter prepared by the applicant, dated 15 Apr 02, she  states
five reasons why she does not think that the funds  expended  on  her
education under the HPSP should be recouped:

        a.  Her Air Force  recruiter  assured  her  that  unless  she
refused to fulfill her active duty commitment, there was no way  that
she or her family would be asked to repay her scholarship monies.

        b.  The Air Force did not give her a hearing to  discuss  her
discharge.

        c.  The Air Force did not  inform  her  that  they  would  be
asking for recoupment of the scholarship money; furthermore, when she
asked  what  her   responsibilities   would   be,   the   Air   Force
representative who informed her of her discharge told her  she  would
just receive some papers.  None of the  papers  said  anything  about
recoupment except for those received six months after her discharge.

        d.  There is currently an ENT at  Wright  Patterson  AFB  who
developed diabetes during his training.

        e.  She was told by a retired Air Force ENT that  during  her
year of training the Air Force had too many people go into  ENT.   He
told her that the Air Force saw her diagnosis as  an  opportunity  to
get rid of one ENT, get their money back and not be  responsible  for
her health care as a diabetic.

Counsel and applicant’s complete submission, with attachments, is  at
Exhibit A.

_________________________________________________________________

STATEMENT OF FACTS:

The applicant signed a Health Professions Scholarship Contract on  22
Feb 88.  She was appointed a second lieutenant as a  Reserve  of  the
Air Force on 7 Jun 88 and began her participation in the HPSP  on  22
Aug 88 when she entered medical school.  The applicant  received  her
medical degree on 6 Jun 92 and was granted a five-year deferment from
commencing  active  duty  in  order  to  pursue   an   otolaryngology
residency.

On 25 Aug 94, the applicant  was  found  medically  disqualified  for
continued military service under AFR 160-43, paragraph 4-35C, because
she was diagnosed with Diabetes Mellitus Controlled with Insulin.

On 28 Sep 94, a “Notice of Proposed Discharge” letter was sent to the
applicant’s former address.  She did not receive the notice until Nov
94 after it was emailed.  The notice contained information  regarding
the applicant’s right to  consult  appointed  military  counsel,  her
right to an administrative discharge board, and her right  to  submit
conflicting  or  rebuttal  medical  evidence  to  such  board.    The
applicant did not pursue any of the rights.

On 17 Jan 95, a Physical Disqualification Board recommended that  the
applicant be discharged from the Air Force Reserves with an honorable
characterization.  She was discharged effective 21 Feb 95.

The applicant claims that she was not advised about recoupment  until
she received the 23 Feb 95 “Notification  of  Discharge.”   She  also
alleged that she never saw the  summary  of  expenses  for  her  HPSP
scholarship until 28 Mar 95.  On 6 Dec 95, HQ  ARPC/CC  appointed  an
Inquiry Officer (IO)  to  investigate  the  facts  and  circumstances
concerning  recoupment  of  education  assistance  provided  to   the
applicant under the HPSP.

The IO found that  the  Air  Force  expended  $91,852.92  in  medical
education costs on behalf of the applicant.  The  applicant  did  not
dispute the amount owed, but did dispute the appropriateness  of  her
discharge.  The IO concluded  that  the  Air  Force  is  entitled  to
recoupment from the applicant.

Additional information pertaining to this case is  contained  in  the
evaluation prepared by the appropriate office of the Air Force  found
at Exhibit C.

_________________________________________________________________

AIR FORCE EVALUATION:

AFPC/DPMAF2 recommends denial of the applicant’s request.   Applicant
acknowledged the Armed  Forces  Health  Professions  Scholarship  and
Financial Assistance Contract on 22 Feb 88.  Paragraph  6(b)  states,
“Should I become unable to commence the period of Active Duty Service
Commitment (ADSC) specified in  this  contract  because  of  physical
disqualification, I agree to reimburse the United States in one  lump
sum for  the  total  cost  of  advanced  education  paid  by  the  US
Government as specified in 10 USC 2005.

Additional information is provided in an attached memorandum prepared
by the Chief, Physical Education Branch,  AFPC/DPAME.   He  indicates
that applicant’s counsel states that the applicant was first notified
of her right to apply to the BCMR in Nov 01.   The  applicant’s  HPSP
contract clearly  identifies  in  item  13  the  BCMR  as  an  avenue
regarding disputes over the HPSP contract.   The  HPSP  contract  was
discussed at great length during the inquiry in  1996.   Counsel  and
the applicant were present during the inquiry.   Details  surrounding
recoupment were identified.

