RECORD OF PROCEEDINGS


      IN THE CASE OF:


      BOARD DATE:            26 May 2005
      DOCKET NUMBER:   AR20040007504


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

|     |Mr. Carl W. S. Chun               |     |Director             |
|     |Mr. Joseph A. Adriance            |     |Analyst              |


      The following members, a quorum, were present:

|     |Mr. Melvin H. Meyer               |     |Chairperson          |
|     |Ms. Seema E. Salter               |     |Member               |
|     |Ms. Susan A. Powers               |     |Member               |

      The Board considered the following evidence:

      Exhibit A - Application for correction of military records.

      Exhibit B - Military Personnel Records (including advisory opinion,
if any).

THE APPLICANT'S REQUEST, STATEMENT, AND EVIDENCE:

1.  The applicant requests, in effect, payment of late fees accrued on
student loans due to the late payment of Loan Repayment Program (LRP)
benefits on the part of the Department of the Army.

2.  The applicant states, in effect, that he entered the Army with LRP
benefits that entitled him to have 331/3 percent of the original balance of
his student loans per year for three years, which would be paid on the
anniversary of his enlistment
(7 March).  He claims that after several attempts and with the assistance
of a Member of Congress, the Army finally began paying his student loans on
or about 24 September 2001, when in fact the first payment was due on 7
March 2001.  He claims to have had a deferment on payment of his student
loans for three years.  However, because of the Army’s late payment, he
incurred fees of $2,216.78, which he is now required to pay.  He states
that the governing law requires LRP payments to be applied to principal of
the loan; however, the money paid by the Army was first applied toward
interest by the lending institution before any was applied to the principal
amount of the loan.

3.  The applicant provides the following documents in support of his
application:  Self-Authored Statement, Enlistment Contract, Promissory
Notes, Electronic Mail (e-mail), and Lender Itemized Letter.

CONSIDERATION OF EVIDENCE:

1.  On 7 March 2000, the applicant enlisted in the Regular Army for six
years and entered active duty.  The applicant’s Enlistment Contract
includes a Statement of Understanding United States Army Incentive
Enlistment Program (DA Form 3286-66), which is identified as Annex D.

2.  Annex D of the applicant’s enlistment contract confirms he was enlisted
with the LRP incentive.  In this document, the applicant acknowledged that
he understood that under the LRP, the Government would repay a designated
portion of any loan incurred that was made, ensured or guaranteed under
Part B of the Higher Education Act of 1975 (Guaranteed Student Loan), or
any loan under Part E of such act (National Direct Student Loan) after 1
October 1975 and prior to his enlistment in the Army up to $65,000.00.

3.  In Annex D, the applicant further acknowledged that he understood that
enlistment under the LRP ensured him, provided he met and maintained the
prescribed prerequisites, that the portion of amount of loan that may be
repaid was 331/3 percent, or $1,500.00, whichever was greater, of the
unpaid principal balance for each year of service completed up to
$65,000.00.  The applicant also acknowledged that he understood that
repayment would be made only after each successful year of active duty he
performed commencing on the date of his enlistment.  He further stated that
he understood that he must secure a military deferment or maintain his
account in good standing until such time as repayment was started.

4.  On 18 April 2000, the lending institution notified the applicant that
his account was more than 30 days past due.  It further requested payment
to clear the delinquent account.

5.  On 25 May 2000, The Adjutant General (TAG), Army responded to a 27
April 2000 Congressional Inquiry made on behalf of the applicant.  In this
response, the Member of Congress was informed that the law governing the
LRP prohibited payment of interest on a loan, or reimbursement for loan
payments made; and that the applicant had acknowledged in his enlistment
contract that it was his responsibility to obtain a deferment and to
maintain his account in good standing until such time as repayment was
started.  It also requested that the Member of Congress advise the
applicant to coordinate a loan deferment with the lending institution.

6.  In connection with the processing of this case, an advisory opinion was
obtained from the Acting Chief, Education Incentives and Counseling Branch,
Army Human Resources Command (HRC).  This official recommended disapproval
of the applicant’s request.  She stated that the applicant initiated a
Congressional Inquiry in April 2000, approximately one month after he
entered active duty.  As indicated in their response to that Congressional
Inquiry, LRP payments are authorized only upon successful completion of the
first year of active duty service.  LRP participants are usually contacted
by HRC during their 8th month of service to start the loan repayment
process.  However, in the applicant’s case, this process was initiated
earlier.  This official further stated that payment could only be
authorized on loans that have been verified by the loan holders.

7.  The HRC official also indicated that an application was enclosed with
the response to the Congressional Inquiry in May 2000.  Additional requests
for this information were sent in December 2000, May 2001 and June 2001.
The completed application was finally received from the loan holder in July
2001.  The loan holder verified the total remaining original unpaid balance
was $50,220.00.  HRC records confirm three payments that totaled this
amount were made to the loan holder.  This HRC official further stated that
the Army does not assume an individual’s loan as part of the LRP and that
the individual remains responsible for the status of his/her loan.  The
governing law prohibits repayment for payments already made, and payment of
interest.  There are not exceptions to the governing law and regulations
provide no provisions for exceptions.

8.  On 2 November 2004, the applicant responded to the HRC advisory
opinion.  He stated that he provided the necessary paperwork on time and he
is seeking repayment of interest monies due that resulted from the Army’s
late initial payment of his loans.

