BOARD DATE:	  15 December 2009

		DOCKET NUMBER:  AR20090019249 


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 a college loan under the terms of the Army Loan Repayment Program (LRP).

2.  The applicant states he provided the necessary documents for repayment of his loans before departing for basic training.  He also states the Army promised to pay the loans, but one of his loans totaling $9,500 has not been paid.

3.  The applicant provides, in support of his application, copies of six letters.

CONSIDERATION OF EVIDENCE:

1.  The applicant enlisted in the U.S. Army Reserve (USAR) on 16 February 2007.  He entered active duty in the Regular Army (RA) on 21 May 2007, completed the officer candidate course, and was honorably discharged on
31 October 2007 to accept a commission in the U.S. Army.  The applicant was appointed as a commissioned officer in the rank of second lieutenant and he is currently serving on active duty in support of Operation Enduring Freedom.

2.  A Statement for Enlistment, U.S. Army Enlistment Program (Annex A) to the applicant's enlistment contract, dated 16 February 2007, confirms the options and incentives the applicant contracted for during his enlistment processing.  The LRP is one of the incentives authorized, and the Annex specifies the provisions and terms of the LRP.  This document, in pertinent part, shows:

   a.  the applicant indicated he understood he must disenroll from the GI Bill at the time he entered active duty and if he failed to do this he would not be eligible for the LRP.  It also indicated that the applicant understood 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 any loan under Part E of such act (National Direct Student Loan) after 1 October 1975 and before he enlisted in the Army.  In addition, it indicated he understood that only certain loans qualified for the LRP, including those 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 Loan) of the Higher Education Act of 1965, after 1 October 1975, and before entering active duty.

   b.  the LRP assured him, provided he met and maintained the prescribed prerequisites, that the portion or amount of his student loans that could be repaid was 33 1/3 percent or $1,500, whichever was greater, of the unpaid principal balance for each year of service completed, up to a maximum of $65,000.

   c.  the applicant acknowledged that he understood repayment will be made only after each successful year of active duty he performed commencing on the date of his enlistment in the RA; he must maintain his account in good standing until such time as repayment is started; and in order for the LRP payment cycle to begin on his student loans, he must first coordinate with and provide additional critical information to the Education Incentives and Counseling Branch.

   d.  the applicant and the service representative signed Annex A to his enlistment contract on 16 February 2007.

3.  On 21 May 2007, the recruiting guidance counselor completed Section IV (Certification) of the Record of Military Processing - Armed Forces of the United States (DD Forms 1966/3 and 1966/4).  This document contains an entry in Item 32 (Specific Option/Program Enlisted For, Military Skill, or Assignment to a Geographical Area Guarantees) and in Section VI (Remarks) confirming the applicant's participation in the LRP.

4.  A DD Form 2366 (Montgomery GI Bill Act of 1984 (MGIB) Basic Enrollment), Section 5 (Statement of Disenrollment) contains the statement, "I DO NOT desire to participate in the MGIB.  I understand the benefits of the MGIB program and that I WILL NOT be able to enroll at a later date."  This document also shows that the applicant and a certifying official both signed the document on 23 May 2007.



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

   a.  A letter, dated 17 June 2009, from the applicant's father to Congressman Mike D____ in which he summarizes the provisions of the applicant's enlistment contract regarding the LRP, the actions his son took for repayment of his loans by the U.S. Army, and a failure on the part of the Army to repay one of his son's student loans causing it to go into default.  The applicant's father describes how the principal loan amount of $9,428.37, plus accrued interest and delinquency charges, rose to $12,979.25 and eventually exceeded $14,000; the applicant negotiated with the collection agency to repay the loan amount; he was allowed to repay $9,500 without any interest provided he repaid the amount immediately; and the applicant took out a loan in the amount of $9,500 to repay the student loan.