AFPC/DPAME states that items 1 through 4 of  the  applicant’s      15
Apr 02 letter were previously addressed.  The contract clearly states
that the applicant agreed to reimburse the Government in one lump sum
for the cost of education, if she were unable to commence the  period
of ADSC because of physical disqualification.  Applicant’s  assertion
that her recruiter assured her that she would only have to  repay  if
she refused to fulfill her commitment is unsubstantiated.   He  feels
that the medical  condition  of  the  Air  Force  ENT  the  applicant
references is not relevant  to  the  discussion  of  her  recoupment.
Applicant’s item 5 is a new assertion.  During the inquiry, she  gave
a statement under oath indicating that she felt  the  Air  Force  was
using her medical disqualification as a means to reduce its workforce
numbers.  Her statement in the 15 Apr 02 letter that  a  retired  Air
Force ENT saw her diagnosis as a way to get rid of one ENT, get their
money back, and not be responsible for her healthcare as  a  diabetic
is the first assertion that someone in the Air Force  felt  that  her
diagnosis was an opportunity to decrease the number of ENT physicians
in the Air Force.  She does not present any evidence to  substantiate
this assertion.

The complete evaluation, with attachments, is at Exhibit C.

_________________________________________________________________

APPLICANT'S REVIEW OF AIR FORCE EVALUATION:

Counsel responded to the Air Force evaluation.   He  states  that  as
indicated in their original application, paragraph 6(b) of  the  HPSP
contract  is  unenforceable  because   recoupment   for   involuntary
discharge for medical disability is not authorized by  10  USC  2005.
In support of that argument counsel  attached  a  copy  of  a  letter
signed by the  Undersecretary  of  the  Air  Force,  Antonio  Handler
Chayes, dated 16 Sep 79, to  the  President  of  the  Senate,  Walter
Mondale requesting authorization by the  Department  of  Defense  for
enactment of 10  USC  2005  to  authorize  an  agreement  in  writing
requiring reimbursement,  under  certain  specified  conditions,  for
costs of advanced education sponsored by the Armed  Forces.   Counsel
asserts that the language contained in the letter  clearly  indicates
that  it  was  not  the  intent  of  the   legislation   to   require
reimbursement for failure to serve on  active  duty  for  involuntary
reasons, including medical conditions.

AFPC/DPAME suggests that the reference in the applicant’s 15  Apr  02
letter to the medical condition of another ENT  serving  in  the  Air
Force who  has  diabetes  “is  not  relevant  to  the  discussion  of
recoupment.”  The applicant contends that it is relevant as it  shows
she was treated differently without explanation.  Counsel attaches  a
letter from this physician in support of applicant’s appeal.

The Air Force Regulation referred to as the basis of the  applicant’s
disqualification apparently  was  not  mandatory  but  discretionary.
Since the regulation has been replaced by AFI 48-123, counsel  states
that he  and  applicant  must  assume  that  the  current  Air  Force
instruction regarding medical disqualification for Air Force  Reserve
personnel is the same or substantially  similar.   It  is  undisputed
that the applicant was given no hearing or opportunity to  personally
present her position that she was able to perform her duties  despite
her diabetes and was fit for active duty service.  The  determination
that she was medically disqualified was made without an  examination.
It was apparently made by the Air Force physician without considering
any other information other than the  fact  that  she  had  developed
diabetes. Given that the applicant’s  physician  indicated  that  the
applicant’s diabetes was well controlled, it cannot be said that this
was a proper exercise of the Air Force physician’s authority.

Counsel’s complete response, with attachments, is at Exhibit E.

_________________________________________________________________

ADDITIONAL AIR FORCE EVALUATION:

The Board forwarded counsel and applicant a copy of a decision by the
Assistant Secretary (Manpower, Reserve  Affairs,  Installations,  and
Environment) in a similar case.  In  this  case,  the  applicant  was
similarly  medically  disqualified  and  required  to  reimburse  the
Government.  Although the AFBCMR voted to grant the applicant relief,
the Assistant Secretary determined that  the  applicant  had  entered
into a clear contract that provided  that,  in  the  eventuality  she
became disqualified, she would reimburse the Government for the  cost
of her medical education to that point.

The Assistant Secretary’s decision is at Exhibit F.

_________________________________________________________________

APPLICANT'S REVIEW OF AIR FORCE EVALUATION:

A copy of the Assistant Secretary’s decision  was  forwarded  to  the
applicant and counsel on 25 Jul 02 for review and comment  within  30
days.  Although the applicant’s response to  the  initial  Air  Force
evaluation was more than 30 days after the additional evaluation  was
forwarded,  there  is  no  specific  response   indicated   to   this
evaluation.

