RECORD OF PROCEEDINGS


      IN THE CASE OF:


      BOARD DATE:        17 October 2006
      DOCKET NUMBER:  AR20060010272


      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. Luis Almodova                 |     |Senior Analyst       |


      The following members, a quorum, were present:

|     |Mr. John T. Meixell               |     |Chairperson          |
|     |Mr. Peter B. Fisher               |     |Member               |
|     |Mr. Rowland C. Heflin             |     |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 his student loans be repaid by
the Army's Loan Repayment Program.

2.  The applicant states, in effect, that since he joined the Army to get
help with his student loan he would like the Board to consider and give
him help with repayment of his non-qualifying loan.  He wasn't aware when
he joined that it wouldn't qualify.

3.  The applicant adds that his recruiter in Cody, Wyoming, told him that
he would get help with his student loan.  When he showed his credit
agreement to the Denver MEPS (Military Entrance and Processing Station)
people, he was told there would be no problems getting help from the Loan
Repayment Program.  After filing his DD Form 2475, DOD Educational Loan
Repayment Program (LRP) Annual Application, he was informed that his loan
did not qualify for repayment.

4.  In support of his application, the applicant provides a copy of a
completed DA Form 2475; a copy of his Non-negotiable Credit Agreement,
dated 9 July 2004; and a letter addressed to him from the US Army Human
Resources Command (AHRC), Education Incentives Branch, Alexandria,
Virginia, dated 3 March 2006.

CONSIDERATION OF EVIDENCE:

1.  The applicant’s record shows that on the date of his application to
this Board, he was serving on active duty, in the rank/pay grade of
Private/E-2.

2.  The record shows the applicant took a loan from American Education
Services, on 13 August 2004, in the amount of $22,099.45 to attend Rocky
Mountain College.

3.  The applicant enlisted in the Army Reserve for 8 years, in pay grade E-
2, on 12 October 2005.

4.  The DA Form 3286, Statement for Enlistment, United States Army
Enlistment Program, US Army Delayed Enlistment Program, completed on 25
October 2005, shows the applicant enlisted for programs 9A (US Army
Training Enlistment Program) and 9C (US Army Incentive Enlistment Program),
which includes the US Army Loan Repayment Program.
5.  In conjunction with his enlistment for the US Army Loan Repayment
Program option, the applicant stated he understood he must disenroll from
the GI Bill in order to qualify for the LRP and disenrollment must be
accomplished at the time he entered active duty.  He further understood if
he failed to complete the disenrollment portion of the DD Form 2366,
Montgomery GI Bill Act of 1984 (MGIB), he would not be eligible for the LRP
and would become automatically enrolled in the GI Bill.

6.  The DA Form 3286 the applicant signed also contained an understanding,
which the applicant acknowledged, that only certain loans qualified for the
LRP.  Item 3.i through v. contained the specifics of the program.  Item 3.w
is an acknowledgement that the applicant provided his recruiter or the
guidance counselor all information required on his application for
enlistment.

7.  DD Form 1966/3, Record of Military Processing – Armed Forces of the
United States, on file in the applicant's Official Military Personnel
File (OMPF) shows, in item 30 (Data Verification by Recruiter), that the
applicant's recruiter saw the applicant's birth certificate and verified
the applicant's age and citizenship on 10 November 2005.  In addition,
the recruiter saw the applicant's Social Security Account Card and
college transcripts.  There is no indication on this form that the
recruiter saw other documents.

8.  Item 32.a. (Specific Option/Program Enlisted For), of the same DD Form
1966/3 shows the applicant enlisted for, among other options/incentives,
payment of his student loan under the LRP.

9.  DD Form 1966/4 is silent as to any information pertinent to the LRP and
any review of promissory notes and determination as to the qualification of
the loans for payment under the LRP, and any counseling that may have been
given the applicant pertinent to any loans that did not qualify.

10.  On 10 November 2005, the applicant completed and signed a second DA
Form 3286.  This form had the same understandings and acknowledgements as
the first DA Form 3286 he completed on 25 October 2005.  There are
seventeen paragraphs that relate/pertain to the LRP.  While all paragraphs
that pertain to this program are important, key among the understandings
and acknowledgements are the following:

      Paragraph 2.b. "The incentive above is the U.S. Army Loan repayment
      Program (LRP), I understand that I must disenroll from
      the GI Bill in order to qualify for this program.  Disenrollment must
      be accomplished at the time I enter on active duty.  If I fail to
      complete the disenrollment portion of the DD Form 2366, I will not be
      eligible for the LRP and will become automatically enrolled in the GI
      Bill."


