RECORD OF PROCEEDINGS


	IN THE CASE OF:	  


	BOARD DATE:	  20 October 2005
	DOCKET NUMBER:  AR20050001517 


	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. John J. Wendland, Jr.

Analyst


The following members, a quorum, were present:


Mr. John T. Meixell

Chairperson

Mr. James B. Gunlicks

Member

Ms. Jeanette R. McCants

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, payment of his educational loan under the terms of the Loan Repayment Program (LRP).

2.  The applicant states, in effect, his Army recruiter assured him that his education loan with the Pentagon Federal Credit Union (PFCU) was an eligible loan and would be paid under the LRP.  He asserts that this was one of the main reasons for his enlistment in the Army.  He claims the Army now indicates that the loan from the PFCU does not qualify for repayment under the LRP and he was advised to apply to this Board for relief.

3.  The applicant provides the following documents in support of his application:  a self-authored statement, dated 12 January 2005; Headquarters, U.S. Army Alaska, Army Education Center letter, dated 12 January 2005; U.S. Army Human Resources Command (USA HRC), Education Incentives and Counseling Branch letter, dated 13 October 2004; DD Form 2475 (DoD Educational LRP Annual Application), dated 13 September 2004; two PFCU Promissory Notes and Disclosure Statements, dated 1 August 2001 and 11 October 2002; and an
IRS Form 1098-E (Student Loan Interest Statement) for 2003.

CONSIDERATION OF EVIDENCE:

1.  The applicant’s military record shows that on 15 April 2004, he enlisted in the Regular Army for six years.  The Statement for Enlistment, U.S. Army Enlistment Program (Annex B), dated 15 April 2004, on file confirms the options and incentives the applicant contracted for during his enlistment processing.  The LRP is one of the incentives authorized and the applicable LRP terms are listed in paragraph 2 (Associated Options) of this form.

2.  The LRP provisions of Annex B state, in pertinent part, that the applicant understood he must disenroll from the GI Bill at the time he entered active duty and if he failed to do this he would not be eligible for the LRP.  It also indicated that the applicant understood that the government will repay a designated portion of any loan he incurred that was made, insured or guaranteed under Part B of the Higher Education Act (Guaranteed Student Loan) or any loan under Part E of such act (National Direct Student Loan) after 1 October 1975 and before he enlisted in the Army.



3.  Annex B to the applicant’s enlistment contract further indicated that the applicant’s enlistment for the LRP ensured him, provided he met and maintained the prescribed prerequisites, that the portion or amount of his student loans 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 up to a maximum of $65,000.

4.  On 15 April 2004, recruiting personnel completed Section V (Recertification) and Section VI (Remarks) of the Record of Military Processing - Armed Forces of the United States (DD Form 1966/3 and 1966/4).  These documents contained an entry confirming the applicant’s participation in the LRP.  There was no indication or entries regarding the eligibility/ineligibility of any of his student loans.

5.  The applicant and Service representative signed both the DD Form 1966/3 and Annex B to his enlistment contract on the date he entered active duty
(15 April 2004) and there is no indication in these documents that any questions or issues were raised regarding the eligibility of his student loans for repayment.

6.  The applicant's record contains a copy of DD Form 2366 (Montgomery GI Bill Act of 1984) which shows the applicant completed the Statement of Disenrollment from participating in the Montgomery GI Bill and signed the document, along with a witnessing official on 20 April 2004.

7.  On 13 October 2004, the USA HRC, Acting Chief, Education Incentives and Counseling Branch, notified the applicant that his PFCU loan, totaling $27,880.24, which was not made, insured or guaranteed under Title IV, Part B, D, or E of the Higher Education Act of 1965, did not qualify for repayment under the LRP.  The applicant was advised to apply to this Board if he believed he had not been properly counseled or that an error or injustice had occurred.

8.  Army Regulation 601-210 (Regular Army and Army Reserve Enlistment Program) prescribes eligibility criteria governing the enlistment of persons, with or without prior service (PS), into the Regular Army (RA) and the USAR.  Chapter 6, section II, contains guidance on the Guidance Counselor Processing Phase.
It states, in pertinent part, that Guidance Counselors will use the supporting automated systems and updated regulatory material applicable to MOS and available options to counsel all applicants on their enlistment options.  It further states that Guidance Counselors will counsel applicants who fail to meet specific qualifications for options for which they applied and advise them of other available options.

9.  Table 9-4 of the enlistment regulation, in effect at the time of the applicant’s enlistment, contained guidance on enlistment option Program 9C (Bonus/Army College Fund/Loan Repayment Program).  It contained specific guidance pertaining to the LRP and indicated that the government would repay a designated portion of any loan incurred that was made, insured, or guaranteed under Part B of the Higher Education Act of 1965 (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 Regular Army.

