RECORD OF PROCEEDINGS


      IN THE CASE OF:


      BOARD DATE:          15 February 2005
      DOCKET NUMBER:  AR2004106548


      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:

|     |Ms. Jennifer L. Prater            |     |Chairperson          |
|     |Mr. Thomas A. Pagan               |     |Member               |
|     |Mr. Kenneth W. Lapin              |     |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, that her American Education Services
(AES) loan in the amount of $36,250.15 be declared qualified for payment in
accordance with the Army Student Loan Repayment Program (LRP).

2.  The applicant states, in effect, that primarily, she joined the
military to have her loans repaid.  Both her recruiter and Military
Entrance Processing Station (MEPS) personnel stated that her loans met the
requirement for payment.

3.  The applicant provides a:

      a.  Copy of a memorandum, from the United States (US) Army Human
Resources Command (HRC), Alexandria, Virginia, dated 4 March 2004.


      b.  DD Form 2475 (Department of Defense (DOD) Educational
LRP-Annual Application).


      c.  Loan Application/Promissory Note from Bank One, Columbus Ohio,
signed by the applicant on 27 August 2001.

CONSIDERATION OF EVIDENCE:

1.  On 29 August 2002, the applicant enlisted in the US Army Reserve (USAR)
under the Delayed Entry Program (DEP).  On 20 February 2003, she was
separated from the DEP and enlisted in the Regular Army for 3 years and
training in military occupational specialty (MOS) 54B, Chemical Operations
Specialist.

2.  The applicant's DA Form 3286-66 (Statement of Understanding-US Army
Incentive Enlistment Program) confirms she enlisted for:  the Army
station/unit/ command/program; an incentive cash bonus in the amount of
$6,000.00; and the LRP.  The applicant authenticated her DA Form 3286-66
acknowledging she 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 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.  She also acknowledged she understood the
Army would not pay student loans in excess of $65,000 and that she was
required to disenroll from the Montgomery GI Bill when she chose to utilize
the LRP.
3.  In December 2003, the applicant made application for payment of her
educational loans under the LRP.  On an unknown dated, the HRC, Education
Incentives and Counseling Branch notified the applicant that her AES,
private, loan through Bank One was not qualified for payment under the
provisions of the LRP.

4.  In the processing of this case, an advisory opinion was obtained from
the HRC, Education Incentives and Counseling Branch.  The advisory opinion
states that the applicant's AES loan in the amount of $36,295.15 was an
ALPN/Private Loan and it did not qualify for payment because it was not
made, insured, or guaranteed under Title IV, Part B, D, or E of the Higher
Education Act of 1965.  The applicant has other loans that do qualify for
payment in accordance with the LRP.  They include: Stafford Loans in the
amount of $5,250.00, and Perkins Loans in the amount of $2,200.00.  The HRC
recommends disapproval of the applicant's request.  However, the HRC states
that if the board does authorize compensation, any amount so authorized,
should be sent directly to the applicant.

5.  The applicant was provided an opportunity to respond to the above
advisory opinion.  On 8 June 2004, she responded by stating that, in 2002,
her promissory notes were turned-in to MEPS personnel (Boston,
Massachusetts) and she was advised that she would be notified before she
shipped to basic training, if her student loans did not meet LRP
requirements.  During in-processing at Fort Leonard Wood, Missouri, she
called the Defense Finance and Accounting Services (DFAS) and was advise
that DFAS had received her paperwork and that her loans would be paid after
she completed the first year of service.  Her AES loan clearly states that
it was made for the purpose of paying for tuition.  She has two smaller
loans that qualify for payment, but she would not have joined the military
only for payment of those loans.

6.  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 pay 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.
7.  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.

8.  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.

9.  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.

10.  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 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 AES 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.  Careful consideration has been given the staff advisory opinion
obtained from the HRC; however, the evidence indicates the applicant's
enlistment contract clearly established a contractual agreement between her
and the Army that provided she would receive LRP benefits in connection
with her active duty service.

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

4.  As noted by the HRC, the contested loans, totaling $36,295.15, 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 payment of the applicant’s non-qualifying
loans under the LRP.

5.  Notwithstanding the above, there is no evidence to indicate the
applicant was ever clearly told that her AES, 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 her enlistment
contract up to the $65,000.

6.  In doing so, the applicant's military records may be corrected to show
her 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 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 $36,295.15 to the
applicant for her non-qualifying student loans, which is the amount her
lending institutions would have been paid had the loans qualified for
payment.

BOARD VOTE:

__jlp___  __tap___  __kwl___  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 $36,295.15.  The
applicant will submit to DFAS any additional evidence that may be required
to support such payment.


                 Jennifer L. Prater
            ______________________
                    CHAIRPERSON




                                    INDEX

|CASE ID                 |AR2004106548                            |
|SUFFIX                  |                                        |
|RECON                   |                                        |
|DATE BOARDED            |20050215                                |
|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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