   b.  A memorandum from the Chief, Soldier Programs and Services Division, U.S. Army Human Resources Command, Alexandria, VA, dated 28 July 2009, in which the loan repayment terms are explained, along with the documentation necessary before the U.S. Army can make any loan repayments.  The document indicates that the U.S. Army can only pay on the original unpaid principal balance that an individual borrowed.  This official states the only loan verification received pertaining to the applicant was from Sallie Mae Service Corporation in November 2007; the total remaining original unpaid principal was $23,131.30; the first year payment totaling $7,710.43 was disbursed on 23 May 2008, and the second year payment totaling $7,710.43 was authorized and submitted to the Defense Finance and Accounting Service (DFAS) for disbursement on 19 May 2009.  This official also advises that the U.S. Army does not assume an individual's loan, the individual remains responsible for the status of his loan, and that there are no provisions that would allow the Department of the Army to reimburse an individual for payments already made.

   c.  The letter from Direct Loans, William D. Ford Federal Direct Loan Program; and the three letters from the U.S. Department of Education (DOE), Student Financial Assistance show that the applicant's loan in the principal amount of $9,428.37 was in default on 31 March 2008; the defaulted student loan was placed with Financial Asset Management Systems, Inc. for securing payment of the debt on 23 September 2008; and the U.S. DOE agreed to a settlement of the applicant's defaulted student loan in the amount of $9,500 on 
4 February 2009.

6.  Army Regulation 601-210 (Regular Army and Army Reserve Enlistment Program), in effect at the time of the applicant's enlistment, prescribes eligibility criteria governing the enlistment of persons, with or without prior service, into the RA and the USAR.  Table 9-4 contained guidance on enlistment option program 9C (Bonus/Army College Fund/Loan Repayment Program).  It contained specific guidance pertaining to the LRP and indicated that the government would repay a designated portion of any loan incurred that was made, insured, or guaranteed under part B of the Higher Education Act of 1965 (Guaranteed Student Loan) or any loan under part E of such act (National Direct Student Loan) after 1 October 1975 and before enlistment into the RA. 

7.  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 members on active duty in specified military specialties.  The law 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.  

8.  Title 10 USC 2171 further specifies that payment of such loans shall be made on the basis of each complete year of service performed as a 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.

DISCUSSION AND CONCLUSIONS:

1.  The applicant contends, in effect, that he should be compensated for his college loan because he provided the necessary documents to Army officials for repayment of his student loans, Army officials failed to take necessary action to ensure payment of one of his student loans, the loan went into default, and he had to remit payments that totaled $9,500 in order to repay the debt.

2.  Records show the applicant was counseled on the provisions and terms of the LRP, including that repayment will be made only after each successful year of active duty he performed commencing on the date of his enlistment in the RA; that he must maintain his account in good standing until such time as repayment is started; and in order for the LRP payment cycle to begin on his student loans, he must first coordinate with and  provide additional critical information to the Education Incentives and Counseling Branch.



3.  The evidence of record shows the applicant was aware of the provisions and terms of the LRP because records show his student loan from Sallie Mae Service Corporation has been verified and at least two annual payments have been processed (i.e., in May 2008 and May 2009) under the LRP.

4.  Records show the applicant incurred a qualifying William D. Ford Loan in the principal amount of $9,428.37:

   a.  There is no evidence of record, and the applicant provides insufficient evidence, to show he submitted the necessary application for verification and repayment of his William D. Ford Loan under the LRP.

   b.  The evidence of record shows that the U.S. DOE agreed to a settlement of the applicant's defaulted student loan in the amount of $9,500.

	c.  There is no evidence of record, and the applicant did not provide sufficient evidence to show he repaid his defaulted student loan in the amount of $9,500.

5.  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 $12,979.25 (or more).  In addition, the applicant has submitted neither probative evidence nor a convincing argument in support of his claim for the payment of the principal amount of his student loan.  Therefore, in view of the foregoing, there is no basis for granting the applicant's request.

6.  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 this 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)                                         AR20090019249



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ABCMR Record of Proceedings (cont)                                         AR20090019249



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