RECORD OF PROCEEDINGS


      IN THE CASE OF:


      BOARD DATE:        16 August 2005
      DOCKET NUMBER:  AR20040008818


      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. Eric S. Moore                 |     |Analyst              |


      The following members, a quorum, were present:

|     |Mr. Melvin H. Meyer               |     |Chairperson          |
|     |Mr. John T. Meixell               |     |Member               |
|     |Mr. James B. Gunlicks             |     |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 college loans under the
terms of the Student Loan Repayment Program (LRP).

2.  The applicant states, in effect, that he was told by his recruiter that
his Alternative Student Loans qualified for the LRP.  Now he has a
$46,595.72 debt and is being told that the loans do not qualify under the
LRP.  He now believes that he was misinformed upon entering the US Army as
to the eligibility of his student loans under the LRP.

3.  The applicant provides a letter dated 16 June 2004 from the Acting
Chief, Education Incentives and Counseling Branch, U.S. Army Human
Resources Command (HRC); a copy of his DD Form 4/1 (Enlistment/Reenlistment
Document); a copy of his DA Form 3266-22 (Statement of Understanding United
States Army Incentive Enlistment Program); a copy of his DD Form 2475 (DOD
Educational Loan Repayment Program (LRP), Annual Application); and a copy
of his Federal Truth in Lending Disclosure letter from Key Bank USA.

CONSIDERATION OF EVIDENCE:

1.  The applicant’s military records show that on 12 June 2003, he enlisted
in the Regular Army for 4 years.  A DA Form 3286-66 (paragraph 4) on file
confirms the options and incentives the applicant elected during his
enlistment processing.  The LRP is one of the incentives authorized and the
applicable LRP terms are listed in paragraph 4 of this form.

2.  The LRP provisions of paragraph 4 state, in pertinent part, that the
applicant understood he must disenroll from the GI Bill at the time he
entered active duty and if he failed to do this he would not be eligible
for the LRP.  It also indicated that the applicant understood that the
government will repay a designated portion of any loan he incurred that was
made, insured or guaranteed under Part B of the Higher Education Act
(Guaranteed Student Loan) or any loan under Part E of such act (National
Direct Student Loan) after 1 October 1975 and before he enlisted in the
Army.

3.  Paragraph 4 of the DA Form 3286-66 further indicated that the
applicant’s enlistment for the LRP ensured him, provided he met and
maintained the prescribed prerequisites, that the portion or amount of his
student loans that could be repaid was 33 1/3 percent or $1,500, whichever
was greater of the unpaid principal balance for each year of service
completed (up to a maximum of $65,000).
4.  The applicant and the service representative signed the DA Form 3286-66
on the date he entered active duty, 12 June 2003, and there is no
indication on this form that any questions were raised regarding the
eligibility of his student loans for repayment.

5.  On 12 June 2003, the recruiting guidance counselor completed Section V
(Recertification) and Section VI (Remarks) of the Record of Military
Processing-Armed Forces of the United States (DD Forms 1966/3 and 1966/4).
These documents contained an entry confirming the applicant’s participation
in the LRP and certified that no changes to the agreements were necessary.
There was no indication or entries regarding the eligibility/ineligibility
of any of his student loans.

6.  On 16 June 2004, the Acting Chief, Education Incentives and Counseling
Branch, Human Resources Command (HRC) notified the applicant that his loans
totaling $46,595.72 did not qualify for repayment under the LRP.  The
applicant was advised to apply to this Board if he believed he was not
properly counseled or that an error or injustice had occurred.

7.  Army Regulation 601-210 (Regular Army and Army Reserve Enlistment
Program) prescribes eligibility criteria governing the enlistment of
persons, with or without prior service (PS), into the Regular Army (RA) and
the United States Army Reserve (USAR).  Chapter 6, section II contains
guidance on the Guidance Counselor Processing Phase.  It states, in
pertinent part, that Guidance Counselors will use the supporting automated
systems and updated regulatory material applicable to military occupational
specialty (MOS) and available options to counsel all applicants on their
enlistment options.  It further states that Guidance Counselors will
counsel applicants who failed to meet specific qualifications for options
for which they applied and advise them of other available options.

8.  Chapter 9 (Enlistment Programs/Options) indicates that these
programs/options are designed to merge valid Army requirements with
personal desires.  Table 9-4 contains guidance on enlistment option program

9C (Bonus/Army College Fund/Loan Repayment Program).  It contains specific
guidance pertaining to the LRP and indicates that the government will repay
a designated portion of any loan incurred that was made, insured, or
guaranteed under part B of the Higher Education Act of 1965 (Guaranteed
Student Loan) or any loan under part E of such act (National Direct Student
Loan) after 1 October 1975 and before enlistment into the Regular Army.


9.  Table 9-4 also provides program processing procedures that require Army
Guidance Counselors to accomplish specific counseling and administrative
actions in connection with processing members enlisting with the LRP
incentive.  These actions include ensuring members are disenrolled from the

GI Bill; verifying that members have qualifying loans; and advising members
of any loan that is not eligible.

10.  The same regulation further states that Guidance Counselors are
specifically required to confirm they accomplished all the processing
procedures by making the appropriate entries in the DD Form 1966 and DA
Form 3286-66.  This includes a statement regarding the applicant’s
eligibility for the LRP, which includes any factors that may disqualify
them from receiving the LRP benefit, and ensuring that the applicant’s
acknowledgement of this fact is also recorded in the remarks section of the
DD Form 1966.

