RECORD OF PROCEEDINGS


      IN THE CASE OF:


      BOARD DATE:            26 October 2004
      DOCKET NUMBER:   AR2004106071


      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             |
|     |Mrs. Nancy L. Amos                |     |Analyst              |


      The following members, a quorum, were present:

|     |Mr. John N. Slone                 |     |Chairperson          |
|     |Mr. Curtis L. Greenway            |     |Member               |
|     |Ms. Eloise C. Prendergast         |     |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 the Army pay the interest on his student
loan.

2.  The applicant states that the loan in question slipped through the
cracks through no fault of his.  This is verified by the Army's
acknowledgement and payment of the original principal, causing excess
interest to compound unjustly.  He states that all loans appeared to be
paid off on schedule but years later he received notices showing an
outstanding balance on a past, qualified loan.  The Army paid off the
loan's principal but not the accrued interest.

3.  The applicant provides his enlistment contract; his DD Form 214
(Certificate of Release or Discharge from Active Duty); a memorandum from
the U. S. Total Army Personnel Command (PERSCOM) dated 1 May 1996; a letter
from the applicant to PERSCOM dated 21 May 1996; and a memorandum from
PERSCOM dated 14 August 1996.

4.  The applicant also provides a U. S. Department of Education Notice of
Acceleration dated 25 July 2003; an undated letter from PERSCOM; a letter
from the applicant to the U. S. Department of Education dated 26 August
2003; a letter from PERSCOM to the applicant dated 29 October 2003; a
Student Loan Interest Statement dated 23 January 2004; and a U. S.
Department of Education notice dated 6 March 2004.

CONSIDERATION OF EVIDENCE:

1.  On 9 March 1995, the applicant entered the Delayed Entry Program.  His
DA Form 3286-66 (Statement of Understanding, United States Army Incentive
Enlistment Program) shows he enlisted for the Loan Repayment Program (LRP)
up to $55,000.  He acknowledged that enlistment for the LRP ensured him,
provided he met and maintained the prescribed prerequisites, that the
portion or amount of the loan 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.  He acknowledged that repayment would be made
only after each successful year of active duty that he performed commencing
on the date of his enlistment in the Regular Army.

2.  On 29 June 1995, the applicant enlisted in the Regular Army for 6 years
in pay grade E-4.  At that time, he had three qualifying student loans that
were not in default.  One loan, the loan in question, was a Perkins Student
Loan in the amount of $4,500.00.

3.  By memorandum dated 1 May 1996, PERSCOM requested the applicant provide
certain documents to verify his eligibility for the LRP.  He provided the
requested documents on 21 May 1996.

4.  By letter to PERSCOM dated 28 July 1996, the applicant stated, in part,
"…The Loan Servicing Center, holder of my GSL has received and processed
the DD Form 2475 and is waiting for payment…I am concerned as to the reason
why payment has not been made…"

5.  By memorandum dated 14 August 1996, PERSCOM provided the applicant a DD
Form 2475 (DOD Educational Loan Repayment Program Annual Application) with
a cover letter.  He was advised to make as many copies as needed, to
complete his portion of the form, and to mail the package to the holder of
his student loan.  He was advised he would be authorized 33 and 1/3 percent
or $1,500, whichever was greater, toward the remaining original unpaid
principal balance of his qualifying student loans after each completed year
of active duty.

6.  On 28 June 2001, the applicant was placed on the Temporary Disability
Retired List.

7.  On 25 July 2003, the U. S. Department of Education informed the
applicant that payment of his $4,500.00 Perkins Student Loan was overdue.
At that time, interest due was $1,766.84.  He immediately applied to
PERSCOM for repayment of the loan and PERSCOM so paid the principal.

8.  By letter dated 23 October 2003, PERSCOM informed the applicant that
repayment of his U. S. Department of Education loan in the amount of
$4,500.00 had been made.  He was informed that a separate statement of
amount paid   (W-2) should be provided to him at tax year-end by the
Defense Finance and Accounting Service – Indianapolis Center.

