MEMORANDUM OF CONSIDERATION


         IN THE CASE OF:
        


         BOARD DATE: 8 April 2003
         DOCKET NUMBER: AR2002080970

         I certify that hereinafter is recorded the record of consideration of the Army Board for Correction of Military Records in the case of the above-named individual.

Mr. Carl W. S. Chun		Director
Ms. Joyce A. Wright		Analyst

The following members, a quorum, were present:

Mr. Raymond J. Wagner		Chairperson
Ms. Linda M. Barker		Member
Ms. Barbara J. Ellis		Member

         The Board, established pursuant to authority contained in 10 U.S.C. 1552, convened at the call of the Chairperson on the above date. In accordance with Army Regulation 15-185, the application and the available military records pertinent to the corrective action requested were reviewed to determine whether to authorize a formal hearing, recommend that the records be corrected without a formal hearing, or to deny the application without a formal hearing if it is determined that insufficient relevant evidence has been presented to demonstrate the existence of probable material error or injustice.

         The applicant requests correction of military records as stated in the application to the Board and as restated herein.

         The Board considered the following evidence:

         Exhibit A - Application for correction of military
records
         Exhibit B - Military Personnel Records (including
         advisory opinion, if any)

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APPLICANT REQUESTS: That he be reimbursed $448 of additional interest accrued on his student loans due to late payment by the Government.

APPLICANT STATES: That due to no fault of his own, no payment was made on his loans until he completed 37 months of honorable active duty service. According to the terms of his Department of Defense (DOD) Loan Repayment Program (LRP), payments were to begin after 12 months of service. His contract also stated that $1500, or 1/3 of the total loan amount (which ever is greater) was to be paid at 12 months, another payment in the same amount at 24 months and the remaining amount at 36 months of completed military service. His original student loan amount was $6,600 and his Government payment on his loan should have been $2,200 after completion of his first full year of active duty and for each full year thereafter, up to 3 years. He also states that he paid 2 years of additional interest on $2,200 that should have been paid in February 2000 and paid 1 year of additional interest in February 2001. He further states that he was stuck paying taxes on $6,600 of additional income in one year. He concludes by stating that, had his loan been paid on time according to his contract, his taxes would have been less. He is now requesting reimbursement for the additional taxes that he had to pay. In support of his application, he submits copies of his: DD Form 2475 (DOD Education Loan Repayment Program (LRP) Annual Application); two account statements and a letter from NELNET Loan Services, Incorporated; DD Form 3286-66 (Statement of Understanding/Army Policy); and an e-mail message from the college loan LRP.

EVIDENCE OF RECORD: The applicant's military records show he enlisted on 11 February 1999, as a counterintelligence agent in military occupational specialty (MOS) 97B for a period of 5 years. He continues to serve and is presently assigned to Fort Meade, Maryland.

The applicant’s DA Form 3286-66, item 1(a) shows that the applicant enlisted
for the LRP. Item 4(b) states "Enlistment for the LRP ensure me, provided I meet and maintain the prescribed prerequisites, that the portion or amount of loan that may be repaid is 33 1/3 percent or $1,500, whichever is greater, of the unpaid principal balance for each year of service completed."

The applicant provided two account statements, a DD Form 2475, and an e-mail message pertaining to his student loan. He also provided a letter from NELNET Loan Services, Incorporated which shows that the interest capitalization took place for the years 1999, 2000, and 2001.

In the processing of this case, an advisory opinion was provided by Total Army Personnel Command (PERSCOM), Education Incentives and Counseling Branch, dated which recommended disapproval of the applicant's request.

The opinion points out that under ideal circumstances, the portion or amount of a qualifying loan that may be repaid is 33 1/3 percent or $1,500, whichever is greater, toward the remaining original unpaid principal amount borrowed after each completed year of active duty. This was further defined in the contents of the DA Form 3286-66 that the applicant signed upon enlisting. The opinion also stated that the applicant was sent a DD Form 2475 on 30 August 1999. He was required to complete Section I of the application and forward the form to his current loan holders to complete Section III. The current loan holders were required to returned the completed DD Form 2475 to PERSCOM for final review and eligibility determination. However, when no response was received from the loan holder, additional requests were sent on 22 March and 12 April 2001, and on 14 March 2002. The required verification was not received until May 2002 from NELNET after the applicant completed his third year of active duty. The total remaining original unpaid principal verified was $6,660. Records indicated that all three payments totaling $6,660 were authorized; however, there was no alternative but to make multiple payments. Payments authorized under the LRP were taxable in the year they were paid.

In conclusion, PERSCOM stated that the Army does not assume an individual's loan. The individual remains responsible for his loan status. Public law prohibits payment toward interest payment on any portion of loans or reimbursement of payments made.

The applicant was provided a copy of this opinion for possible comment prior to consideration of this case but no response was received.

The Loan Repayment Program is a Department of the Army enlistment option authorized by Public Law 99-145. This option is designed to increase Test Score Category I-IIIA accessions. Before entering active duty, the loan must not be in default. The borrower is responsible for obtaining a deferment/forbearance with the loan holder and the loan must remain in good standing throughout the repayment process. Active Army LRP participants earn their first loan repayment after completion of a full year of active duty and for each full year thereafter, up to
3 years. Payment of 33 1/3 percent or $1,500, whichever is greater, is authorized annually to the loan holder on the total remaining original outstanding principal balance. Public Law 99-145, Section 671(a)(1) precludes the authorization of payments toward interest or the reimbursement of payments made. There are no exceptions to the law.





DISCUSSION: Considering all the evidence, allegations, and information presented by the applicant, together with the evidence of record, applicable law and regulations, it is concluded:

1. The Board considered the applicant's contention that due to no fault of his own, no payment was made on his loans until he completed 37 months of honorable active duty service. However, the advisory opinion stated that the applicant was provided a copy of a DD Form 2475 to complete and forward to his current loan holders. The loan holders were required to return the form to PERSCOM for final review and eligibility determination. No response was received from the loan holder and additional requests were sent.

2. The required verification was received on 14 March 2002 after he completed his third year of active duty. Payments were verified and authorized in the amount of $6,660. At that time, the only alternative was to make multiple payments which were taxable in the year they were paid.

3. The Board also noted the applicant’s request that the Army should reimburse him $448 of additional interest that was accrued on his student loans due to late payment by the Government. However, Public Law 99-145, Section 671(a)(1) precludes the authorization of payments toward interest or the reimbursement of payments made.

4. In order to justify correction of a military record the applicant must show to the satisfaction of the Board, or it must otherwise satisfactorily appear, that the record is in error or unjust. The applicant has failed to submit evidence that would satisfy this requirement.

5. In view of the foregoing, there is no basis for granting the applicant's request.

DETERMINATION: The applicant has failed to submit sufficient relevant evidence to demonstrate the existence of probable error or injustice.

BOARD VOTE:

________ ________ ________ GRANT

________ ________ ________ GRANT FORMAL HEARING

__rw____ ___lb___ ___be___ DENY APPLICATION

                  Carl W. S. Chun
                  Director, Army Board for Correction
of Military Records

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INDEX

CASE ID	AR2002080970
SUFFIX
RECON
DATE BOARDED	20030408
TYPE OF DISCHARGE	HD
DATE OF DISCHARGE	Active duty
DISCHARGE AUTHORITY	AR active duty
DISCHARGE REASON
BOARD DECISION	DENY
REVIEW AUTHORITY
ISSUES 1.	1026
2.
3.
4.
5.
6.