_________________________________________________________________

SECOND ADDITIONAL AIR FORCE EVALUATION:

Pursuant to the Board’s request, HQ USAF/JAG provided  an  evaluation
of the applicant’s  appeal.   They  recommend  that  the  applicant’s
request be denied.

Contractually, paragraphs 6(b) and 11 placed the applicant on  notice
that in the event she was  physically  disqualified,  voluntarily  or
involuntarily separated, or separated in  the  interest  of  national
security, reimbursement for her advanced education was required.  The
Notice of Proposed Discharge served on the applicant did  not  notify
her of the HPSP debt or the possibility of recoupment, but  none  was
required by statute or regulation.  Applicant also claims that during
a telephone  conversation  with  the  Air  Force  Deferred  Physician
Program Manager, on 24 Jul 94, that she was told of her discharge and
that  she  owed  no  further  obligation  to  the  Air  Force.   This
individual denied to the Inquiry Officer making  any  such  statement
and “recoupment does not fall under his area of responsibility.”  The
remaining issue is whether statutorily the United  States  is  barred
from recoupment under 10 USC 2005.

Applicant’s counsel contends recoupment  for  advanced  education  is
limited and  only  if  the  individual  “voluntarily  or  because  of
misconduct fails to complete the period of active duty  specified  in
the agreement.”  The underlying premise is simply incorrect.   Within
the four corners of the contract, it was clearly the intention of the
Air Force, and the understanding of both parties, that applicant  was
to reimburse the United States if she was physically disqualified  or
separated prior to serving  her  ADSC.   USC  2005(a)(4)  grants  the
Secretary the authority to prescribe other terms  and  conditions  as
the Secretary concerned may prescribe to protect the interests of the
United States.  Section (a)(4) was purposely designed to grant  SECAF
discretion because by their very nature, statutes cannot  predict  or
envision every possible factual permeation and application.

While it is true that the applicant’s disqualifying condition was not
a result of misconduct or voluntary action, it is also true that  the
condition arose through no fault of the government.  The issue is not
one of fault or blame.  Here the parties to the contract entered into
a clear document that provided  that  in  the  eventuality  that  the
applicant became  physically  disqualified  or  for  whatever  reason
separated prior to serving an ADSC, the applicant would reimburse the
government for the costs of her advanced education.  There is  strong
public policy to recoup education costs in  this  and  other  similar
cases.  The fact is the taxpayers have  given  applicant  substantial
monies for her education, from which she has, and  will  continue  to
benefit for years to come.  To permit the applicant to  benefit  from
this education for years to come, at no cost to her, would amount  to
her being unjustly enriched.

The complete evaluation is at Exhibit H.

_________________________________________________________________

APPLICANT'S REVIEW OF SECOND ADDITIONAL AIR FORCE EVALUATION:

Applicant’s counsel responded to  the  second  additional  Air  Force
evaluation from HQ USAF/JAG.

Counsel asserts that the evaluation from HQ USAF/JAG does not respond
to the issue raised in point I of his 23 Oct 02 letter regarding  the
intent and purpose of the legislation regarding reimbursement of HPSP
expenses as confirmed in the request submitted by the Under Secretary
of the Air Force.

No response having been submitted to this issue  by  HQ  SAF/JAG,  it
must be assumed that it is agreed that the intent of 10 USC  2005  is
to exclude reimbursement of the costs  of  advanced  education  as  a
result of disqualification for involuntary reasons  such  as  medical
conditions,  including  the  applicant’s   Diabetes   Mellitus.    HQ
USAF/JAG’s  suggestion  that  10  USC  2005(a)(4)  grants  SECAF  the
authority to prescribe “other  terms  and  conditions”  in  the  HPSP
contract including, apparently, the right to compel reimbursement for
involuntary disqualification is incorrect for two reasons:

        1.  10 USC 2005 was amended 5 Nov 90 to add  into  subsection
(a)(3) “or fails to fulfill any term or condition prescribed pursuant
to clause (4).”  Subsection (a)(3) is the only provision  of  10  USC
2005 that authorizes reimbursement of the cost of advanced education.
 Subsection (4) authorizes the Secretary concerned to include in  the
contract “other terms and conditions” but does not deal at  all  with
the subject of reimbursement.  If under subsection (4) the  Secretary
could require  reimbursement  for  disqualification  for  involuntary
reasons, this would render subsection (a)(3)  superfluous  and  would
negate the stated intent and purpose of the legislation as  expressed
in the letter of    16 Sep 79.

