RECORD OF PROCEEDINGS


      IN THE CASE OF:


      BOARD DATE:        8 SEPTEMBER 2005
      DOCKET NUMBER:  AR20040010998


      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. Kenneth H. Aucock             |     |Analyst              |


      The following members, a quorum, were present:

|     |Mr. William Powers                |     |Chairperson          |
|     |Mr. John Meixell                  |     |Member               |
|     |Mr. Larry Olson                   |     |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.  In effect, the applicant requests that the Army pay his Signature
Student Loans funded through the Sallie Mae Servicing Corporation, totaling
$40,503.33.
2.  The applicant states the loan repayment program (LRP) was his primary
reason for enlisting in the Army. He was assured by his recruiter that his
signature loans were eligible for repayment under the LRP.  His promissory
notes were reviewed by his Delayed Entry Program (DEP)-In counselor and Out-
 counselor and his reception counselor, all who confirmed that his loans
would be repaid.  Nothing was said for him to believe otherwise.

3.  In July 2003 he renegotiated his contract to account for an unintended
extension of college for an extra semester, and submitted his promissory
notes to his recruiter, who assured him that they would be repaid under the
LRP.   In March 2004 he returned to the Baltimore MEPS (Military Entrance
Processing Station) to confirm his enlistment details, meeting with
numerous counselors, and at which time he submitted one last promissory
note for his final semester.  Nothing was said regarding his loans and they
were added to his contract.  He signed his contract, assuming everything
was in order, and on 5 March 2004 shipped to basic combat training at Fort
Jackson, South Carolina.  He met with counselors at the reception battalion
at Fort Jackson, and was informed that he had to forego his entitlement to
benefits under the Montgomery GI Bill in order to participate in the LRP.
The counselor confirmed his eligibility for loans under the LRP, and
specifically mentioned that Sallie Mae was a valid lender under the LRP.
He has since obtained documents detailing loans not covered by the LRP;
however, as a recruit none of this information was available to him.  His
loans exceed the $65,000.00 maximum allowed by the LRP.  He is financially
unable to pay these loans.

4.  The applicant provides a copy of a memorandum from his brother, the
station commander at the Fairfax Recruiting Station; a copy of a statement
of support from a fellow Soldier; copies of applications and promissory
notes for Signature Student Loans; a copy of a statement showing a partial
list of the applicant’s loans; a copy of the applicant’s 5 March 2004
enlistment contract; a copy of     DD Form 2366 (Montgomery GI Bill Act of
1984), signed by the applicant on       5 March 2004; a copy of a 14
October 2004 letter to the applicant from the Education Incentives and
Counseling Branch, Human Resources Command; and a letter from the applicant
notifying the Board of forthcoming evidence.

CONSIDERATION OF EVIDENCE:

1.  The applicant enlisted in the Army Reserve DEP for 8 years on 11 July
2003.  He enlisted for the Army training enlistment program and the Army
incentive enlistment program, to include the LRP and a cash bonus of
$20,000.00.  He signed a statement of understanding that he understood that
under the Loan Repayment Program (LRP) the government would repay a
designated portion of any loan he incurred that was made, insured, 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 before he enlisted into the Regular Army.
That statement indicated the specific types of loans that qualified for the
LRP. He stated that he understood that he had to disenroll from the GI Bill
in order to qualify for the LRP, and that disenrollment must be
accomplished at the time he entered on active duty.  He stated that he
understood that under the Army Student Loan Repayment Program, the Army
will not repay student loans in excess of $65,000.00 regardless of the
amount of his student loans, and that he was required to make all interest
payments of his student loans during his enlistment.  Other provisions of
that contract concerned the timing of the repayment, and other
administrative instructions.  The applicant and his counselor signed the
statement on 11 July 2003.

2.  The applicant was discharged from the Army Reserve DEP upon his
enlistment in the Regular Army for five years on 5 March 2004.  On that
date he completed and signed a statement similar to the above-mentioned
statement.  The statement was witnessed by his guidance counselor.

3.  On 5 March 2004 the applicant completed the DD Form 2366, stating that
he understood that he was enlisting for the LRP, and consequently was
disenrolling from the Montgomery GI Bill.  The statement was signed by the
applicant and a witness.

4.  None of the applicant’s enlistment documents, to include his DD Form
1966 series (Record of Military Processing – Armed Forces of the United
States), which he and his recruiter signed on 5 March 2004, identified what
student loans he had.

5.  On 14 October 2004 the Education Incentives and Counseling Branch of
the Human Resources Command informed the applicant that his Signature
Student Loans, totaling $40,503.33, did not qualify for payment under the
LRP.  He was informed to apply to this Board if he believed that he was not
properly counseled or an error or injustice had occurred.
6.  In a 23 October 2004 statement to this Board, a Soldier stated that he
witnessed the events of 5 March 2004 at the Fort Jackson reception
battalion, and the Noncommissioned Officer who was reviewing his and the
applicant’s promissory notes informed them that all their loans were
covered, confirming that the Sallie Mae loans disbursed to the applicant
were qualifying under the LRP.

