RECORD OF PROCEEDINGS


      IN THE CASE OF:


      BOARD DATE:                 07 MARCH 2006
      DOCKET NUMBER:         AR20050015574


      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. Jessie B. Strickland          |     |Analyst              |


      The following members, a quorum, were present:

|     |Mr. James Anderholm               |     |Chairperson          |
|     |Mr. Thomas Reichler               |     |Member               |
|     |Mr. Scott Faught                  |     |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 he be provided Loan Repayment
Program (LRP) benefits under the terms of his enlistment contract.

2.  The applicant states, in effect, that he was not properly counseled
regarding the payment of his student loans.  He goes on to state that his
recruiter advised and assured him that his loans qualified for payment
under the LRP after he insisted that he would not ship if his loans did not
qualify.  He goes on to state that when he arrived at inprocessing, the
education advisor informed him after reviewing all of his promissory notes,
that as long as his loans were not in default, the Army would pay them.  He
further states that the LRP option was the reason he enlisted in the Army
because he was a single parent and the LRP relieved his family of the
financial burden of repaying his college loans.  However, when he applied
to have his loans repaid, he was informed that his TERI loan did not
qualify for repayment.

3.  The applicant provides a copy of his promissory note and the denial of
payment by the Department.

CONSIDERATION OF EVIDENCE:

1.  He enlisted in the United States Army Reserve (USAR) under the Delayed
Entry Program in Jacksonville, Florida on 27 August 2001, in the pay grade
of   E-4, for a period of 4 years, training as a paralegal specialist, an
$8,000 enlistment bonus and participation in the Loan Repayment Program
(LRP).  His scheduled entry date for the Regular Army was 3 January 2002.

2.  A DA Form 3286-59, Annex A and a DA Form 3286-66, Annex D, confirms the
applicant’s enlistment option and included incentives.  The LRP is one of
the incentives authorized in these Annexes and the applicable LRP terms are
listed in paragraph 4 of Annex D.

3.  The LRP provisions of Annex D 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 would 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
Regular Army.  The applicant disenrolled from the GI Bill at the time of
his enlistment in the Regular Army.
4.  Further, Annex D 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 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 not to exceed $65,000.00.  The
applicant and the service representative signed this document on the date
he entered active duty, 4 January 2002, and there is no indication in this
Annex that any question was raised in regard to his eligibility for the LRP
or the eligibility of his loans to qualify for repayment.

5.  He enlisted in the Regular Army on 4 January 2002.  He successfully
completed his training and was transferred to Fort Hood, Texas.

6.  On 7 March 2003, the Chief, Education Incentives and Counseling Branch,
Human Resources Command – Alexandria (HRC-ALEX) dispatched a letter to the
applicant informing him that his TERI Loan did not qualify for repayment
under the LRP because it was not made, insured or guaranteed under Title
IV, Part B, D, or E of the Higher Education Act.  The applicant was advised
to apply to this Board.

7.  He was promoted to the pay grade of E-5 on 1 July 2004 and on 9 March
2005, he reenlisted for a period of 3 years and assignment to Fort Jackson,
South Carolina.

8.  On 17 November 2005, the Chief, Education Incentives Branch, HRC-ALEX
provided an advisory opinion to the Board which explains that while
$29,441.00 of his Stafford Loans were paid and $5,000 was paid to
Pennsylvania State University, the remaining TERI Loan of $6,860.64 did not
qualify for payment.  Inasmuch as the law does not provide for exceptions,
his non-qualifying TERI Loan could not be paid.  Officials recommended that
if the Board approved his request that payment be made directly to the
applicant.

9.  The advisory opinion was provided to the applicant for comment and he
responded to the effect that he did not dispute that his loan did not
qualify for repayment.  What he disputed is that he was led to believe at
the time that they did qualify and that based on the guidance he received
at the time by Army officials, he made his decision to enlist in order to
have his loans paid off.  Accordingly, his loan should be paid in order to
relieve him of the financial burden.

10.  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 9 (Enlistment Programs/Options) indicates that these
programs/options are designed to merge valid Army requirements with
personal desires Table 9-4 contains guidance on enlistment option program
9C (Bonus/Army College Fund/Loan Repayment Program).  It contains specific
guidance pertaining to the LRP and indicates that 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 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.

