RECORD OF PROCEEDINGS


      IN THE CASE OF:


      BOARD DATE:          29 March 2005
      DOCKET NUMBER:  AR2004106546


      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. Melvin H. Meyer               |     |Chairperson          |
|     |Mr. Patrick H. McGann, Jr.        |     |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 that his non-qualifying student loans be
declared qualified for payment in accordance with the Army Student Loan
Repayment Program (LRP).

2.  The applicant states that when he went to the Recruiting Station in
Moscow, Idaho, he initially inquired about the Army paying for law school.
He was told the Army did not have such an educational incentive program,
but that the Army would pay off his undergraduate student loans up to
$65,000.  He states that he felt serving as an enlisted Soldier with a
college degree did not make any sense, but he was advised that, as an
enlisted person, he could choose his career field for the next 4 years and
he could also be debt free.  Therefore, on 15 November 1999, he enlisted in
the Delayed Entry Program (DEP) so that he could complete his studies and
graduate from Washington State University before entering on active duty
status.

3.  The applicant states that, on 31 May 2000, he was separated from the
DEP and he entered on active duty.  It was not until he was completing his
final paperwork at the Military Entrance Processing Station (MEPS) in
Spokane, Washington that he saw in his contract that the Government would
pay "loans that qualify."  He questioned what this meant and he was told,
"his loans could not be in default, they had to remain in good standing and
he would be fine."  It was not until March 2002 that the Education
Incentives and Counseling Branch, US Total Army Personnel Command
(PERSCOM), Alexandria, Virginia advised him that this was not the case; his
private loans did not qualify.  He states his private loans were made only
for the purpose of education.  He chose to use the private loans because
they provided a lower interest rate.  He states that, had he known his
loans did not qualify, he would have entered the Army as an officer as the
difference in pay between an officer and enlisted Soldier would have
enabled him to pay off more of his debt than the Army has currently paid.

4.  The applicant provides in support of his request:


      a.  Two letters from the PERSCOM [currently known as the US Army Human
Resources Command (HRC)], dated 27 March and 13 May 2002.


      b.  Three Department of Defense (DOD) Educational LRP-Annual
Applications for repayment of private installment loans to Servus Financial
(International Education Finance Corporation).  The loans were issued on:
30 October 1997 in the amount of $9,777.00; 19 March 1997 in the amount
of $9,000.00; and 23 April 1998 in the amount of $5,461.00.
CONSIDERATION OF EVIDENCE:

1.  The available record show that, on 13 November 1999, the applicant
enlisted in the US Army Reserve (USAR) under the DEP.  On 31 May 2000, the
applicant was separated from the DEP and he enlisted in the Regular Army
(RA) for a period of 4 years and in pay grade E-3.

2.  The applicant's DA Form 3286-66 (Statement of Understanding, US Army
Incentive Enlistment Program) confirms he enlisted for training in military
occupational specialty (MOS) 96B, Intelligence Analyst, the Army
Station/Unit/Command/Area of Choice – Korea, and the LRP.  He also enlisted
for a Cash Bonus in the amount of $4,000 and the US Army Incentive Program
for $8,000.

3.  On 6 February 2002, the applicant made application for repayment of his
educational loans under the LRP.

4.  On 27 March 2002, the HRC notified the applicant that his private
installment loans made by Servus Financial did not qualify for payment
under the LRP.  He was advised he should apply to the Army Board for
Correction of Military Records (ABCMR) for repayment of these loans if he
believed he was not properly counseled or an error or injustice had
occurred.  On 24 March 2004, when this application was filed with the
ABCMR, the applicant was serving in an active duty status.  On 30 May 2004,
the applicant was honorably separated and transferred to the USAR Control
Group, St. Louis, Missouri after completing 4 years of active military
service.

5.  In the processing of this case, an advisory opinion was obtained from
the HRC, Education Incentives and Counseling Branch.  The advisory opinion
states that, as indicated in the 27 March 2002 correspondence to the
applicant, the terms of the LRP were outlined in the enlistment contract,
DA Form 3286-66, Statement of Understanding, US Army Incentive Enlistment
Program, Section 4.  The applicant acknowledged he understood the
provisions of the LRP as outlined in this contract.

