RECORD OF PROCEEDINGS


	IN THE CASE OF:	  


	BOARD DATE:	  21 February 2007
	DOCKET NUMBER:  AR20070000162 


	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. Michael L. Engle

Analyst


The following members, a quorum, were present:


Ms. Marla J. N. Troup

Chairperson

Mr. John G. Heck

Member

Mr. Donald L. Lewy

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 paid off under the Loan Repayment Program (LRP).   

2.  The applicant states, in effect, that he was promised the loans would be paid. He contends that he provided his recruiter and all guidance counselors with his promissory notes and payment stubs for all of his student loans.  He was assured that the verbiage on DA Form 3286-66, paragraph 4a and 4b meant that as long as his loans were student loans they would be repaid.
 
3.  The applicant provides a copy of his enlistment contract with associated documents and a letter from the Chief, Education Incentives Branch, U. S. Army Human Resources Command (USAHRC), dated 29 November 2006, with enclosures.

CONSIDERATION OF EVIDENCE:

1.  On 28 June 2003, the applicant enlisted in the United States Army Reserve for 8 years in the rank of private first class, pay grade E3.

2.  On 25 March 2003, the applicant enlisted in the Regular Army for 5 years in the rank of private first class, pay grade E3.  Prior to entry on active duty he had obtained three student loans.

3.  The applicant's Statement For Enlistment - United States Army Enlistment Program, shows that he enlisted in the Regular Army for United States Army Training Enlistment Program, the United States Army Incentive Enlistment Program, including a cash bonus and the United States Army LRP.   He was assured that, provided he met required prerequisites, he would receive training in military occupational specialty 18X1O (Special Forces).

4.  The applicant's Record of Military Processing - Armed Forces of the United States (DA Form 1966) does not list his student loans.   However, his Statement of Understanding, United States Army Incentive Program (DA Form 3286-66) with addendum informed him that the LRP would not repay student loans in excess of $65,000, and that he had to bring with him copies of his promissory notes when he reported for active duty.

5.  The applicant's enlistment contract does not indicate that any of his student loans do not qualify for repayment under the LRP. 

6.  By letter dated 29 November 2006, the Education Incentives Branch, USAHRC informed the applicant that his CitiAssist Corporation Loan in the total amount of $32,653.79 was not made, insured or guaranteed under Title IV Part B,D, or E of the Higher Education Act, and did not qualify for repayment under the LRP. 

7.  An electronic mail from the Education Incentives Branch, USAHRC, dated 
9 January 2007, indicates that the applicant had also submitted completed DD Forms 2475 for loans from the United States Department of Education for a Stafford Loan totaling $16,424.64 and from Bryant College for a Perkins Loan totaling $3,590.05.  Both of these loans were paid in full under the LRP.

8.  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.  

9.  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.

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, into the Regular Army and the U. S. Army Reserve.  Chapter 9 (Enlistment Programs/Options) states these programs/options are designed to merge valid Army requirements with personal desires.  

11.  Title 10, U. S. Code, section 1552, the law which provides for the Board, states, “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 the applicant enlisted for the LRP incentive up to $65,000.  He had obtained three student loans prior to his entry on active duty. 

2.  Two of the applicant's loans qualified for repayment under the LRP. There is no evidence to show and the Education Incentives Branch, USAHRC did not indicate that any of these loans were in default prior to his entering active duty.  They have been paid in full under the LRP.

3.  The applicant's CitiAsist Loan, totaling $32,653.79, 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.  However, because representatives of the United States Army failed to inform him that the subject loan did not qualify for repayment under the LRP,  he was led him to believe that all of his loans would be paid under the LRP.

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.  The Defense Finance Accounting Service will be requested to establish a debt should he not serve the required active duty.

 5.  The applicant’s military records may be corrected to show his enlistment contract 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 institution would have been paid under the LRP.





BOARD VOTE:

__MJNT_  __JGH __  __DLL __  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 the applicant's enlistment contract 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 amount of his CitiAssist Loan, in the total amount of $32,653.79, 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.





__     Marla J. N. Troup____
          CHAIRPERSON




INDEX

CASE ID
AR20070000162
SUFFIX

RECON
 
DATE BOARDED
20070221 
TYPE OF DISCHARGE
 
DATE OF DISCHARGE
 
DISCHARGE AUTHORITY
  . . . . .  
DISCHARGE REASON

BOARD DECISION
GRANT
REVIEW AUTHORITY

ISSUES         1.
112.1200
2.

3.

4.

5.

6.