        2.  The amendment to 10 USC 2005 of 5 Nov 90 authorizing  the
Secretary to include in the contract reimbursement for “any  term  or
condition prescribed pursuant to clause (4)” was enacted two and one-
half years after the applicant entered into her contract  on  22  Feb
88.

Counsel asserts that it must therefore be concluded  that  the  SECAF
was without authority to include paragraph 6(b) in the HPSP  contract
that required reimbursement for involuntary physical disqualification
and that provision must be considered unenforceable.

HQ USAF/JAG does not comment on the 12 Oct 00 decision reached by the
Board in the similar case provided by the AFBCMR.  In that  case  the
Board concluded that the applicant should have been relieved from any
obligation for reimbursement of the cost of education  after  finding
that  the  applicant’s  medical  condition  was  not   voluntary   or
misconduct.

Applicant’s counsel asserts that HQ USAF/JAG’s reference to paragraph
11 of the HPSP contract is misplaced and that none of the  provisions
of paragraph 11 are relevant or applicable to the involuntary medical
disqualification of the applicant.   He  also  references  two  other
issues that he asserts HQ USAF/JAG failed to comment on.

Counsel’s complete response is at Exhibit J.

________________________________________________________________

THIRD ADDITIONAL AIR FORCE EVALUATION:

Pursuant to the Board’s request, HQ USAF/JAG provided  an  evaluation
to address the following contentions made by applicant’s counsel:

        a.  That it is not the intent of 10 USC 2005 as expressed  in
the legislative history to require reimbursement for failure to serve
on active duty for involuntary reasons, including medical conditions.
 What is the relevance of the letter from the Undersecretary  of  the
Air Force, Antonia Handler Chayes, dated 16  Sep  79,  which  clearly
states this condition.

        b.  That  the  amendment  to  10  USC  2005  authorizing  the
Secretary of the Air Force to include in the  contract  reimbursement
for “any term or condition prescribed pursuant  to  clause  (4)”  was
enacted more than two years after the applicant signed her contract.

        c.  The relevance of the court’s decision in United States v.
Charles C. Gears, where it denied an action by the United  States  to
recover costs of education at the Naval Academy.

HQ USAF/JAG indicates that “admittedly” Ms. Chayes’ letter does state
that the intent of the [then] legislative proposal was not to include
situations where an individual is discharged because  of  failure  to
meet physical standards.  However, there are other provisions in  the
letter that may help the  Board  in  its  deliberations,  which  they
provide specific examples of.   They conclude that the true import of
Ms. Chayes’ letter is the [then] proposed legislation was  to  insure
the United States, after considering the equities,  good  conscience,
and fairness to both parties, “received a fair return on the cost  of
education  received  by  the  person”  and  “a  fair  return  on  its
investment.”  When the Board considers Ms.  Chayes’  letter,  in  its
entirety,  the  presumptive  intent  of  10  USC  2005,  is  to  seek
reimbursement of the costs of  advanced  education  in  an  equitable
manner.

Additionally,  10  USC  2005(a)(4)  has  been  in  effect  since  the
legislation was enacted.  While Congress required certain  provisions
to  be  included  in  contracts  for  advanced  education,  from  its
inception the law also gave the  Service  Secretaries  discretion  to
include  any  other  provisions  deemed  necessary  to  protect   the
interests of the United  States.   The  SECAF  was,  therefore,  well
within his authority  to  require  the  applicant  to  sign  an  HPSP
contract providing for such.  On 22 Feb 88, the applicant  signed  an
HPSP contract and in paragraph 6(b), the applicant agreed that in the
event of physical disqualification, regardless of nature  or  origin,
to reimburse the United States, in one lump sum, the  total  cost  of
advanced education.  Paragraph 6(b), under which  recoupment  may  be
ordered, is a Section 2005(a)(4) provision.  The  1990  amendment  to
Section 2005(a)(3) to which applicant’s counsel alludes, affirmed the
existing  Air  Force  practice  of  including  such  a  paragraph  by
codifying the Secretary’s authority to include such other contractual
terms and conditions triggering reimbursement.   This  is  consistent
with the legislative mandate to protect the interests of  the  United
States and ensuring a fair return.

HQ USAF/JAG discusses  the  applicability  of  paragraph  11  of  the
applicant’s HPSP contract, which applicant’s  counsel  dismisses  any
reference to as “misplaced”  stating,  “none  of  the  provisions  of
paragraph 11 are relevant or applicable to  the  involuntary  medical
disqualification”   of   applicant.    Paragraph   11’s   involuntary
separation provision for  national  security  interests,  is  further
evidence of  the  Secretary’s  broad  discretionary  authority  under
Section 2005(a)(4) requiring HPSP  participants  to  agree  “to  such
terms and conditions as the  Secretary  concerned  may  prescribe  to
protect the interest of the United States.”

