IN THE CASE OF:	  

		BOARD DATE:	       24 FEBRUARY 2009

		DOCKET NUMBER:  AR20090000972 


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, that the Army repay student loans under the Student Loan Repayment Program (SLRP).

2.  In his application, the applicant states, in effect, that his initial enlistment contract included the SLRP and that he never received any benefits from this program.  He contends that he enlisted for six years active reserve with two years inactive service and that he actually completed 7 years and 20 months of enlisted service prior to being commissioned as an officer.  He states that he has been trying to correct this error for a long time.  He points out that when he enlisted the recruiter told him that the loans were frozen due to his enlistment and that he did not need to pay them, then the recruiter explained that after completion of his first year of service the U.S. Army Reserve (USAR) would start to make payments on his student loans annually for up to six years.  

3.  The applicant states that after his first year of service he completed the proper paperwork to start the repayment of his student loans and that after the paperwork was processed he was informed that he was not eligible for the program because they were in default.  He claims that there was an error in his graduation date and that he should not have been required to start paying on his student loans until July 1989 which was one month after the USAR should have started making payments on his student loans.  He indicates that the first student loan did not go into default until March 1990 and that the remaining loans were in default in December 1991.  He further states that he transferred from the USAR 
to the Pennsylvania Army National Guard in 1993 due to unit closure and that it was his understanding that the National Guard inherited responsibility for his initial enlistment contract.    

4.  In a letter, dated 17 January 2009, the applicant states, in effect, that he has tried to exhaust all administrative remedies available to him to correct this situation.  Since receiving the 29 January 2008 letter from the Army Board for Correction of Military Records (failure to exhaust administrative remedies), he indicates that a payment of $5,016.00 was made by the USAR on his student loans and that the Army National Guard denied repayment of the SLRP in November and December 2008.  He further states that his initial loans totaled $10,982.00, which is $982.00 over the $10,000.00 contracted amount to be repaid.  Because of the failure to meet the entitlements of the SLRP starting in June 1989 the total amount owed has increased significantly from interest and penalties.  He states that in addition to the significant increase from interest and penalties he has also had his wages garnished and tax refunds offset totaling over $8,000.00.  He wants to have the interest and penalties either paid in addition to the $10,000.00 or forgiven by the Department of Education.  He would also like to have the garnished wages and tax offsets refunded minus the amount that he would have had to pay if the SLRP would have been administered correctly.   

5.  The applicant provides a memorandum, dated 3 May 1993, from the Incentive Manager of The Adjutant General’s Office, Annville, Pennsylvania; a diploma; college transcripts; a letter, dated 28 March 2007, from the Business Office at Waynesburg College confirming his graduation dated in December 1989; promissory notes; his 1988 enlistment contract; a DD Form 214 (Certificate of Release or Discharge from Active Duty) for the period ending 30 August 1989; and documentation of his loan accounts from American Education Services which show dates of default status.

CONSIDERATION OF EVIDENCE:

1.  Title 10, U.S. Code, section 1552(b), provides that applications for correction of military records must be filed within 3 years after discovery of the alleged error or injustice.  This provision of law also allows the Army Board for Correction of Military Records (ABCMR) to excuse an applicant’s failure to timely file within the 3-year statute of limitations if the ABCMR determines it would be in the interest of justice to do so.  While it appears the applicant did not file within the time frame provided in the statute of limitations, the ABCMR has elected to conduct a substantive review of this case and, only to the extent relief, if any, is granted, 
has determined it is in the interest of justice to excuse the applicant’s failure to timely file.  In all other respects, there are insufficient bases to waive the statute of limitations for timely filing.

2.  The applicant enlisted in the USAR on 24 June 1988 for a period of 8 years.  
His DA Form 5261-4-R (Student Loan Repayment Program Addendum) shows he enlisted for the SLRP.  On this form, he acknowledged that under the SLRP the government would repay a designated portion of any outstanding loan(s) he secured since 1 October 1975 provided the loan was not in default.  Such loan(s) must have been made, insured or guaranteed under Part B of the Higher Education Act of 1965 (Guaranteed Student Loans/Federally Insured Student Loans), or any loan made under Part E of such act (National Direct Student Loans).  This form also states that the amount of the loan(s) (not to exceed $10,000 when totaled) that may be repaid in his case was 15% (a maximum of $1,500) or $500 whichever is greater, plus interest.  This will be paid for each year of satisfactory service performed during this contractual commitment and after the loan or loans were made.  However, the maximum number of payments made on the anniversary date of this agreement will be six (6).  Repayment of any such loan(s) will be made after each complete year of satisfactory service that he performs beginning with the contractual commitment.  

3.  When the applicant's USAR unit was deactivated he enlisted in the Army National Guard on 6 February 1993. 

4.  A memorandum, dated 3 May 1993, from the Pennsylvania Army National Guard states, in pertinent part, that the applicant did not meet the eligibility criteria for the SLRP. 

5.  On 12 November 2008, the Army National Guard denied the applicant's request to receive the Army National Guard SLRP.

6.  Records at the USAR Pay Center, Fort McCoy, Wisconsin (as of 18 February 2009) show the applicant had been paid all required payments of his SLRP, in the amount of $5,016.75, for anniversary years 1989 to 1992.  Payments were not required beyond this date because the applicant had transferred to the Army National Guard.  His remaining contract value is $5,311.00.

7.  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 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, then $500 becomes the calculated amount for repayment that year.   

8.  Army Regulation 135-7 (Army National Guard and U. S. Army Reserve Incentive Programs) provided, in pertinent part, that 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.

9.  Army Regulation 135-7 also provided guidelines for the disposition of incentives or entitlements paid or pending payment to Selected Reserve unit Soldiers during the period 1 October 1991 to 30 September 1999 upon unit inactivation or redesignation.  In pertinent part, it stated that the USAR Soldier would be offered an opportunity to transfer to an Army National Guard of the United States (ARNGUS) unit if otherwise eligible and approved by the gaining ARNGUS command. 

10.  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.  Evidence of record shows the applicant enlisted in the USAR, in good faith, for the SLRP incentive on 24 June 1988.  
2,  Records at the USAR Pay Center show the applicant was paid all required payments of his SLRP, in the amount of $5,016.75, for anniversary years 1989 to 1992.  However, payments were not required beyond this date because the applicant had transferred to the Army National Guard.  His remaining contract value is $5,311.00.

3.  It appears that an injustice has occurred in this case in that the applicant was unable to complete his contractual obligation when his USAR unit deactivated.  He then enlisted in the ARNG with the assumption that the SLRP payments would resume without understanding that such a resumption by another Reserve Component had to be approved beforehand.  Therefore, the applicant's military records may be corrected to show his DA Form 5261-4-R, section V was amended to include the sentence "If a student loan is accepted by the officials processing you for enlistment as payable under the SLRP and it is later discovered that, due to Government error it fails to be paid, 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 SLRP. 

BOARD VOTE:

___X_____  ___X_____  ___X_____  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 the DA Form 5261-4-R be amended to include the sentence "If a student loan is accepted by the officials processing you for enlistment as payable under the SLRP and it is later discovered that, due to Government error it fails to be paid, 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."



2.  The Board further recommends that in accordance with Title 10, U.S. Code, section 1552, the Defense and Finance and Accounting Service shall remit payment to the individual concerned in the amount of $5,311.00, the remaining contract value, as a result of the forgoing correction.



      _________XXX_____________
               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)                                         AR20090000972



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ABCMR Record of Proceedings (cont)                                         AR20090000972



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