10.  Table 9-4 of the enlistment regulation further stipulated that Guidance Counselors were required to confirm they accomplished all the processing procedures by making the appropriate entries in the enlistment documents.  This included a statement regarding the applicant’s eligibility for the LRP, which included any factors that could disqualify him from receiving the LRP benefit, and ensuring the applicant’s acknowledgement of this fact was also recorded.

11.  The LRP is a Department of the Army enlistment option authorized by 
Title 10 of the United States Code, section 2171 (10 USC 2171), which provides the legal authority for the education loan repayment program for enlisted members on active duty in specified military specialties.  The law states, in pertinent part, that 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 Loans.

12.  10 USC 2171 further specifies that payment of such loans shall be made on the basis of each complete year of service performed as an enlisted member in a military specialty specified by the Army.  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.

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.  It is clear the applicant’s student loan did not meet the criteria established by law and regulation to qualify for repayment by the Army under the LRP.  The loan was not made, insured, or guaranteed under Title IV, Part B, D, or E of the Higher Education Act of 1965, as is required.  However, this is not the overriding factor in this case given the equity considerations and the resultant injustice.

2.  The Statement for Enlistment of the applicant’s enlistment contract established a contractual agreement between the applicant and the Army, and the record clearly shows the responsible recruiting officials failed to make reference to any loans ineligible for payment under the LRP, as evidenced by the absence of an entry in the remarks section of the DD Form 1966/4.

3.  The governing regulation requires Army Guidance Counselors to verify and counsel applicants on their eligibility for the options they agreed to prior to their departing for active duty.  Further, these counselors are obligated to advise applicants on any options they agreed to, but are not eligible for, and on any available alternatives.

4.  In addition, the enlistment regulation in effect at the time of the applicant’s enlistment required counselors to add entries to the enlistment contract and/or associated documents confirming this verification of option and incentive eligibility, and/or counseling on ineligibility, prior to a member departing for active duty.  In this case, counselors failed to properly document the ineligibility of the applicant's loan on the DD Forms 1966/3 and 1966/4 prepared on the day he departed for active duty.

5.  The evidence of record shows, as required by the provisions of the LRP in his Statement for Enlistment, the applicant disenrolled from the MGIB following his enlistment in the Regular Army.

6.  Similar LRP cases have been referred for an advisory opinion from the USA HRC, Chief, Education Incentives Branch.  This USA HRC official has recommended disapproval of these requests based on the loans in question not being eligible for repayment under the terms of the applicant’s enlistment contract because they were not made, insured, or guaranteed under Title IV, Part B, D, or E of the Higher Education Act of 1965 and there are no exceptions to the law that would allow authorization of payment by USA HRC.


7.  In addition, the USA HRC, Chief, Education Incentives Branch, normally recommends that, if the Board decides to grant compensation, the total amount approved for any non-qualifying loans should be paid directly to the applicant.

8.  In view of the facts of this case, it appears the applicant entered into an erroneous contract with the Army, based on the failure of recruiting personnel to follow established regulatory guidelines in connection with his enlistment processing, through no fault of his own.  Given the failure on the part of Government officials to follow their own regulations during the applicant's enlistment processing, it is appropriate to rectify the resultant injustice at this time.

9.  In doing so, the applicant's military records should be corrected to show his Statement for Enlistment was amended to include the sentence, “If a student loan is accepted by the official 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 $27,880.24 due for the PFCU loan.

BOARD VOTE:

__JTM __  __JBG_ _  __ JRM__  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 all Department of the Army records of the individual concerned be corrected by amending the applicant's Statement for Enlistment to include the sentence, “If a student loan is accepted by the official 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 (DFAS) shall remit payment to the applicant the total amount of his PFCU Education Loan, in the amount of $27,880.24, to which he is entitled as a result of this correction.  If required, the applicant will submit the appropriate evidence (promissory notes, etc.) to the Defense Finance and Accounting Service.




____JOHN T. MEIXELL______
          CHAIRPERSON




INDEX

CASE ID
AR20050001517
SUFFIX

RECON
YYYYMMDD
DATE BOARDED
20051020
TYPE OF DISCHARGE
(HD, GD, UOTHC, UD, BCD, DD, UNCHAR)
DATE OF DISCHARGE
YYYYMMDD
DISCHARGE AUTHORITY
AR . . . . .  
DISCHARGE REASON

BOARD DECISION
GRANT
REVIEW AUTHORITY
Mr. Chun
ISSUES         1.
103.0100.0000
2.

3.

4.

5.

6.