6.  Additionally, the advisory opinion states that based on information
obtained from Servus Financial, the applicant's private installment loans
in the amount of $23,896.00 are non-qualifying because they were not made,
insured, or guaranteed under Title IV, Part B, D, or E of the Higher
Education Act of 1965.

7.  The applicant has other loans that do qualify for payment in accordance
with the LRP.  They include an:  ACS Stafford Loan in the amount of
$14,500.00; Sallie Mae Servicing Corporation (Stafford Loan) in the amount
of $5,500.00 Washington State University (Perkins Loan) in the amount of
$5,000.00 and an Academic Loan Resource (Stafford Loan) in the amount of
$2,125.00.  Appropriate payments have been authorized towards the
qualifying student loans.

8.  On 10 May 2004, the ABCMR provided the applicant an opportunity to
respond to the advisory opinion.  He failed to respond.

9.  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.  Table 9-
4 contains guidance on enlistment option 9C (Bonus/Army College Fund/Loan
Repayment Program).  It contains specific guidance pertaining to the LRP
and indicates 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 1975 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 RA.

10.  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.

11.  Army Regulation 601-210 further states 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.

12.  The LRP is a Department of the Army enlistment option authorized by
Public Law 99-145.  Loans that qualify for repayment 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 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 $1,500.00, 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.

13.  Title 10, U.S.C., 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 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 service
in the Army, Navy, Air Force, Marine Corps or Coast Guard, as the case may
be."

DISCUSSION AND CONCLUSIONS:

1.  The applicant's private installment loans with Servus Financial do not
meet the criteria established by law for repayment under the LRP; however,
this is not the overriding factor in this case given the equity
considerations and the resultant injustice.

2.  Consideration has been given the staff advisory opinion obtained from
the HRC; however, a careful review of the evidence of record reveals that
the applicant's enlistment contract clearly established a contractual
agreement between the applicant and the Army that indicates he would
receive LRP benefits in connection with his active duty service.

3.  The evidence of record shows correspondence from the Department of the
Army, Office of the Deputy Chief of Staff for Personnel, dated 2 February
1998; Subject: LRP Education Enlistment Incentive states that recruiting
personnel will review all student loan agreements prior to enlisting the
soldier to ensure that the soldier knows exactly which loans qualify for
repayment prior to enlistment in the DEP and that no soldier is allowed to
ship for basic training without this verification.  There is no record of
this verification having been accomplished in this case.

4.  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.  Subsequently, it has been
determined this information was incorrect.

5.  As noted by the HRC, the contested loans, totaling $23,896.00, are not
insured under the Higher Education Act of 1965, therefore, they do not fall
within this Act.  Therefore, there are no Army records that the Board can
correct that would allow the repayment of the applicant’s non-qualifying
loans under the LRP.

6.  Notwithstanding the above, there is no evidence to indicate the
applicant was ever clearly told that his private installment loans with
Servus Financial were not repayable under the LRP.  Therefore, the Board
believes that equity requires
the Army to provide the applicant the LRP benefits outlined in his
enlistment contract.

7.  In doing so, 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 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 1975 and
such a failure results in nonpayment of the loan by the LRP or the
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 $23,896.00 to
the applicant for his non-qualifying student loans, which is the amount his
lending institutions would have been paid had the loans qualified for
repayment.

BOARD VOTE:

__mhm___  __phm___  __sap___  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, Statement of Understanding, US Army
Incentive Enlistment Program 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 under the Higher Education Act of 1975 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 a total of $23,896.00.  The
applicant will submit to DFAS any additional evidence that may be required
to support such payment.



                 Melvin H. Meyer
            ______________________
                    CHAIRPERSON



                                    INDEX

|CASE ID                 |AR2004106546                            |
|SUFFIX                  |                                        |
|RECON                   |                                        |
|DATE BOARDED            |20050329                                |
|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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