RECORD OF PROCEEDINGS


      IN THE CASE OF:


      BOARD DATE:        6 October 2005
      DOCKET NUMBER:  AR20040010960


      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             |
|     |Ms. Rosa M. Chandler              |     |Analyst              |


      The following members, a quorum, were present:

|     |Mr. Curtis Greenway               |     |Chairperson          |
|     |Mr. Richard T. Dunbar             |     |Member               |
|     |Ms. Laverne V. Berry              |     |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 that his $5,721.04 student loan made through
Sallie Mae Servicing Corporation (SMSC) be paid in accordance with his
enlistment option for the Army Student Loan Repayment Program (LRP).

2.  The applicant states, in effect, that the main reason he joined the
Army as an enlisted Soldier was the LRP, otherwise he would have enlisted
to serve as a commissioned officer.  He states he provided all of the
necessary paperwork, to include promissory notes, to his recruiter, a
counselor at the Military Entrance Processing Station (MEPS), and an
education specialist at Fort Jackson, South Carolina.  All three
individuals advised him that all of his loans, to include the SMSC loan,
met the criteria for payment under the LRP.

3.  The applicant provides:

      a.  Loan Application/Promissory Note for a Signature Education Loan
from SMSC, Panama City, Florida, signed by the applicant on 7 August 2000.

      b.  DD Form 2475 (Department of Defense (DOD) Educational
Loan Repayment Program (LRP)-Annual Application), dated August 9, 2004.


      c.  Letter from the US Army Human Resources Command (HRC), Education
and Incentives Counseling Branch, Alexandria, Virginia, dated 19 August
2004.

CONSIDERATION OF EVIDENCE:

1.  On 15 May 2003, the applicant enlisted in the US Army Reserve (USAR)
for a period of 8 years under the Delayed Entry Program (DEP).  On 13
November 2003, he was separated from the DEP and enlisted in the Regular
Army for 5 years and training in military occupational specialty (MOS) 97B,
Counter Intelligence Agent.

2.  The applicant's computer-generated Statement for Enlistment, United
States Army Enlistment Program, US Army Delayed Enlistment Program confirms
he enlisted for Program 9C, US Army Incentive Enlistment Program (US Army
Loan Repayment Program) – the Army LRP.  The applicant authenticated this
form acknowledging he understood the government would pay 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 1965 and
before enlistment into the RA.
3.  The evidence of record shows the applicant is currently serving on
active duty in the rank of sergeant (SGT/E-5).  On 9 August 2004, the
applicant submitted DD Form 2475 seeking repayment of his student loan.
The loan application, for a loan totaling $5,721.04, was returned and
disapproved as not qualifying for the LRP.

4.  In processing this case, it was determined the applicant has student
loans in the amount of $20,973.00 that do qualify for payment in accordance
with the LRP.  The government paid 33 and 1/3 percent of this loan in
November 2004 and an additional 33 and 1/3 percent is authorized for
payment in November 2005.  On 26 September 2005, the applicant confirmed
that this information is correct.

5.  Army Regulation 601-210 (Regular Army and Army Reserve Enlistment
Program) prescribes the eligibility criteria governing the enlistment of
persons, with or without prior service in the RA and Army Reserve.  It
contains guidance on enlistment option 9C (Bonus/Army College Fund/Loan
Repayment Program) and contains specific guidance pertaining to the LRP.
It provides that  the government will pay 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 1965 and before
enlistment into the RA.

6.  Army Regulation 601-210 provides that Army Guidance Counselors are
required 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.

7.  Army Regulation 601-210 also provides that Guidance Counselors are
specifically required to confirm that they accomplished all the processing
procedures by marking the appropriate entries on a Record of Military
Processing–Armed Forces of the United States DD Form 1966 and DA Form 3286-
66.  This includes a statement advising applicants of any loan he or she
has that is not eligible for repayment and ensuring the applicant’s
acknowledgement of this fact is also recorded in the Remarks Section of the
DD Form 1966.