9.  Title 10 of the United States Code, section 2171 (10 USC 2171), which
provides the legal authority for the education loan repayment program for
enlisted members on active duty in specified military specialties.  The law
states, in pertinent part, that loans that qualify for repayment are
Guaranteed Student Loan/Stafford Loans, National Direct Student
Loan/Perkins Loans, William D. Ford Loans, Supplemental Loans for Students,
Federally Insured Student Loans (FISL), Parent Loan for Undergraduate
Students (PLUS), Auxiliary Loan Assistance for Students (ALAS), and
consolidated loans which fall under Title IV, Part B or E of the Higher
Education Act of 1965, or William D. Ford Loan.  It further specifies that
payment of such loans shall be made on the basis of each complete year of
service performed as an enlisted member in a military specialty specified
by the Army.  The Government will not make any payments to the soldier or
reimburse a soldier if he or she pays off a student loan.  The Government
will only pay the lending institution.

10.  Army Regulation 621-202 (Army Educational Incentives and Entitlements)
prescribes the Army-unique policies, responsibilities, and procedures for
the administration of veterans' education programs and education incentives
authorized by law.

11.  Chapter 3 of the incentives regulation contains the policy regarding
the LRP. It states, in pertinent part, that enrollment in the LRP does not
exempt a Soldier from the obligation to repay the loan.  The Soldier
remains responsible to secure a deferment from the lender and the lender
must acknowledge and approve all requests for deferment.  The regulation
further stipulates that the Army will not repay loans or portions of loans
that are in default.  It will not repay delinquent payments, their interest
and associated charges.  In addition, the Army will not make payments to
Soldiers and will not reimburse Soldiers for payment made by them or any
other individual.

12.  Paragraph 3-6 of the Army incentives regulation states that LRP
Soldiers earn the first loan repayment after completion of a full year of
enlisted service.  For each year of initially contracted service, the Army
will repay 331/3 percent of $1,500.00, whichever is greater, on the
remaining outstanding principal balance. Further, it states the Army will
not pay more than the outstanding principal amount borrowed or the
principal balance remaining when the Soldier enters active duty.

DISCUSSION AND CONCLUSIONS:

1.  The applicant’s contention that he should be reimbursed for interest
that accrued to his student loans because of the Army’s late payment of his
initial LRP payment was carefully considered.  However, by law and
regulation, the Army will repay the amount of the original balance or the
balance remaining upon enlistment of a member’s qualifying student loans
for a LRP Soldier.  The Army will not repay loans or portions of loans that
are in default, delinquent payments, their interest and associated charges.


2.  In Annex D of his enlistment contract, the applicant acknowledged that
he understood that repayment of his student loans would be limited to the
unpaid principal amount of the loans, and that repayment would be made only
after each successful year of active duty he performed commencing on the
date of his enlistment.  He also acknowledged that it was his
responsibility to secure a military deferment, or to maintain his account
in good standing until such time as repayment was started.

3.  The evidence of record in this case confirms the Army paid the original
total principal amount of qualifying student loans in question
($50,220.00), as was required under the terms of Annex D of the applicant’s
enlistment contract.  As a result, repayment of any interest payments that
resulted from the applicant’s accounts not being deferred or maintained in
good standing remains a matter for resolution between the applicant and the
lending institution.
4.  The independent evidence provided by the applicant confirms that he
experienced difficulties with the lending institution in regard to
deferments and interest payments that began prior to the first LRP coming
due, as evidenced by April 2000 delinquent account notice from the lending
institution, and the subsequent Congressional Inquiry.  As a result, there
is insufficient evidence to show that his difficulties with interest
payments on the loans in question were solely because the first LRP
payment, which was not even originally due until March 2001, was not made
on the first anniversary of his enlistment.

5.  The evidence also shows that Army officials initiated the loan
repayment process early in the applicant’s case.  In its response to the
April 2000 Congressional Inquiry made on behalf of the applicant, the
responsible Army officials forwarded the necessary application required to
make the first LRP payment due in March 2001.  These officials also
followed-up this initial action by sending several more blank applications.
 Given these facts, it appears the fault for any delay in the first LRP
payment rests with the failure of the applicant and lending institution to
respond to these Army initiatives and return the application in a timely
manner.

6.  In view of the facts of this case, it is concluded that the Army has
satisfied
the LRP provisions of the applicant’s enlistment contract and has fulfilled
its obligations to pay the original principal balance of the applicant’s
qualifying
loans.  Further, as evidenced by the original LRP annex of his contract,
the applicant knew or should have known that it was his obligation to keep
his loans in good standing and to obtain any necessary deferments prior to
the first LRP payment.

7.  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.
BOARD VOTE:

________  ________  ________  GRANT FULL RELIEF

________  ________  ________  GRANT PARTIAL RELIEF

________  ________  ________  GRANT FORMAL HEARING

___MHM_  ___SES_  ___SAP _  DENY APPLICATION

BOARD DETERMINATION/RECOMMENDATION:

The evidence presented does not demonstrate the existence of a probable
error or injustice.  Therefore, the Board determined that the overall
merits of this case are insufficient as a basis for correction of the
records of the individual concerned.




            ____Melvin H. Meyer___
                    CHAIRPERSON




                                    INDEX

|CASE ID                 |AR20040007504                           |
|SUFFIX                  |                                        |
|RECON                   |YYYYMMDD                                |
|DATE BOARDED            |2005/05/26                              |
|TYPE OF DISCHARGE       |N/A                                     |
|DATE OF DISCHARGE       |N/A                                     |
|DISCHARGE AUTHORITY     |N/A                                     |
|DISCHARGE REASON        |N/A                                     |
|BOARD DECISION          |DENY                                    |
|REVIEW AUTHORITY        |                                        |
|ISSUES         1. 1026  |113.0000                                |
|2.                      |                                        |
|3.                      |                                        |
|4.                      |                                        |
|5.                      |                                        |
|6.                      |                                        |


-----------------------
[pic]