11.  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.

12.  The regulation further states that Guidance Counselors are
specifically required to confirm they accomplished all the processing
procedures by making the appropriate entries on a Record of Military
Processing – Armed Forces of the United States (DD Form 1966) and DA Form
3286-66.  This includes a statement advising members of any loan he or she
has that is not eligible for repayment and ensuring the applicant’s
acknowledgement of this fact is also recorded in the remarks section of the
DD Form 1966.  Paragraph 4-4 of United States Army Recruiting Command
(USAREC) Regulation 621-1 which supplements Army Regulation 601-210 states
that applicants are no longer required/authorized to ship without documents
or verification of eligible loans.

13.  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), Auxillary 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.  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.

14.  Title 10, U.S. Code, 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’s
service in the Army, Navy, Air Force, Marine Corps or Coast Guard, as the
case may be.”

DISCUSSION AND CONCLUSIONS:

1.  The Board concedes that the applicant’s loan does not meet the criteria
established by law; however, it finds this is not the overriding factor in
this case given the equity considerations and the resultant injustice.

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

3.  Although it is clear that Annex D specified the types of loans for
which LRP benefits were authorized, there is absolutely no indication that
the applicant was ever advised of these specific provisions of the LRP or
of the specific criteria required for a loan to qualify for repayment under
the law governing the LRP.

4.  By regulation, Army Guidance Counselors are required to verify that a
member enlisting for the LRP has qualifying loans and to advise those
members if any loan is not eligible for repayment.  Further, these service
representatives must confirm these actions were accomplished by making the
appropriate entries in the enlistment contract or associated documents.

5.  Notwithstanding the fact that Annex D outlined the legal criteria for
repayment under the LRP, the applicant’s enlistment contract and associated
documents contain no entries verifying that he was ever properly counseled
in regard to the legal loan repayment restrictions.

6.  Further, the record gives no indication that an Army Guidance Counselor
ever verified that the applicant’s loans did or did not qualify for
repayment under the LRP.  In addition, there is no suggestion that this
verification was ever made a part of the record with the required entries
being made in the enlistment contract prior to the applicant entering
active duty.  This was in direct violation of USAREC Regulation 621-1,
which indicates the Army guidance counselor did not verify whether all
loans qualified for repayment.

7.  Thus, contrary to the advisory opinion from the HRC, the Board finds
that the applicant was improperly counseled in regard to LRP benefits and
it concludes that it would be appropriate to rectify this injustice at this
time.  Therefore, in the interest of justice and equity, the Board
concludes that it would be appropriate to provide the applicant the LRP
benefits outlined in his enlistment contract.

8.  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 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 institution would have been paid for his
loan obtained on 15 September 1997.

BOARD VOTE:

___JA___  ___TR __  ___SF  __  GRANT FULL RELIEF

________  ________  ________  GRANT PARTIAL RELIEF

________  ________  ________  GRANT FORMAL HEARING

________  ________  ________  DENY APPLICATION








BOARD DETERMINATION/RECOMMENDATION:

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 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 above correction the Defense Finance and
Accounting Service (DFAS) shall remit payment to the applicant of the total
amount of the loans obtained from First Union National Bank on 15 September
1997 for his TERI loan, in the amount of $6,860.64.  If required, the
applicant will submit the appropriate evidence (promissory notes, etc.) to
the Defense Finance and Accounting Service.




                                  _____James Anderholm______
                                            CHAIRPERSON



                                    INDEX

|CASE ID                 |AR20050015574                           |
|SUFFIX                  |                                        |
|RECON                   |                                        |
|DATE BOARDED            |20060307                                |
|TYPE OF DISCHARGE       |N/A AC Soldier on AD                    |
|DATE OF DISCHARGE       |N/A AC Soldier on AD                    |
|DISCHARGE AUTHORITY     |N/A AC Soldier on AD                    |
|DISCHARGE REASON        |N/A AC Soldier on AD                    |
|BOARD DECISION          |(GRANT)                                 |
|REVIEW AUTHORITY        |AR 15-185                               |
|ISSUES                  |297/LRP                                 |
|1.128.1400              |                                        |
|2.                      |                                        |
|3.                      |                                        |
|4.                      |                                        |
|5.                      |                                        |
|6.                      |                                        |


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