IN THE CASE OF:	

		BOARD DATE:	1 October 2009

		DOCKET NUMBER:  AR20090008112 


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 a student loan under the Loan Repayment Program (LRP).  

2.  The applicant states that in his original enlistment on 6 September 2005, he signed a contract stating that he would receive the LRP for $60,000.00 worth of college tuition and thus declining the MGIB.  However, during basic combat training, he learned that the Army was going to repay only $11,625.00 of his Federal loans and leaving him with $32,000.00 worth of private loans to deal with.  He adds that when he enlisted, he was promised that his student loans, although private, would be paid in full because they were Government based signature loans.  His recruiter, as well as officials at the Military Entrance Processing Station (MEPS), showed him documentation stating that his loans would be covered under the LRP.  He further adds that he was forced to consolidate his loans in October 2007 because he had different private loans from several different banks and he wanted to only pay one interest rate.  However, he put himself in further debt because the interest rate is so high.

3.  The applicant provides a copy of his application for a private Consolidation Loan, dated 7 October 2007; a copy of a letter, dated 18 October 2007, regarding his private loan consolidation; a copy of a Federal Truth in Lending Disclosure Statement, dated 18 October 2007; a copy of a Financial Activity Summary, dated 30 October 2008; a copy of his Statement for Enlistment (Dep-Out), dated 6 September 2005; a copy of his DD Form 3266 (Montgomery GI Bill), dated 8 September 2005; a copy of USAREC Form 1232 (Loan Repayment Program 
Inprocessing Counseling), dated 16 August 2005; a self-authored letter, dated 5 May 2009; a copy of a General Power of Attorney, dated 29 April 2009; and a copy of his mobilization orders, dated 25 March 2009, in support of his request. 

CONSIDERATION OF EVIDENCE: 

1.  The applicant’s records show he enlisted in the U.S Army Reserve (USAR) under the Delayed Entry Program (DEP) on 16 August 2004.  His Statement of Enlistment (Dep-In), dated 16 August 2004, shows he enlisted for the U.S. Army Training Enlistment Program (Option 9A), the U.S. Army Cash Bonus, and the LRP (Option C).  On this form, in addition to acknowledging that he understood he must disenroll from the MGIB, the applicant acknowledged the following:

"I understand that under this program (LRP) that the government will repay a designated portion of any loan I incurred that was made, insured, or guaranteed, under Part B of the Higher Education Act of 1975 (Guaranteed Student Loan) or any loan under Part E of such act (National Direct Student Loan) after 1 October 1975.  I understand that only certain loans qualify for the LRP.  Loans which qualify for this program include those which are made, insured, or guaranteed under Part B (Federal Family Education Loan Program), Part D (William D. Ford Direct Loan Program, or Part E (Federal Perkins Loans) or the Higher Education Act of 1965, after 1 October 1975, and before entering Active Duty.  The types of loans that qualify for the LRP are Auxiliary Loan Assistance for Students, Federally Insured Student Loans, Guaranteed Student Loans or Stafford Loans, National Direct Student Loans or Perkins Loans, Supplemental Loans for Students, Consolidated Loans (in Soldier’s Name), and/or PLUS Loans."

2.  The applicant’s records also show he enlisted in the Regular Army (RA) for a period of 5 years on 6 September 2005.  His Statement of Enlistment (Dep-Out), dated 6 September 2005, also shows he enlisted for the LRP.  On this form he again acknowledged that under the LRP the Government would repay a designated portion of any loan he incurred that was made, insured, or guaranteed, under Part B of the Higher Education Act of 1975 (Guaranteed Student Loan) or Part E of such act (National Direct Student Loan) after 1 October 1975, and before he enlisted into the RA, and the type of loans that would qualify for the LRP.  He also acknowledged he understood that he must disenroll from the Montgomery GI Bill in order to qualify for the LRP.  He further acknowledged that he understood that in order for the LRP payment cycle to begin on his student loans, he must provide additional critical information on the DD Form 2475 (DOD Educational Loan Repayment Program (LRP) Annual application) to the Education Incentives and Counseling Branch.  
3.  On 6 September 2005, the applicant completed a USAREC Form 1232 and again indicated that he understood that only certain loans qualify for the LRP.  He further identified and listed the number of loans the Army would cover.  He listed three Stafford Loans in the amounts of $2,546.25; $2,546.25; and $5,307.50 respectively.

4.  The applicant’s records also show he completed basic combat and advanced individual training and he was awarded military occupational specialty (MOS) 31B (Military Police).  He also completed airborne training and he was promoted through the ranks to the rank/grade of sergeant (SGT)/E-5.