Contractually, both paragraphs 6(b) and 11 placed  the  applicant  on
notice that in the event she was determined  physically  disqualified
(para 6(b)) or involuntarily  separated  “because  retention  is  not
clearly consistent with the interest of national security (para  11),
reimbursement of the costs of her advanced education was required.

HQ USAF/JAG also discusses examples of instances where the  Secretary
might use his discretion to excuse repayment,  e.g.,  a  debilitating
injury that would preclude an individual from benefiting  from  their
education.   HQ  USAF/JAG  further  discusses  the  notification   of
discharge to the applicant, which included notice of  the  recoupment
action.  An inquiry was conducted into the  HPSP  recoupment  action,
which eventually resulted in the SECAF ordering recoupment  of  money
spent on the applicant’s advanced education.  The applicant has  been
afforded all procedural due process rights  and,  to  date,  all  Air
Force authorities have agreed  that  recoupment  is  appropriate  and
fair.

In regards to comparing the applicant’s case to that of a former  Air
Force physician who also suffered from insulin dependent diabetes but
was permitted to serve on active duty, HQ USAF/JAG indicates that the
distinction between the two cases is  easily  made.   The  Air  Force
physician had already served on active duty for  10  years  prior  to
developing diabetes and the processes are completely different.  That
aside, a comparison of the two cases is inappropriate and should  not
divert the Board’s analysis of whether the applicant is obligated  to
reimburse the United States for the cost of her education.  They also
caution  that  comparisons  to  other  BCMR  cases  exonerating   the
applicant’s  recoupment  is  similarly  inappropriate.   The  Board’s
decisions are case and fact specific.

HQ USAF/JAG discusses the relevance of the court’s decision in United
States v. Gears, a case in which the courts ruled that a midshipman’s
failure to  maintain  weight  standards  was  neither  voluntary  nor
misconduct.  They indicate  that  the  underlying  reason  the  court
rejected the government’s interpretation of “voluntary” was based  on
the  confusion  about  the  physical  standards  applicable  to   the
midshipman and the absence of evidence that he knew his weight  would
result in discharge.  In the applicant’s case, there is no  confusion
as to standards, as there was in Gears; and  consequently,  the  case
has no relevance to the applicant’s.

Finally, HQ USAF/JAG recommends that the applicant’s appeal be denied
as  untimely.   The  applicant  admits  disputing  the  Air   Force’s
recoupment action since 1994 and  also  admits  that  the  Air  Force
notified her of its final recoupment action on 23 Feb 99.

The complete evaluation is at Exhibit K.

_________________________________________________________________

APPLICANT”S REVIEW OF THIRD ADDITIONAL AIR FORCE EVALUATION:

Applicant’s counsel responded  to  the  third  additional  Air  Force
evaluation in a 7-page brief of counsel with two  exhibits.   Counsel
states that HQ USAF/JAG  failed  to  point  out  specific  situations
described  in  Undersecretary  Chayes’  letter  that  would  not   be
considered voluntary refusal to serve or misconduct:

        a.  Academic failure not deemed willful on the  part  of  the
individual.

        b.  Failure to meet physical standards.

        c.  Hardship.

Counsel asks several rhetorical questions.  If academic  failure  was
not intended to trigger reimbursement, how  could  diabetes  mellitus
contracted during residency after serving in the  Air  Force  Reserve
for six years?  If  failure  to  meet  physical  standards  does  not
include medical disqualification, what does it include?  If  hardship
can result in exclusion for reimbursement, an  illness  resulting  in
the Air Force’s determination of  medical  disqualification  must  be
considered a hardship.

Counsel   discusses   AF/JAG’s   assertion   that   the   intent   of
Undersecretary Chayes’  letter  was  to  entitle  the  government  to
recover the cost of education based on a concept of “fair  return  on
investment.”   AF/JAG  further  suggests  that   “equity   and   good
conscience and  fairness  to  both  parties”  should  be  considered.
Counsel opines that it cannot reasonably be concluded  that  anything
in Undersecretary Chayes’  letter  suggests  any  other  circumstance
authorizing reimbursement  than  failing  to  serve  on  active  duty
“voluntarily or because of misconduct.”  Counsel points  to  examples
of “voluntary or misconduct” given by Undersecretary Chayes.