8.  The LRP is a Department of the Army enlistment option authorized by
Public Law 99-145.  Loans that qualify for payment under the LRP are
Guaranteed Student Loan/Stafford Loans, National Direct Student
Loan/Perkins Loans, William D. Ford Loans, Supplemental Loans for Students,
Federally Insured Student Loans, Parent Loans for Undergraduate Students,
Auxiliary Loan Assistance for Students, and consolidated loans which fall
under Title IV, Part B or E of the Higher Education Act of 1965, or William
D Ford Loan.  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
payment 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 $1,500.00,
whichever is greater, is authorized annually to the loan holder on the
total remaining original outstanding principal balance.  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 pay the lending
institution.

9.  Title 10, U.S. Code, section 1552, the law, which governs the operation
of 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 payment 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 her or another service
in the Army, Navy, Air Force, Marine Corps or Coast Guard, as the case may
be".

DISCUSSION AND CONCLUSIONS:

1.  The applicant's SMSC loan does not meet the criteria established by law
for payment under the LRP; however, this is not the overriding factor in
this case given the equity considerations and the resultant injustice.

2.  The applicant's enlistment contract clearly establishes a contractual
agreement between him and the Army; the contract provides that he will
receive LRP benefits in connection with his active duty service.

3.  The applicant, based on information that is available, believed all of
his student loans were covered under the LRP up to the $65,000 limit and,
therefore, he made a decision to enlist and serve as an enlisted Soldier.
Subsequently, it has been determined this information was incorrect.

4.  As noted by the HRC, the contested loan, in the amount of $5,721.04, is
not insured under the Higher Education Act of 1965, because it does not
fall within this Act.  Therefore, there are no Army records that the Board
can correct that would allow payment of the applicant’s non-qualifying loan
under the LRP.

5.  Notwithstanding the above, there is no evidence to indicate the
applicant was ever clearly told that his SMSC private loan was not payable
under the LRP.  Therefore, the Board believes that equity requires the Army
to provide the applicant the LRP benefits outlined in his enlistment
contract up to the $65,000.

6.  In doing so, the applicant's military records may be corrected to show
his DA Form 1966 was amended to include the sentence "If a student loan is
accepted by the official processing a Soldier 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 a failure results in nonpayment of the loan by a the LRP or repayment
or default of the loan, the ABCMR may pay the applicant, 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 the applicant
$5,721.04, which is the amount his lending institution would have been paid
had the loans qualified for payment.

BOARD VOTE:

__clg___  __rtd___  __lvb___  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 the applicant's DA Form 1966 be amended to include the sentence "If a
student loan is accepted by the official processing a Soldier for
enlistment as payable under the LRP and the government fails to verify that
the student loan accepted actually is eligible for payment under the Higher
Education Act and such a failure results in nonpayment of the loan or
default of the loan, the ABCMR may pay the loan, at its sole discretion, in
accordance with Title 10, U.S. Code, section 1552".
2.  As a result of the above correction, the Defense Finance and Accounting
Service (DFAS) shall remit to the applicant $5,721.04 for his non-
qualifying student loan.  The applicant will submit to DFAS any additional
evidence that may be required to support such payment.



                                        Curtis L. Greenway
                                  ______________________
                                            CHAIRPERSON



                                    INDEX

|CASE ID                 |AR20040010960                           |
|SUFFIX                  |                                        |
|RECON                   |                                        |
|DATE BOARDED            |20051006                                |
|TYPE OF DISCHARGE       |                                        |
|DATE OF DISCHARGE       |                                        |
|DISCHARGE AUTHORITY     |                                        |
|DISCHARGE REASON        |                                        |
|BOARD DECISION          |GRANT                                   |
|REVIEW AUTHORITY        |                                        |
|ISSUES         1.       |128.1400                                |
|2.                      |                                        |
|3.                      |                                        |
|4.                      |                                        |
|5.                      |                                        |
|6.                      |                                        |


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