5.  On 7 October 2007, the applicant submitted an individual application to consolidate his loans through Xpress Loan Servicing.  He listed four loans from Sallie Mae, Inc.; two loans from AES [American Education Services] Loan Servicing; and another loan from Iowa Student Loan Liquidity, for a total principal amount of $32,470.98 at the time.  

6.  In a self-authored statement, dated 5 May 2009, the applicant restated his contention that his loans be repaid.  He adds that he almost gave up on the issue until he met another Soldier who had similar circumstances but was granted relief through this Board.  

7.  In the processing of the applicant's case, on 16 June 2009, an advisory opinion was received from the Chief, Education Incentives Branch of the U.S. Army Human Resources Command.  The Chief stated that:

	a.  at the time the applicant entered active duty on 6 September 2005, the terms outlined in his enlistment contract indicate that he understood that only certain loans qualified for the LRP.  Title 10, U.S. Code, section 2171, confirms that the loans eligible for repayment must be made under Title IV, Part B, D, or E of the Higher Education Act of 1965.  Additionally, the applicant only listed Stafford Loans on the USAREC Form 1232 during inprocessing counseling; 

	b.  based on the information provided from Xpress Loan Servicing, the Private Consolidated Loan does not qualify for repayment 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.  He borrowed money for his education and then joined the Army to have his qualifying loans repaid;

	c.  the applicant does have loans that qualify for repayment under the LRP.  The total remaining original unpaid principal verified by Sallie Mae, Inc. for his Stafford account is $11,625.00.  Appropriate payment has been authorized toward his qualifying loan; and
	d.  if the Board decides to grant compensation, it is recommended that a computation of any payment be based on the information he provided on the DD Form 2475.  The total outstanding balance on the non-qualifying Private Consolidated Loan is $29,677.09, and if so, payment be sent directly to him.

8.  On 16 June 2009, a copy of the advisory opinion was provided to the applicant for information and to allow him the opportunity to submit comments or a rebuttal.  He subsequently submitted a rebuttal on 25 June 2009 in which he states that he took what he was told by his recruiter and MEPS personnel and enlisted for 5 years under the impression that the Army would pay up to $65,000.00 in student loans.  He did not find out until after basic training that he was not properly counseled.  He adds that during his counseling, he was told to only list his Stafford loans on the form but he was assured that all his loans would be paid since they were issued by a Government-backed organization.  He also adds that the $27,175 mentioned in the advisory opinion was an additional amount of his loans which he was also led to believe would be paid.  He concludes that he consolidated his loans in October 2007, made several payments, but he still owes over $29,677.00.  He concludes that if he had known that the Army would not pay his loans, he would not have given up the MGIB and he would rather have finished up his enlistment commitment and used the MGIB for his education.

9.  The LRP 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, 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 $1,500.00, whichever is greater, is authorized annually to the loan holder on the total remaining original outstanding principal balance.

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.  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 that these programs/options are designed to merge valid Army requirements with personal desires.

DISCUSSION AND CONCLUSIONS:

1.  The evidence of record shows the applicant enlisted for the LRP incentive.  He had obtained several student loans prior to his entry on active duty.  During his enlistment (Dep-In), he 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.  Additionally, during his Dep-out, he was again guided through the process and acknowledged that he understood which loans qualified for repayment.  There is no evidence that he was misled by his recruiter and/or MEPS personnel or that he misunderstood what he signed on three separate occasions. 

2.  The applicant consolidated his loans through Xpress Loan Servicing in October 2007.  However, the private consolidated loan was not made, insured, or guaranteed under Title IV, Part B, D, or E of the Higher Education Act of 1965.  By law, this is a non-qualifying loan and payment cannot be authorized.

3.  Nevertheless, the applicant does have loans that qualify for repayment under the LRP.  The total remaining original unpaid principal verified by Sallie Mae, Inc. for his Stafford account is $11,625.00.  The appropriate payment has already been authorized toward these qualifying loans.

4.  The applicant’s noble enlistment in the Army and his service in Iraq and/or Afghanistan are noted.  However, there is neither an error nor an injustice in his case.  He borrowed money for his education and then joined the Army in an attempt to have his qualifying loans repaid.  

5.  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 did not submit sufficient evidence that would satisfy this requirement.  In view of the circumstances in this case, there is insufficient evidence to grant the requested relief.   The applicant has not shown error, injustice, or inequity for the relief he requests.




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)                                         AR20090008112



3


ARMY BOARD FOR CORRECTION OF MILITARY RECORDS

 RECORD OF PROCEEDINGS


1

ABCMR Record of Proceedings (cont)                                         AR20090008112



2


ARMY BOARD FOR CORRECTION OF MILITARY RECORDS

 RECORD OF PROCEEDINGS


1