IN THE CASE OF:	  

		BOARD DATE:	       18 February 2009

		DOCKET NUMBER:  AR20080020000 


THE BOARD CONSIDERED THE FOLLOWING EVIDENCE:

1.  Application for correction of military records (with supporting documents provided, if any).

2.  Military Personnel Records and advisory opinions (if any).


THE APPLICANT'S REQUEST, STATEMENT, AND EVIDENCE:

1.  The applicant requests, in effect, payment of his college loan under the terms of the Student Loan Repayment Program (SLRP).

2.  The applicant states, in effect, he reenlisted in the U.S. Army Reserve (USAR) on 11 (sic) November 2005 under the SLRP and is currently on active duty fulfilling his military service obligation.  He adds that the Army failed to pay his student loan, the finance company came after him for payment, and he had no choice but to personally pay the finance company $4,059.12, which included interest on the loan.

	a.  The applicant states his student loan should have been paid by his unit as part of his USAR enlistment contract, he was told his unit would start making payments, and that it was not necessary for him to make any more payments.  He also states he deployed overseas, his unit failed to make the loan payments, the loan went into default, and he had to make up all of the payments at that time to Michigan Guaranty Agency who was the loan holder.  He adds that Nelnet was the original holder of the loan note.

	b.  The applicant states that his unit administrator advised him that, based on the fact that the loan went into default and the applicant had paid off the loan, he would have to apply to the Army Board for Correction of Military Records for reimbursement of the personal funds he used to repay the student loan.

3.  The applicant provides copies of two DD Forms 214 (Certificates of Release or Discharge from Active Duty) with effective dates of 26 December 2004 and 4 February 2006; DD Form 4 series (Enlistment/Reenlistment Document - Armed Forces of the United States), dated 2 November 2005; DA Form 3540 (Certificate and Acknowledgment of U.S. Army Reserve Service Requirements and Methods of Fulfillment), dated 2 November 2005; DA Form 5261-R (Student Loan Repayment Program Addendum), dated 2 November 2005; Federal Family Education Loan Program (FFELP), Federal Stafford Loan Master Promissory Note, dated 2 August 2000; Notice of Loan Guarantee and Disclosure Statement, dated 8 August 2000; two DD Forms 2475 (DOD Educational Loan Repayment Program (LRP) Annual Applications), dated 22 October 2007 and 28 April 2008; and State of Michigan, Department of Treasury, Lansing, Michigan, letter, dated 7 March 2008 with Account Activity Statement, dated 25 February 2008.

CONSIDERATION OF EVIDENCE:

1.  The applicant’s military personnel records show that he enlisted in the Army National Guard of the United States (ARNGUS) and Army National Guard of Michigan (MIARNG) on 14 May 1987.  Upon completion of basic combat and advanced individual training, he was awarded military occupational specialty (MOS) 11B (Infantryman).  The applicant was honorably discharged from the ARNGUS and MIARNG on 8 June 1989 for enlistment in the U.S. Air Force.  At the time he had completed 2 years and 25 days of net service this period.

2.  The applicant’s military personnel records show he entered active duty in the U.S. Air Force on 9 June 1989 and was honorably discharged on 9 September 
1992 based on conditions that interfere with military service.  At the time he had completed 3 years, 3 months, and 1 day of net active service this period; 3 months and 16 days of total prior active service; and 3 years, 9 months, and 10 days of total prior inactive service.

3.  The applicant’s military personnel records show he enlisted in the USAR on 6 November 2002.  Upon completion of advanced individual training, he was awarded MOS 88M (Motor Transport Operator).

4.  In support of his application, the applicant provides the following documents:

	a.  DD Form 214 that shows he was ordered to active duty in support of Operation Enduring Freedom on 15 August 2003, honorably released from active duty on 26 December 2004, and transferred to the 401st Transportation Company, Detachment 1, Battle Creek, Michigan.  At the time he had completed 1 year, 4 months, and 12 days of net active service this period;


	b.  DD Form 214 that shows he was ordered to active duty in support of Operation Iraqi Freedom on 28 December 2004.  Item 18 (Remarks), in pertinent part, shows he served in Kuwait and Iraq from 15 February to 10 December 2005.  This document also shows that the applicant was honorably released from active duty on 4 February 2006 and transferred to the 892nd Transportation Company (Medium Truck, Cargo).  At the time he had completed 1 year, 1 month, and 7 days of net active service this period; 6 years, 8 months, and 8 days of total prior active service; and 9 months and 10 days of total prior inactive service;