Counsel states that it cannot be more clear that the legislation  was
enacted to enable  the  United  States  to  obtain  reimbursement  of
education costs  only  if  the  person  “voluntarily  or  because  of
misconduct” does not serve for the  specified  period.   Without  the
authority of law to include a provision  in  the  Health  Professions
Scholarship Contract (para 6(b)) that would result  in  a  claim  for
reimbursement as a result of  involuntary  illness  or  disease,  the
provision must be considered unenforceable.

Counsel refers the Board to the applicant’s earlier  statement  of  6
Jan 03 (Exhibit J) in reference to his argument  that  the  applicant
signed her contract more than  two  and  one-half  years  before  the
inclusion in 10 USC 2005(a)(3) of the reference  to  subsection  (4).
Subsection 4 of 10 USC 2005 could not be considered as  authority  to
include provisions such as 6(b) in the contract because:

        a.  It would completely negate the limitations on  the  right
to reimbursement provided in subsection (3) if  the  Secretary  could
include “any other reason  deemed  necessary”  including  involuntary
reasons such as illness or disability.  Such an interpretation  would
suggest that subsection (3) is to be ignored.   The  Secretary  could
include anything and everything he wanted in the contract to  trigger
a claim for reimbursement.

        b.  A more  reasoned  view  of  subsection  (4)  is  that  it
authorizes  “other  terms  and  conditions”  not  inconsistent   with
subsection  (3)  not   terms   and   conditions   that   ignore   the
congressionally  mandated  limitations  of  “voluntary”  actions   or
“misconduct.”   Subsection  (4)  does  not  include  any   provisions
regarding  reimbursement,  which  are  exclusively   set   forth   in
subsection (3).

The judge  in  the  Gears  case  said,  “The  only  statute  directly
addressing the matter of reimbursement is  10  USC  2005(a)(3).”   He
further stated that “Congress did not define voluntary or misconduct”
and found that failure to meet weight limitation standards of the  US
Naval Academy  was  neither  “voluntary  or  misconduct”  and  denied
reimbursement.   Counsel  opines,   “however   it   is   interpreted,
“voluntary” would not and could  not  be  applicable  to  contracting
diabetes mellitus, a  completely  involuntary  occurrence.”   Counsel
provides further comments on the court’s determination in the  Gears’
case and indicates that applying the court’s interpretation of 10 USC
2005 in Gears to the facts of the applicant’s case  would  result  in
denial of the claim for reimbursement.

HQ USAF/JAG suggests the 1990 amendment to Section 2005(a)(3) to  add
“or fails to fulfill any term or  condition  prescribed  pursuant  to
Clause (4),” affirmed the existing Air Force practice of including  a
paragraph such  as  6(b)  in  the  HPSP  contract  by  codifying  the
Secretary’s authority to include such  other  contractual  terms  and
conditions triggering  reimbursement.   The  authority  so  construed
could not include retroactive application to  a  contract  signed  in
February 1988.  To do so would violate  the  very  suggestion  by  HQ
USAF/JAG to “consider the equities, good conscience, and fairness  to
both parties.”

Counsel discusses why the case Favreau v. United States cited  by  HQ
USAF/JAG does not support the position of the Air Force in this case.
 That case involved a  class  action  brought  by  service  personnel
terminated for obesity or failure to meet physical fitness standards.
 The government argued that the question  of  whether  an  individual
failed to complete a term of  enlistment  “voluntarily”  depended  on
whether the conduct was “within the control of the  service  member.”
A key finding by the court relevant to the applicant’s case was  that
the service members did not have a medical problem preventing  weight
loss.  If they did, the conduct would not  be  “voluntary”  and  this
reimbursement would be denied, “if there  were  medical  reasons  for
failure.”

Counsel addresses several other points raised  by  HQ  USAF/JAG.   In
reference to paragraph 11 of the HPSP contract, counsel  states  that
the applicant was not disqualified for any reason under paragraph 11.
 Regarding speculation by HQ USAF/JAG that the Secretary would  grant
a waiver to someone that has “lost his or her sight  or  a  limb”  or
“incurred a debilitating  disease”  and  could  not  earn  a  “better
living” suggests that the Secretary  is  arbitrary  and  inconsistent
considering the applicant has diabetes mellitus and  did  not  get  a
waiver.   It  would  also  mean  that  she  should  not   have   been
disqualified in the first place and would be serving as an ENT in the
Air Force if it is assumed she can “work and earn a better living.”

Counsel  rebuts  HQ  USAF/JAG’s  assertion  that  the  applicant  was
afforded all procedural due process rights.  Counsel  indicates  that
this issue was thoroughly discussed in their initial submission.   He
again references the provision in 10 USC 2005(g)(2) that required the
applicant to be notified before she was discharged, not after as  she
was.

