IN THE CASE OF:	  

		BOARD DATE:		  24 November 2009   

		DOCKET NUMBER:  AR20090008165 


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 to have his loan paid under the Loan Repayment Program (LRP).

2.  The applicant states that after he was denied repayment of his American Education Services (AES) loan under the LRP in 2005, he sought a lower interest rate and obtained a loan in the amount of $22,000.00 with First National Bank.  He offers that First National Bank sold his loan to Stellar One Bank.  The applicant maintains he was informed that the Education Incentives and Counseling Branch (EICB) has granted exceptions to policy to pay off private education loans, but he is ineligible because his loan has already been denied and is currently held by a different financial institution.  Additionally, he states that the LRP now covers student loans from AES.  Therefore, he opines that the LRP should now cover his Stellar One Bank loan which was originally owed to AES.

3.  The applicant provides loan documents from First National Bank, DD Forms 2475 (DOD Educational LRP Annual Application), EICB letter, Stellar One Bank statement, and a supporting statement.

CONSIDERATION OF EVIDENCE:

1.  The applicant’s military records show that on 26 March 2005, he enlisted in the Regular Army for 3 years in the pay grade of E-4.  A Statement for Enlistment - U.S. Army Enlistment Program - U.S. Army Delayed Enlistment Program prepared during his enlistment processing confirms that the applicant enlisted in the Regular Army for a cash bonus and the LRP incentive option.
2.  The LRP provisions in the statement for enlistment required, in pertinent part, that the applicant acknowledge and 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) of the Higher Education Act of 1965 after 1 October 1975 and before entering active duty.

3.  The type of loans that qualified for the LRP were:  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 Soldiers name), and Parent Loans for Undergraduate Students incurred for the use of individual contracting for LRP.

4.  As an incentive, the applicant was also eligible to receive a $10,000.00 cash bonus.  He understood that the LRP was contingent on his disenrollment from the Montgomery GI Bill (MGIB).  Disenrollment must be accomplished at the time he entered active duty.  If he failed to complete the disenrollment portion of the DD Form 2366 (MGIB Act of 1984), he would not be eligible for the LRP and would be automatically enrolled in the MGIB.  The applicant signed his statement of enlistment verifying that he understood "all promises and guarantees whatsoever concerning my enlistment."

5.  On 12 February 2005, the applicant disenrolled from the MGIB.

6.  The DD Form 2475, dated 2 December 2005, shows that the applicant requested payment to AES in the amount of $22,668.71 under the LRP which was verified by AES.  On 30 December 2005, the EICB informed the applicant that his request for repayment received from AES was denied.  The EICB further stated that the loan did not qualify for repayment under the LRP because it was a Non-Title IV Loan which was not made, insured or guaranteed under Title IV Part B, D, or E of the Higher Education Act.  The EICB said that payment toward loans that do not qualify under LRP would be in violation of the law governing the program and there were no exceptions to the law.

7.  The DD Form 2475, dated 14 April 2009, shows that the applicant requested payment to Stellar One Bank in the amount of $20,099.25 under the LRP.  In the "Remarks" section the applicant explained that the loan was used to pay off a student loan from AES.  He said that paperwork was submitted in November 2005 to have AES loan repaid, but was denied.  He added in order to receive a  better interest rate, the Stellar One Bank [originally First National Bank] was used.

8.  In a support letter, dated 14 April 2009, the Chief, Soldier and Family Support Division, United States Military Academy Band, West Point, New York, recommended approval of the applicant's request for repayment of his loan under the LRP.  He provided a brief synopsis of the applicant's situation and stated that due to financial hardship, rising interest rates, and very high payments for his education loan, the applicant requested and received a new low-interest loan to consolidate his balance and control his financial situation.  The new loan was in the amount of $22,100.00.  He stated that he was informed that the EICB has recently begun granting exceptions to policy to cover private education loans.  The Chief, Soldier and Family Support Division, stated that the applicant's situation warrants approval of his request.