      Paragraph 2.f. "Enlistment for the LRP ensures me, provided I meet and
      maintain the prescribed prerequisites, that the portion or amount of
      loan that may be repaid is 33 1/3 percent or $1,500, whichever is
      greater, of the unpaid principal balance for each year of service
      completed."


      Paragraph 2.g. "Repayment will be made only after each successful year
      of active duty that I perform commencing on the date of my enlistment
      in the Regular Army."


      Paragraph 2.o. "I understand that interest (even interest re-
      capitalized into principal) will not be repaid.  I also understand
      that I will not be reimbursed for payments I make or have already made
      to my lenders."


      Paragraph 2.r. "I understand that under the Army's Student Loan
      Repayment Program, the Army will not repay student loans in excess of
      $65,000 regardless of the amount of my student loans.    I further
      understand that I am required to make all interest payments of my
      student loan during my enlistment.  In addition, I understand that I
      must bring copies of ALL my student loan promissory notes when I
      report to the MEPS active duty ship date."

11.  The applicant completed a DD Form 2366 disenrolling from the MGIB on
16 November 2005.  Item 4, of this form, has the following statement in
bold letters, "I understand that I am enlisting for the loan repayment
plan, therefore, I am disenrolling from the Montgomery GI Bill."

12.  The applicant completed and submitted DA Form 2475 to the Education
Incentives Branch on 12 January 2006.  The Education Incentives Branch in
turn submitted the form to American Education Services.  The DA Form 2475
was completed and returned to the Education Incentives Branch, AHRC, on
27 January 2006.
13.  On 3 March 2006, the applicant was notified by the Education
Incentives Branch, AHRC, that it had been determined that the loan provided
him by American Education Services, on 13 August 2004, with an outstanding
balance of $22, 892.21, did not qualify for repayment under the LRP.  He
was advised that if he thought he had not been properly counseled or an
error or injustice had occurred, he could apply to this Board for relief.

14.  AR 601-210, Chapter 6, MEPS Processing Phase, provides policy and
guidance for those functions that are administered at MEPS by MEPCOM
(Military Entrance Processing Command) personnel and guidance counselors
to confirm that they accomplished all procedures in the enlistment process
by making the appropriate entries in the DD Form 1966 series and DA Form
3286.  Paragraph 6-5.g. states that the guidance counselor "counsels
applicants who failed to meet specific qualifications for options for which
they applied; advises them of other available options."  This includes a
statement regarding the applicant’s eligibility for the LRP, which is to
include any factors that may disqualify him from receiving the LRP benefit,
and ensuring that the applicant’s acknowledgement of this fact is also
recorded in the remarks section of the appropriate form of the DD Form 1966
series.

15.  United States Army Recruiting Command (USAREC) Regulation 621-1,
paragraph 4-4a., which supplements Army Regulation (AR) 601-210, states
that "Applicants are no longer authorized to ship without documents or
verification of eligible loans."

16.  The procedures, outlined in paragraphs 14 and 15 above, are also
contained in USAREC Regulation 601-96 (Guidance Counselor Procedures),
Appendix N, paragraph N-3d(3).

17.  Forms included in the DD Form 1966 series were reviewed for any
indication or remarks that any of the applicant's loans was not eligible
for repayment under the LRP.  None was found.

18.  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.  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 he pays off a student
loan.  The Government will only pay the lending institution.

19.  Title 10, US 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 shows the applicant was extended a loan in the amount of
$22,099.45, by American Education Services.

2.  The applicant enlisted in the Regular Army for 3 years and 24 weeks
for, among other options, payment of his student loan under the LRP.

3.  The evidence shows the applicant was appropriately guided through the
signing or initialing of the required forms acknowledging the Army's and
his responsibilities with regard to his enlistment
options/incentives/obligations.

4.  The applicant completed and signed a DD Form 2366 to disenroll himself
from participation in the MGIB, as required by program rules for the
enlistment option/incentive he chose.

5.  The applicant authenticated DA Form 3286 that states, "I understand
that I must bring copies of all my student loan promissory notes when I
report to the MEPS for active duty ship date."
6.  In his application to this Board, the applicant states that upon his
arrival at the MEPS he was told by MEPS representatives there would be no
problem getting help from the LRP (in getting his loan repaid).  It is
reasonable to believe he had his promissory notes in hand when he arrived
to be processed in light of the statement allegedly made to the applicant.

