RECORD OF PROCEEDINGS


	IN THE CASE OF:	  


	BOARD DATE:	  17 May 2007
	DOCKET NUMBER:  AR20070005080 


	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. Gerard W. Schwartz

Acting Director

Mrs. Phyllis M. Perkins

Analyst


The following members, a quorum, were present:


Mr. Eric N. Andersen

Chairperson

Mr. Antonio Uribe

Member

Mr. Rodney E. Barber

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 repayment of her student loans. 

2.  The applicant states that when she enlisted in the Army she was counseled at the Military Entrance Processing Station (MEPS) and was under the impression that her student loans would be paid in full.  The applicant further states that when she arrived at her advance individual training (AIT) she processed and turned in her DD Form 2475 (DOD Educational Loan Repayment Program (LRP) Annual Application) to the Education Incentives Branch.  The applicant states she received a letter from the Education Incentives Branch informing her that the Signature Student Loan in the amount of $3,969.68 was not eligible for repayment. 

3.  The applicant provides a copy of a self-authored letter; a USAREC Form 1232 (Loan Repayment Program Inprocessing Counseling); a letter from United States Army Human Resources Command (Alexandria, Virginia), dated 10 April 2006, DD Form 2475; and a Signature Student Loan application in support of this application.

CONSIDERATION OF EVIDENCE:

1.  The applicant's military records show that she enlisted in the United States Army Reserve for a period of eight years.  A Statement for Enlistment prepared during the applicant's enlistment processing confirms the option and incentives she contracted during her enlistment processing.  The LRP, Option 9C, is one of the incentives authorized.  The applicable LRP terms are listed in paragraph 3 of this form.   

2.  USAREC Form 1232, dated 8 June 2005, identifies the following loans as those eligible for repayment by the US Army:  "signature Sallie Mae $4,127.96 and consolidated Southwest Student Service Corp $25,660.75."

3.  The LRP provisions in the Statement of Enlistment state, in pertinent part, that the applicant understood she must disenroll from the GI Bill at the time she entered active duty and if she failed to do this she 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 she 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 she enlisted in the Army.  

4.  DD Form 2475, dated 14 February 2006, shows that the applicant applied for repayment of her signature loan for the outstanding amount of $3969.68.

5.  On 10 April 2006, the United States Army Human Resources Command informed the applicant that based on information received from Sallie Mae Servicing Corporation, it was determined that her Signature Student Loan in the amount of $3,969.68 was not made, insured, or guaranteed, and therefore was ineligible for repayment. 

6.  Records show that the applicant's total qualifying unpaid principal was $24,655.40, that she was paid $8,218.46 on 13 July 2006 and that the second and third year payments will be authorized in June 2007 and June 2008.

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.  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.  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.  

10.  10 USC 2171 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 Loan.  It 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.

11.  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 of Enlistment of the applicant’s enlistment contract established a contractual agreement between the applicant and the Army.  In addition, 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.  In this case, the statement provided by the applicant's recruiter confirms that a guidance counselor verified that all of the applicant's student loans qualified for repayment under the LRP up to a maximum allowable amount of $65,000.00 on the date the applicant enlisted.  

3.  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 this enlistment processing, through no fault of his own.  Given the failure on the part of Government officials to follow its own regulations during the applicant's enlistment processing, it is appropriate to rectify the resultant injustice at this time. 

4.  In doing so, the applicant's military records should be corrected to show her Statement of 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 $3,969.68 due for the Signature loan

BOARD VOTE:

_ENA___  _AU___  _REB_____  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 of 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.  Further, the Defense Finance and Accounting Service (DFAS) shall remit payment in the amount of $3,969.68 to the applicant as a result of this correction at the appropriate time and manner.  If required, the applicant will submit the appropriate evidence (promissory notes, etc.) to the Defense Finance and Accounting Service.


_Eric N. Andersen___
          CHAIRPERSON




INDEX

CASE ID
AR
SUFFIX

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

BOARD DECISION
(NC, GRANT , DENY, GRANT PLUS)
REVIEW AUTHORITY

ISSUES         1.

2.

3.

4.

5.

6.