Finally, counsel discusses HQ USAF/JAG’s position that paragraph 6(b)
of  the  HPSP  contract  controls  regardless  of  the   reason   for
disqualification, the comparison of the applicant’s case  to  another
Air Force physician that developed diabetes, and  the  recommendation
to deny the applicant’s case as untimely.

Counsel provides a summary of the Gears case and  an  affidavit  from
the applicant giving her reasons why she believes the action taken by
the Air Force to disqualify  her  without  hearing  or  notice  of  a
reimbursement obligation was arbitrary, unfair and inequitable.

Counsel’s complete response, with attachments, is at Exhibit M.

_________________________________________________________________

THE BOARD CONCLUDES THAT:

1.  The applicant has exhausted all remedies provided by existing law
or regulations.

2.  The application was not timely  filed;  however,  it  is  in  the
interest of justice to excuse the failure to timely file.

3.  Sufficient relevant evidence has been  presented  to  demonstrate
the existence of error or injustice.  Although the applicant  clearly
signed the HPSP contract, which states, in essence, in paragraph  6b,
that should she become unable to commence the period  of  her  active
duty service commitment specified in the contract because of physical
disqualification,  she  agreed  to  reimburse   the   United   States
Government for the cost of her education, a  majority  of  the  Board
believes that this provision of the contract fails to comply with  10
USC 2005(a)(3), which limits reimbursement  to  instances  where  the
individual fails to fulfill their commitment due to voluntary actions
or  due  to  misconduct.   The  majority  does  not  find  that   the
applicant’s  disqualifying  illness  fits   either   of   these   two
categories.  The Board majority finds arguments made  by  applicant’s
counsel persuasive that paragraph 6b of the HPSP  contract  does  not
comply with the designed intent of Section 2005 as contained  in  the
legislative history.  As pointed out  by  applicant’s  counsel,  when
Section 2005 was proposed, it was indicated in the proposal  that  it
was not the intent of the legislation to include situations where  an
individual is discharged or their education is terminated because  of
academic failure not deemed willful on the part of the individual, or
failure to meet physical standards or hardship.  AF/JAG points out in
their  evaluation  that  10  USC  2005(a)(4)  grants  the  SECAF  the
authority to prescribe other terms and conditions  as  the  Secretary
deems necessary to protect the interests of the  United  States.   He
further opines that this subsection was purposely designed  to  grant
the SECAF discretion because by their  very  nature  statutes  cannot
predict  or  envision  every   possible   factual   permutation   and
application.  On the surface, this would appear reasonable;  however,
the majority of the Board notes again that the issue of  recovery  in
situations where an individual does not meet physical  standards  was
specifically addressed in  the  proposed  intent  as  stated  in  the
legislative history.  Although it appears that the HPSP contract  the
applicant signed made her aware that she would have to repay the cost
of her education if she could not meet her required ADSC,  the  Board
majority believes that enforcement of this provision would be counter
to the intent of  the  statute  as  implemented.   Additionally,  the
majority of the Board notes that the applicant  signed  her  contract
over two and one-half years before the amendment that paragraph  6(b)
is derived from.  Finally, the majority of the Board is not convinced
that the applicant received due process  by  being  notified  of  the
recoupment  action  prior  to  her  discharge  as  required  by   the
applicable statute.  Therefore, a majority of  the  Board  recommends
that the applicant’s records be corrected as indicated below.

_________________________________________________________________

THE BOARD RECOMMENDS THAT:

The pertinent military records of the Department  of  the  Air  Force
relating to APPLICANT, be corrected to show that at the time  of  her
discharge from the Air Force, the Secretary of the  Air  Force  found
that under the particular circumstances of her  case,  her  discharge
for physical disqualification was not within the meaning of Title 10,
United States Code, Section 2005, and that accordingly, no  debt  was
established to reimburse the United States for funds expended on  her
education under  the  Armed  Forces  Health  Professions  Scholarship
Program (AFHPSP).