9.  A statement from the First National Bank shows that on 28 December 2007 the applicant received a loan in the amount of $22,100.00.

10.  In the processing of this case, the Board obtained an advisory opinion from the Chief, Education Incentives Branch U.S. Army Human Resources Command. The Chief, Education Incentives Branch, recommended disapproval of the applicant’s request.  She said that the applicant signed a Statement of Understanding indicating that he understood that only certain loans qualified for the LRP.  She further stated that Title 10, section 2171 also confirmed loans eligible for repayment must be made under Title IV, Part B, D, or E of the Higher Education Act.  The Chief, Education Incentives Branch, said that based on the information provided from AES, the Non-Title IV Loan does not qualify for repayment under the LRP.  She added that there were no exceptions to the law; therefore, payment cannot be authorized for his non-qualified loans.  She offered that the applicant borrowed money for his education and then joined the U.S. Army to have his qualifying loans repaid.  Additionally, the Chief, Education Incentives Branch, said that the applicant did have Stafford loans that qualified for repayment under the LRP.  The total remaining original unpaid principal was $35,686.00.

11.  On 11 September 2009, the applicant responded to the advisory opinion.  He said he understood the law governing loans for repayment under the Higher Education Act.  However, he questions the validity of Title 10, section 2171, Part A subsection 1, in regard to a financial or credit institution, including an insurance company.  Additionally, he states that he has been informed that the EICB has previously repaid private educational loans that fall into this category for Soldiers who enlist after 2005.

12.  Army Regulation 601-210 (Active and Reserve Components Enlistment Program), Table 9-4, contains guidance on enlistment option program 9C (Bonus/Army College Fund/Loan Repayment Program).  Table 9-4 provides program processing procedures that require specific counseling and administrative actions in connection with processing members enlisting with the LRP incentive.  In addition, line 7 of Table 9-4 requires the guidance counselor to verify that the applicant has qualifying loans if enlisting for the LRP, to advise the applicant if any loan is not eligible, and to have the applicant acknowledge the same in the remarks section of the DD Form 1966 (Record Of Military Processing - Armed Forces of the United States).

13.  Title 10, U.S. Code, section 2171(a), provides that the Secretary of Defense may repay any loan made, insured, or guaranteed under Part B of Title IV of the Higher Education Act of 1965; any loan made under Part D of such title (the William D. Ford Federal Direct Loan Program), any loan made under Part E of such title; or  any loan incurred for educational purposes made by a lender that is (1) an agency or instrumentality of a State; (2) a financial or credit institution (including an insurance company) that is subject to examination and supervision by an agency of the United States or any State; (3) a pension fund approved by the Secretary for purposes of this section; or (4) a non-profit private entity designated by a State, regulated by such State, and approved by the Secretary for purposes of this section.

DISCUSSION AND CONCLUSIONS:

1.  The applicant's enlistment contract, which he completed in May 2005, shows that he stated that he understood that only certain loans would be paid by the Army under the LRP.  The applicant makes no argument that he believed his AES loan qualified for repayment under the LRP.  He simply states that the LRP now covers student loans from AES and that the EICB has previously paid private educational loans.

2.  Evidence of record verifies that the government is currently paying the applicant’s Stafford Loan that has a remaining balance of $35,686.00. Additionally, the applicant enlisted for a cash bonus of $10,000.00.  The Army has lived up to the provisions of his enlistment contract and there is no evidence and the applicant has not submitted any to show that his recruiter or other responsible personnel assured him that his student loan under AES would be paid by the government.

3.  Although the applicant argues that his AES student loan is now covered under the LRP and that EICB has granted exceptions to policy and paid off other private education loans, he has provided no evidence to substantiate his claim.  Regardless of his argument, the applicant's student loan from AES did not qualify for repayment under the LRP and there are no exceptions to the law.

4.  In order to justify correction of a military record, the applicant must show 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)                                         AR20090008165



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ABCMR Record of Proceedings (cont)                                         AR20090008165



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