	c.  DD Form 4, dated 2 November 2005, that shows he reenlisted in the USAR troop program unit for a period of 6 years on 2 November 2005;

	d.  DA Form 3540, dated 2 November 2005, that shows, in pertinent part, the applicant’s reenlistment contract included an Addendum (DA Form 5261-R) for the SLRP;

	e.  DA Form 5261-R, dated 2 November 2005, which is an addendum to the applicant’s reenlistment contract that explains obligation and participation requirements for entitlement under the SLRP and ensures the applicant’s agreement to these conditions is a matter of record.  This document shows, in pertinent part, the applicant acknowledged he was authorized a maximum of $10,000 in loan repayments; the amount to be repaid each year will not exceed 15 percent of the original balance (a maximum of $1,500) or $500, whichever is greater, plus the accrued interest; the repayment of student loans by the Government is not automatic under the terms of the addendum; the applicant was responsible for initiating a DD Form 2475 to request loan repayment during each year that he met the specified requirements and for submitting the form to personnel officials in his command; and that the terms of the addendum remain in force as long as the applicant continued to participate satisfactorily under the contractual agreement as a member of the Selected Reserve.  This document also shows that the applicant and Reenlistment Noncommissioned Officer placed their signatures on the addendum;

	f.  FFELP, Federal Stafford Loan Master Promissory Note, dated 2 August 
2000, and Notice of Loan Guarantee and Disclosure Statement, dated 8 August 
2000, that show, in pertinent part, the applicant contracted with the Michigan Guaranty Agency, Old Kent Bank, Indianapolis, Indiana, for a subsidized Federal Stafford loan in the amount of $3,500;

	g.  DD Form 2475, dated 22 October 2007, that shows the applicant initiated the request at his personnel office on 22 October 2007, signed the document on 22 October 2007, identified Michigan Guaranty Agency as the loan holder, and an original loan amount of $3,500.00; however, the document does not contain any information in item 4 (Lender Verification);

	h.  DD Form 2475, dated 28 April 2008, that shows the applicant initiated the request at his personnel office on 9 April 2008, signed the document on 17 April 2008, and identified Nelnet Corporation, Omaha, Nebraska, as the loan holder, but did not indicate the original loan amount.  However, this document also shows that the typed entries on the form pertaining to the loan holder have been lined-through and information pertaining to Michigan Guaranty Agency, Indianapolis, Indiana, is handwritten on the form.  Item 4, in pertinent part, shows the original loan amount of $3,676.75, loan interest of $317.37, that loan fees were previously waived, and the loan was not in default.  Item 5 (Remarks) states, "[l]oan was purchased as a default account is now paid in full.  Any payment sent will not be applied and will be returned to the sender"; and

	i.  State of Michigan, Department of Treasury, Lansing, Michigan, letter, dated 7 March 2008, with Account Activity Statement, dated 25 February 2008, that show, in pertinent part, the applicant’s final payment was credited to his defaulted student loan account as of 12 February 2007; the total loan principal paid was $3,676.75; other charges paid totaled $65.00; total interest paid was $317.37; and the total amount paid was $4,059.12.

5.  The SLRP provides for the repayment by the Government of a designated portion of any outstanding student loan(s) secured after 1 October 1975.  The loan amount to be repaid is 15 percent of the original balance of the loan plus accrued interest not paid by the Department of Education, or $500.00 plus the accrued interest not paid by the Department of Education, whichever is greater.  Payments will be made for each year of satisfactory service in the Selected Reserve.  The maximum amount of loans against which the 15 percent is computed will not exceed $10,000.  This equates to a maximum annual repayment of $1,500 plus interest.  If the amount set for repayment is less than $500.00, then $500.00 becomes the calculated amount for repayment that year.

6.  To be eligible for the SLRP incentive, a person must contractually obligate himself or herself to serve satisfactorily, must serve in a reserve unit for a full term of the contractual agreement and must further obligate himself or herself to continue to serve in the same component and the same MOS unless excused for the convenience of the Government.  Entitlement to the SLRP will stop if the Soldier is separated from the Selected Reserve.  Each complete satisfactory year of service performed under this SLRP agreement establishes an anniversary date.  Any qualifying loan which is at least a year old may then be paid in accordance with the terms of this educational enlistment incentive.