11.  The LRP is a Department of the Army enlistment option authorized by
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.

12.  U.S. Army Recruiting Command Regulation 621-1 (Montgomery GI Bill,
Army College Fund, and Loan Repayment Program), current version effective
30 November 1998, paragraph 4-4a states that applicants for the LRP are no
longer authorized to ship without documents or verification of eligible
loans.

13.  Title 10, U.S. Code, section 1552, the law which provides for the
Board, states that “The Secretary may pay, from applicable current
appropriations, a claim for the loss of pay, allowances, compensation,
emoluments, or other pecuniary benefits, or the repayment of a fine or
forfeiture, if, as a result of correcting a record under this section, the
amount is found to be due the claimant on account of his or another’s
service in the Army, Navy, Air Force, Marine Corps or Coast Guard, as the
case may be.”

DISCUSSION AND CONCLUSIONS:

1.  It is clear the applicant’s alternative student loan from Key Bank USA
did not meet the criteria established by law and regulation to qualify for
repayment by the Army under the LRP.  The loans were not made, insured, or
guaranteed under Title IV, Part B, D, or E of the Higher Education Act of
1965, as is required.  However, this is not the overriding factor in this
case given the equity considerations and the resultant injustice.

2.  Evidence in the applicant’s enlistment contract established a
contractual agreement between the applicant and the Army and the record
clearly shows that the responsible recruiting officials failed to make
reference to any loans ineligible for payment under the LRP, as evidenced
by the absence of DD Form 1966 entries regarding ineligible student loans.


3.  The governing regulations require Army Guidance Counselors to verify
and counsel applicants on their eligibility for the options they agreed to
prior to their departing for active duty.  Further, these counselors are
obligated to advise applicants on any options they agreed to, but are not
eligible for, and on any available alternatives.  Finally, counselors must
add entries to the enlistment contract and/or associated documents
confirming this verification of option and incentive eligibility and/or
counseling on ineligibility prior to a member departing for active duty.
In this case, counselors failed to properly document the ineligibility of
the applicant's student loans in the DD Forms 1966/3 and 1966/4 prepared on
the day he departed for active duty.

4.  In view of the facts of this case, it appears that the applicant
entered into a defective contract with the Army, based on the failure of
recruiting personnel to follow established regulatory guidelines in
connection with this enlistment processing, through no fault of his own.
Given the failure on the part of government officials to follow its own
regulations during the applicant's enlistment processing, it is appropriate
to rectify the resultant injustice at this time.

5.  In doing so, the applicant's military records should be corrected to
show his DA Form 3286-66 was amended to include the sentence “If a student
loan is accepted by the official processing you for enlistment as payable
under the LRP and the government fails to verify that the student loan
accepted actually is eligible under the Higher Education Act of 1965 and
such failure results in nonpayment of the loan by the LRP or the repayment
or default of the loan, the Army Board for Correction of Military Records
may pay the loan, at its sole discretion, in accordance with Title 10, U.S.
Code, section 1552."  This would allow the Board to invoke that provision
and pay him the amount the lending institution would have been paid for the
student loans.








BOARD VOTE:

___mm__  __jbg ___  ___jtm __  GRANT FULL RELIEF

________  ________  ________  GRANT PARTIAL RELIEF

________  ________  ________  GRANT FORMAL HEARING

________  ________  ________  DENY APPLICATION

BOARD DETERMINATION/RECOMMENDATION:

1.  The Board determined that the evidence presented was sufficient to
warrant a recommendation for relief.  As a result, the Board recommends
that all Department of the Army records of the individual concerned be
corrected by amending the applicant's DA Form 3286-66, Statement of
Understanding, U.S. Incentive Enlistment Program to include the sentence
“If a student loan is accepted by the official processing you for
enlistment as payable under the LRP and the government fails to verify that
the student loan accepted actually is eligible under the Higher Education
Act of 1965, and such failure results in nonpayment of the loan by the LRP
or the repayment or default of the loan, the Army Board for Correction of
Military Records may pay the loan, at its sole discretion, in accordance
with Title 10, U.S. Code, section 1552."

2.  Further, as a result of the foregoing correction the Defense Finance
and Accounting Service shall remit payment in the amount of $46,595.72 to
the applicant as a result of this correction, in the proper manner and time
according to the schedule of payments that would have been used under the
LRP.



                                  _____Melvin H. Meyer _____
                                            CHAIRPERSON



                                    INDEX

|CASE ID                 |AR20040008818                           |
|SUFFIX                  |                                        |
|RECON                   |                                        |
|DATE BOARDED            |2005/08/16                              |
|TYPE OF DISCHARGE       |                                        |
|DATE OF DISCHARGE       |                                        |
|DISCHARGE AUTHORITY     |                                        |
|DISCHARGE REASON        |                                        |
|BOARD DECISION          |GRANT                                   |
|REVIEW AUTHORITY        |Mr. Schneider                           |
|ISSUES         1.       |113.0000                                |
|2.                      |                                        |
|3.                      |                                        |
|4.                      |                                        |
|5.                      |                                        |
|6.                      |                                        |


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