7.  There is no evidence to show that MEPS representative took any action
to advise him of other available options, as required by AR 601-210 if they
recognized that his loan was not qualified for repayment under LRP rules.

8.  Review of the evidence and the promissory note that the applicant
apparently provided the guidance counselor shows the loans that were
extended to the applicant were private loans.  Under normal circumstances,
these types of loans are not qualifying loans under the SLRP, since they do
not meet the criteria of the program and the law; however, this is not the
overriding factor in this case, given the equity considerations and the
resultant injustice to the applicant.

9.  AR 601-210 requires that the guidance counselor include a statement
regarding an applicant’s eligibility for the LRP, which is to include any
factors that may disqualify him from receiving the LRP benefit, and
ensures that an applicant acknowledges this fact in the remarks section of
the appropriate form of the DD Form 1966-series.  A review of the DA Form
1966-series failed to reveal any entries pertinent to this required
counseling.

10.  USAREC Regulation 621-1, paragraphs 4-4a, and USAREC Regulation 601-
96, Appendix N, paragraph N-3d(3), state that applicants are not
authorized to ship without documents or verification of eligible loans.
It is plainly evident that the applicant was shipped to basic combat
training without his verification.

11.  The applicant submitted the required DD Form 2475 seeking payment of
the loans that had been extended through the American Education Service.
The American Education Service completed its portion of the DD Form 2475 on
27 January 2006.  The form was annotated to show the original amount of the
loan was $22,099.45 and the outstanding balance was $22,892.21.  The DD
Form 2475 was, in turn, submitted to the Education Incentives Branch for
payment.  The Education Incentives Branch, in turn, notified the applicant
that his loan did not qualify for repayment under the LRP.
12.  The evidence shows that the applicant entered into an erroneous
contract with the Army, through no fault of his own, based on the failure
of the guidance counselor to strictly follow established regulatory
guidelines and procedures in connection with his recruitment and enlistment
processing.  Given the failure by the guidance counselor to follow clearly
established policies and procedures, the Board concludes that it would be
appropriate to rectify the resultant injustice to the applicant at this
time.  The Board finds that it would be equitable and in the interest of
justice to provide the applicant the LRP benefits committed to in his
enlistment contract at the time of his enlistment.

13.  Broad discretion is available to this Board under Title 10, US Code,
Section 1552, which includes the authority to amend the applicant’s DA Form
3286 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 all student loans accepted actually are
eligible under the Higher Education Act of 1965, and such failure results
in nonpayment of the loan by the LRP, the Army Board for Correction of
Military Records may pay the loan, at its sole discretion, in accordance
with Title 10, US Code, section 1552.”  This amendment of the DA Form 3286
allows the Board to invoke that provision and pay the applicant or lending
institutions, on behalf of the applicant, the amount that would have been
paid towards satisfaction of outstanding student loan(s), if they had been
properly verified at the time of his enlistment.

14.  In view of the foregoing, the applicant’s records should be corrected
as recommended below.

BOARD VOTE:

___J____  ___PF___  __RCH__  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 all
Department of the Army records of the individual concerned be corrected by:

      a.  amending the DA Form 3286 to include the statement,  “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 all student loans
accepted actually are eligible under the Higher Education Act of 1965, and
such failure results in nonpayment of the loan by the LRP, the Army Board
for Correction of Military Records may pay the loan, at its sole
discretion, in accordance with Title 10, US Code, section 1552”; and


      b.  directing that in accordance with Title 10, US Code, section 1552,
the Defense Finance and Accounting Service make payment to the applicant,
for the total amount of loans not covered under the Student Loan Repayment
Program, in the amount of $22,099.45, to which he is entitled as a result
of this correction and advise him if he does not serve the required active
duty, a debt will be established.




                                  ___    John T. Meixell_________
                                            CHAIRPERSON

                                    INDEX

|CASE ID                 |AR20060010272                           |
|SUFFIX                  |                                        |
|RECON                   |                                        |
|DATE BOARDED            |20061017                                |
|TYPE OF DISCHARGE       |                                        |
|DATE OF DISCHARGE       |                                        |
|DISCHARGE AUTHORITY     |                                        |
|DISCHARGE REASON        |                                        |
|BOARD DECISION          |GRANT                                   |
|REVIEW AUTHORITY        |                                        |
|ISSUES         1.  23   |103.0000                                |
|2.   1018               |103.0100                                |
|3.                      |                                        |
|4.                      |                                        |
|5.                      |                                        |
|6.                      |                                        |


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