7.  Army Regulation 135-7 (Incentive Programs), in pertinent part, restricts the SLRP to those Reservists who either enlist or reenlist for a skill or unit approved by the Department of the Army and disseminated to the field by a list of MOSs and units, which is updated every 6 months.  This educational incentive may only be elected at the time of enlistment or reenlistment.  This incentive pays a limited sum of money to a lending institution on the anniversary date of an enlistment or reenlistment.  These payments continue on a yearly basis unless the Soldier loses eligibility by being separated from his or her unit.

8.  The Government will not make any payments to the Soldier or reimburse a Soldier is he or she pays off a student loan.  The Government will only pay the lending institution.

DISCUSSION AND CONCLUSIONS:

1.  The applicant contends, in effect, that he should be compensated for his college loan because Army officials failed to take necessary action to ensure payment of his student loan, the loan went into default, and he had to remit payments that totaled $4,059.12.

2.  It appears the applicant incurred the qualifying Stafford Student Loan in August 2000.  The evidence of record shows the applicant reenlisted on
2 November 2005 while serving in Iraq and that his reenlistment contract included, in pertinent part, the SLRP.  The evidence of record also shows the applicant was advised and he acknowledged with his signature that the repayment of student loans by the Government is not automatic under the terms of the addendum to his reenlistment contract, the applicant was responsible for initiating a DD Form 2475 to request loan repayment during each year that he met the specified requirements, and for submitting the form to personnel officials in his command.

3.  The evidence of record shows approximately five weeks after the applicant reenlisted on 2 November 2005, he departed Iraq and returned to his unit in the continental United States.  However, there is no evidence the applicant submitted a DD Form 2475 upon completion of his first year of service (i.e., on 1 November 
2006) to request loan repayment.

4.  The evidence of record shows the applicant submitted a DD Form 2475 to his personnel office on 22 October 2007, nearly two years after the date of his reenlistment.  However, the evidence of record also shows the applicant’s student loan had been paid in full as of 12 February 2007.

5.  The evidence of record shows that 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.

6.  The evidence of record shows that the Army does not assume an individual’s loan under the SLRP (i.e., the individual remains responsible for payment of the loan).  The evidence of record also shows that repayment of a portion of the qualifying loan will be made after each complete satisfactory year of service performed under the SLRP agreement by the individual.  However, requests for deferment or forbearance of a loan are not within the purview of the U.S. Army and are the sole responsibility of the borrower; in this case, the applicant.  Therefore, notwithstanding the transfer of the servicing responsibility of the loan to Michigan Guaranty Agency and the $4,059.12 remitted by the applicant to pay his loan in full on 12 February 2007, the applicant is not entitled to compensation for the loan payments he made in this case.

7.  Based on the available evidence, it appears the applicant failed in his personal responsibility to take action to request deferment or forbearance of his loan, as indicated by the total loan amount of $4,059.12.  In addition, the applicant has submitted neither probative evidence nor a convincing argument in support of his claim for the payment of the principal, interest, and fees on his student loan.  Therefore, in view of the foregoing, there is no basis for granting the applicant's request.

8.  In order to justify correction of a military record the applicant must show to the satisfaction of the Board, or it must otherwise satisfactorily appear, that the record is in error or unjust.  The applicant has failed to submit evidence that would satisfy that requirement.

BOARD VOTE:

________  ________  ________  GRANT FULL RELIEF 

________  ________  ________  GRANT PARTIAL RELIEF 

________  ________  ________  GRANT FORMAL HEARING

____X____  ___X_____  ____X_  DENY APPLICATION


BOARD DETERMINATION/RECOMMENDATION:

The evidence presented does not demonstrate the existence of a probable error or injustice.  Therefore, the Board determined that the overall merits of this case are insufficient as a basis for correction of the records of the individual concerned.




      ___________X______________
                 CHAIRPERSON
      
I certify that herein is recorded the true and complete record of the proceedings of the Army Board for Correction of Military Records in this case.

ABCMR Record of Proceedings (cont)                                         AR20080020000



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ABCMR Record of Proceedings (cont)                                         AR20080020000



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