RECORD OF PROCEEDINGS


      IN THE CASE OF:


      BOARD DATE:           21 October 2004
      DOCKET NUMBER:  AR2004106563


      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. James E. Anderholm            |     |Chairperson          |
|     |Ms. Deborah S. Jacobs             |     |Member               |
|     |Mr. Ronald J. Weaver              |     |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 Citizens Equity Federal Credit Union
(CEFCU) student loan be paid off as promised by the Army.

2.  The applicant states that his recruiter told him that the Army would
more than likely pay off the identified loan upon enlistment.  The
counselor at the Military Entrance and Processing Station (MEPS) assured
him that the loan would be paid off.  Once all promissory notes and other
required paperwork were compiled, his counselor again assured him that all
his loans would be paid off.

3.  The applicant states that getting all his loans paid off was a definite
influence on his enlisting.  With the Army paying off his student loans,
they would have been able to afford to send his wife to graduate school.
The fact the loan was not paid off prevented his wife from pursuing her
Masters degree.

4.  The applicant provides a statement from his wife; a timeline of events;
his DD Form 2475 (DOD Educational Loan Repayment program (LRP) Annual
Application); and a letter dated 21 November 2001 from the Chief, Education
Incentives and Counseling Branch, U. S. Total Army Personnel Command
(PERSCOM).

CONSIDERATION OF EVIDENCE:

1.  The applicant entered the Delayed Entry Program on 22 November 2000.
His DA Form 3286-66 (Statement of Understanding United States Army
Incentive Enlistment Program) shows that he enlisted for the LRP up to a
maximum repayment of $65,000 in addition to other incentives.  On this
form, he acknowledged that under the 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 1965 or any loan
under Part E of such act after 1 October 1975 and before he enlisted into
the Regular Army.

2.  None of the applicant's enlistment documents (to include his DD Form
1966 (Record of Military Processing - Armed Forces of the United States))
identified what student loans he had.

3.  The applicant enlisted in the Regular Army on 1 February 2001 for 4
years.  Prior to entry on active duty he had obtained several student
loans.

4.  On 21 November 2001, PERSCOM notified the applicant that his CEFCU loan
was a Private Loan College Aid which was not made, insured, or guaranteed
under Title IV Part B, D, or E of the Higher Education Act and was
therefore ineligible for repayment.

5.  In the processing of this case, an advisory opinion was obtained from
the Chief, Education Incentives and Counseling Branch, U. S. Army Human
Resources Command (formerly known as PERSCOM).  That office advised that
the applicant had other loans that qualified for repayment under the LRP
with a total remaining original unpaid principal of $14,435.06.  That
office noted that the total amount of compensation requested by the
applicant for the Private Loan College Aid is $10,524.61.

6.  A copy of the advisory opinion was provided to the applicant for
comment or rebuttal.  He elected not to provide comments or a rebuttal.

7.  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.

8.  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.

9.  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.

10.  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.

11.  U. S. Army Recruiting Command Regulation 621-1 (Montgomery GI Bill,
Army College Fund, and Loan Repayment Program), current version effective
30 November 1998, paragraph 4-4a states that applicants for the LRP are no
longer authorized to ship without documents or verification of eligible
loans.

12.  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.  The evidence of record shows that the applicant enlisted for the LRP
incentive.  He had obtained several student loans prior to his entry on
active duty and they were not in default prior to his entry on active duty.
 One or more of his loans qualified for repayment under the LRP; however,
the CEFCU loan did not meet the requirements for repayment under the Higher
Education Act and the LRP.

2.  The applicant and his wife stated that repayment of all of the
applicant's loans were a deciding factor in his enlisting.  The applicant
stated that his counselor at the MEPS assured him twice that all his
student loans were eligible for repayment.

3.  The regulation requires that the applicant be advised if any of his or
her student loans do not qualify for repayment and that the applicant
acknowledge same in the remarks section of the DD Form 1966 series.  No
entry was made in the remarks section of the applicant's DD Form 1966
reflecting the CEFCU loan's ineligibility for repayment as required.

4.  In the interest of justice and equity, it would be appropriate to
provide the applicant the full LRP benefits outlined in his enlistment
contract.

5.  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:

__jea___  __dsj___  __rjw___  GRANT 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 the total amount of
his CEFCU Private Loan College Aid, in the amount of $10,524.61, to which
he is entitled as a result of this correction.




            __James E. Anderholm_
                    CHAIRPERSON

                                    INDEX

|CASE ID                 |AR2004106563                            |
|SUFFIX                  |                                        |
|RECON                   |                                        |
|DATE BOARDED            |20041021                                |
|TYPE OF DISCHARGE       |                                        |
|DATE OF DISCHARGE       |                                        |
|DISCHARGE AUTHORITY     |                                        |
|DISCHARGE REASON        |                                        |
|BOARD DECISION          |GRANT                                   |
|REVIEW AUTHORITY        |Mr. Schneider                           |
|ISSUES         1.       |112.12                                  |
|2.                      |                                        |
|3.                      |                                        |
|4.                      |                                        |
|5.                      |                                        |
|6.                      |                                        |


-----------------------
[pic]