7.  In a 1 December 2004 memorandum to the Army Recruiting Battalion
Baltimore at Fort Meade, Maryland, the station commander (the applicant’s
brother), Fairfax Recruiting Station, stated that he checked with the
recruiting battalion operations section and was assured that his brother’s
loans would be covered.  He stated that the applicant left for basic
training in March 2004 and was again assured that his loans were covered.


8.  The LRP is an educational enlistment incentive, which provides for
payment of a percentage of the unpaid principal of eligible student loans
for each year of active duty a Soldier completes.  Title 10, United States
Code, section 2171, limits loans that are eligible for repayment under the
LRP to those made, insured, or guaranteed under the Higher Education Act of
1965.  Before entering on 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.

9.  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 601-210 (Regular Army and Army Reserve Enlistment
Program) prescribes eligibility criteria governing the enlistment of
persons, with or without prior service, into the Regular Army and the U. S.
Army Reserve.  Chapter 9 (Enlistment Programs/Options) states that these
programs/options are designed to merge valid Army requirements with
personal desires.

11.  Army Regulation 601-210, Table 9-4, contains guidance on enlistment
option program 9C (Bonus/Army College Fund/Loan Repayment Program).  Table
9-4 provides program processing procedures that require specific counseling
and administrative actions in connection with processing members enlisting
with the LRP incentive.  In addition, Line 7 of Table 9-4 requires the
guidance counselor to verify that the applicant has qualifying loans if
enlisting for the LRP, to advise the applicant if any loan is not eligible,
and to have the applicant acknowledge same in the remarks section of the DD
Form 1966 series.

12.  U. S. Army Recruiting Command Regulation 621-1 (Montgomery GI Bill,
Army College Fund, and Loan Repayment Program), 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.  Although the Board does acknowledge that the applicant’s enlistment
contract indicates that his enlistment incentives included the LRP
incentive, the applicant failed to acknowledge that his enlistment contract
further clarified the provisions under which a student loan could be
repaid.  The Board notes that the applicant authenticated that portion of
his enlistment contract by his signature, both on his 11 July 2003
enlistment contract and his 5 March 2004 contract.  He also indicated that
he understood that regardless of the amount of student loans, the Army
would not repay any student loans in excess of $65,000.00.

2.  The evidence of record shows that although the applicant enlisted under
the LRP initiative, his Signature Student Loans in the amount of $40,503.33
did not qualify for repayment under the LRP.  Although there is no
available evidence, the applicant himself implies that the total amount of
his student loans, to include his Signature Student Loans, exceeds
$65,000.00.  The applicant was aware at the time he executed his enlistment
contract on 11 July 2003 that the Army would not repay any student loans in
excess of $65,000.00.

3.  The applicant states that he was assured that all his student loans
would be repaid, by his recruiter (his brother), and subsequently by
numerous counselors.  He stated that he provided all his loan information
to include his promissory notes.

4.  The lack of entry on the applicant's DD Form 1966 lends credence to the
applicant's contention that he was not properly informed concerning his
student loans; in effect, that recruiting personnel were apparently unaware
that his Signature Student Loans did not qualify for repayment.  Making the
required entries on the DD Form 1966 would have confirmed to the applicant
that his Signature Student Loans were ineligible and would have risked his
enlistment.  It appears that he was not properly counseled concerning his
Signature Student Loans.  Any reasonable doubt concerning the circumstances
surrounding the counseling of the applicant on the eligibility of his
student loans should be resolved in his favor.

5.  Therefore, in the interest of justice and equity, it would be
appropriate to provide the applicant the full LRP benefits outlined in his
enlistment contract; however, only to an amount not to exceed $65,000.00.

6.  The applicant’s military records may be corrected to show his DA Form
3286-66 was amended to include the sentence, “If a student loan is accepted
by the officials 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 his lending institutions
would have been paid under the LRP.

BOARD VOTE:

__WP___  ___JM __  __LO  ___  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 3286-66 be amended to include the sentence,
“If a student loan is accepted by the officials 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.  That as a result of the foregoing correction the Defense Finance and
Accounting Service shall remit payment to the applicant of the total amount
of his Signature Student Loans, $40,503.33, to which he is entitled as a
result of this correction at the appropriate rate and time, provided that
amount coupled with any other student loans that qualify for repayment
under the LRP does not exceed $65,000.00  The applicant will be required to
submit the appropriate evidence (promissory notes, etc.) to the Defense
Finance and Accounting Service to determine the amount due.







                                  _____William Powers_______
                                            CHAIRPERSON



                                    INDEX

|CASE ID                 |AR20040010998                           |
|SUFFIX                  |                                        |
|RECON                   |YYYYMMDD                                |
|DATE BOARDED            |20050908                                |
|TYPE OF DISCHARGE       |(HD, GD, UOTHC, UD, BCD, DD, UNCHAR)    |
|DATE OF DISCHARGE       |YYYYMMDD                                |
|DISCHARGE AUTHORITY     |AR . . . . .                            |
|DISCHARGE REASON        |                                        |
|BOARD DECISION          |GRANT                                   |
|REVIEW AUTHORITY        |                                        |
|ISSUES         1.       |112.12                                  |
|2.                      |                                        |
|3.                      |                                        |
|4.                      |                                        |
|5.                      |                                        |
|6.                      |                                        |


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