9.  On 6 March 2004, the U. S. Department of Education notified the
applicant they confirmed their offer to accept $1,676.00 as full settlement
of his debt.

10.  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.  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.  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.

11.  In the processing of this case, an advisory opinion was obtained from
the    U. S. Army Human Resources Command (USAHRC, formerly PERSCOM),
Education Incentives and Counseling Branch.  USAHRC noted that before the
Army can make any loan repayments, additional loan verification information
from both the LRP participant and current loan holder(s) must be provided
to that office.  Verification for the applicant's qualifying student loans
– Stafford Loans totaling $14,880.00 and Supplemental Loans for Students
totaling $1,630.00 with the Sallie Mae Corporation was received and three
payments were authorized within his first three years of active duty.

12.  The advisory opinion further noted that USAHRC did not receive the
required loan verification from the applicant and the U. S. Department of
Education for the additional $4,500.00 until September 2003.  The total
remaining original unpaid principal verified by the U. S. Department of
Education was $4,500.00 and payment was immediately authorized.  USAHRC
noted that the LRP has stringent criteria and regulatory guidance precludes
the authorization of payments toward interest and the reimbursement
payments made with no provisions for waiving this requirement.

13.  A copy of the advisory opinion was provided to the applicant for
comment or rebuttal.  The applicant did not respond within the given time
frame.

14.  On 21 October 2004, USAHRC, Education Incentives and Counseling Branch
confirmed that they notify the soldier when annual repayment of a student
loan has been made.  The notification identifies the loan repaid and the
amount repaid (similar to the 29 October 2003 letter sent to the
applicant).

DISCUSSION AND CONCLUSIONS:

1.  The letter to PERSCOM dated 28 July 1996, in which he stated, in part,
"…The Loan Servicing Center, holder of my GSL… is waiting for payment…I am
concerned as to the reason why payment has not been made…" is noted.
However, it does not appear that this letter refers to the U. S. Department
of Education Perkins Student Loan.  There is no clear connection between
"GSL" and Perkins Student Loan.
2.  The applicant should have been aware of the total amount of his three
student loans.  His enlistment contract and the 14 August 1996 memorandum
from PERSCOM advised him he would be authorized 33 and 1/3 percent or
$1,500, whichever was greater, toward the remaining original unpaid
principal balance after each completed year of active duty.  For three
years (in 1996, 1997, and 1998), he should have received letters informing
him that repayment of two of his student loans, in a certain amount, had
been made.  He should have questioned at the time why he did not receive
notification that the Perkins Student Loan had been made.

3.  The applicant should have received a separate statement of amount paid
at tax year-end (for each of those three years) and he should have been
able to determine each year that only two/thirds of the amount due to be
repaid was repaid.

4.  It is acknowledged that the applicant states that all loans appeared to
have been paid off on schedule but he provides no evidence to show why he
was led to believe so.  In the absence of such evidence, there is
insufficient justification to warrant granting the relief requested.

BOARD VOTE:

________  ________  ________  GRANT FULL RELIEF

________  ________  ________  GRANT PARTIAL RELIEF

________  ________  ________  GRANT FORMAL HEARING

__jns___  __clg___  __ecp___  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.




            __John N. Slone_______
                    CHAIRPERSON

                                    INDEX

|CASE ID                 |AR2004106071                            |
|SUFFIX                  |                                        |
|RECON                   |                                        |
|DATE BOARDED            |20041026                                |
|TYPE OF DISCHARGE       |                                        |
|DATE OF DISCHARGE       |                                        |
|DISCHARGE AUTHORITY     |                                        |
|DISCHARGE REASON        |                                        |
|BOARD DECISION          |DENY                                    |
|REVIEW AUTHORITY        |Mr. Chun                                |
|ISSUES         1.       |112.12                                  |
|2.                      |                                        |
|3.                      |                                        |
|4.                      |                                        |
|5.                      |                                        |
|6.                      |                                        |


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