_________________________________________________________________

The following members of the Board  considered  this  application  in
Executive Session on 4 February 2003 and 7  August  2003,  under  the
provisions of AFI 36-2603:

      Mr. Joseph G. Diamond, Panel Chair
      Mr. John B. Hennessey, Member
      Ms. Martha Maust, Member

By majority  vote,  the  Board  voted  to  correct  the  records,  as
recommended.  Mr. Hennessey voted to deny and has attached a minority
report  at  Exhibit  N.   The  following  documentary  evidence   was
considered:

    Exhibit A.  DD Form 149, dated 15 May 02, w/atchs.
    Exhibit B.  Applicant's Master Personnel Records.
    Exhibit C.  Memorandum, AFPC/DPMAF2, dated 3 Jul 02.
    Exhibit D.  Letter, SAF/MRBR, dated 9 Jul 02.
    Exhibit E.  Letter, Applicant’s Counsel, dated 23 Oct 02,
                w/attachments.
    Exhibit F.  Memorandum, SAF/MI, dated 12 Oct 00.
    Exhibit G.  Letter, AFBCMR, dated 25 Jul 02.
    Exhibit H.  Memorandum, HQ USAF/JAG, dated 3 Dec 02.
    Exhibit I.  Letter, AFBCMR, dated 6 Dec 02.
    Exhibit J.  Letter, Applicant’s Counsel, dated 6 Jan 03.
    Exhibit K.  Memorandum, HQ USAF/JAG, dated 19 Mar 03.
    Exhibit L.  Letter, AFBCMR, dated 24 Mar 03.
    Exhibit M.  Letter, Applicant’s Counsel, dated 10 Jun 03,
                w/attachments.
    Exhibit N.  Minority Report, dated 2 Sep 03.




                                   JOSEPH G. DIAMOND
                                   Panel Chair

MEMORANDUM FOR THE EXECUTIVE DIRECTOR, AIR FORCE BOARD
                                          FOR CORRECTION OF MILITARY
RECORDS (AFBCMR)

SUBJECT:  AFBCMR Application of XXXXXXXXXX, XXX-XX-XXXX


          In Executive Session on 4 February  and  7  August  2003,  we
considered the applicant’s requests for termination  of  recoupment  of
funds expended for  her  education  through  the  Armed  Forces  Health
Professions Scholarship Program and the return of her tax refunds  held
for payment toward this debt.  A majority of the Board voted  to  grant
the applicant relief.  I disagree with their recommendation.

          Applicant, through her counsel, has put forth several reasons
why she should not be required to reimburse the Government for the cost
of her education.  Among these are that her medical condition  was  not
severe enough to preclude her serving on  active  duty,  that  required
procedures were not followed in that she was not notified prior to  her
discharge that she would be required to repay her education costs, that
she was advised  by  Air  Force  officials  that  she  had  no  further
obligation to the Air Force after her discharge, and, finally, that the
contract that she signed does not comply with 10 USC 2005.

          After reviewing both the applicant’s position as well as  the
Air Force’s, I accept the Air Force’s position  as  put  forth  by  the
legal opinions prepared by HQ USAF/JAG.  I do not  find  any  error  or
injustice regarding the Air Force’s determination  that  the  applicant
was medically unfit to serve.  Applicant’s assertion that she  was  not
notified that the Air Force intended to seek recoupment in the  “Notice
of Proposed Discharge,” is without merit.  A fair  reading  of  10  USC
2005, in light of its legislative history, application in  prior  cases
and when read in tandem with the Health Professions Scholarship Program
contract, clearly put applicant on notice of an obligation to repay.  I
also find the applicant’s  assertion  that  she  relied  on  statements
allegedly made by representatives of the Air Force informing  her  that
she would  not  have  any  obligation  to  the  Air  Force  unless  she
voluntarily failed to enter active duty to be unreasonable.   The  oral
hearsay statements allegedly made  by  applicant’s  recruiter  and  the
Deferred  Physician  Program  manager  should  not  be   afforded   any
consideration, especially when  one  considers  the  specific  language
detailing  applicant’s  obligation  in  the  contract  she  voluntarily
entered into and memorialized by her signature.

          I do find the arguments put forth by applicant’s counsel that
the provision in the  HPSP  contract  requiring  repayment  of  medical
education costs  in  cases  of  physical  disqualification  to  not  be
specifically supported by law to have some weight.  The gravity of this
argument, however, disappears when it is balanced against  the  express
terms  of  the  contract,  which  put  applicant  on  notice   of   the
circumstances that might subject applicant to the possibility of having
to  repay  education  costs.   To  find  in  favor  of  the  applicant,
applicant’s counsel asks that we narrowly read 10 USC 2005 in  a  light
most favorable to the applicant  and,  at  the  same  time,  completely
ignore the existence of the HPSP contract.

          Although she is not able to fulfill her obligation to the Air
Force through no fault of her own, she continues to reap  the  benefits
of the education that the Air Force  has  provided.   In  view  of  the
foregoing,  I  believe  that  to   totally   absolve   her   from   all
responsibility in this case would be contrary to  established  law  and
constitute an injustice to the Air Force.



                             JOHN B. HENNESSEY
                                                   Panel Member