BOARD DATE:	  31 January 2012

		DOCKET NUMBER:  AR20110014120 


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 payment of $19.478.20 worth of student loans under the Loan Repayment Program (LRP) on behalf of his son, a former service member (FSM), who was killed in action.

2.  The applicant states his son enlisted under the LRP.  He was killed in action before the third year payment could be made to the loan agencies.  Officials at the U.S. Army Human Resources Command (HRC) told him under the Fiscal Year 2008 National Defense Authorization Act (FY08 NDAA), bonuses are to be paid in full if the Soldier is killed while on active duty.  The LRP is considered a bonus program.  He requests payment of the full 1/3rd portion of the payments that has not been paid because he will be required to pay principal, interest, and fees from the original date of the loans. 

3.  The applicant did not provide any evidence.

CONSIDERATION OF EVIDENCE:

1.  The FSM enlisted in the Regular Army for 5 years on 19 March 2008.  He enlisted under the following programs or incentives:

* Program 9A, U.S. Army Training Enlistment Program
* Program 9C, U.S. Army Enlistment Program (High School Grad Bonus, U.S. Army Enlistment Bonus, Loan Repayment Program, U.S. Army Partnership for Youth Success Program, U.S. Army Seasonal Bonus, and Thrift Savings Plan (Matching)
2.  The FSM's DA Form 3286 (Statement of Enlistment – U.S. Army Enlistment Program) shows in item 3:

	a.  I understand that under the 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 and before I enlist in the Regular Army. 

	b.  I understand only certain loans qualify for the LRP Program.  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 196, 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), Parent Loans for Undergraduate Students (PLUS Loans) Incurred for the use of individuals contracting for the LRP.

	c.  Enlistment for the LRP ensures me, provided I meet and maintain the prescribed prerequisites, that the portion of the amount of loan that may be repaid is 33 1/3 percent or $1,500, whichever is greater, of the unpaid principal balance for each year of service completed.  

	d.  Repayment will be made only after such successful year of active duty that I perform commencing on the date of my enlistment in the Regular Army. 

	e.  I fully understand that I must secure a military deferment or maintain my account in good standing until such time the repayment is started. 

	f.  I understand that interest (even interest re-capitalized into principal) will not be repaid.  I also understand that I will not be reimbursed for payments I make or have already been made to my lenders. 

	g.  I understand that under the LRP, the Army will not repay student loans in excess of $65,000.00 regardless of the amount of my student loans.  I further understand that I am required to make all interest payments of my student loan during my enlistment.  In addition, I understand that I must bring copies of all my student loan promissory notes when I report to the Military Entrance Processing Station for active duty ship date. 

3.  The FSM was killed in action on 12 June 2010.  He had completed 2 years, 2 months, and 24 days of creditable active service.

4.  An advisory opinion was obtained on 13 January 2012 in the processing of this case.  An official at the Education Incentive Control Branch, HRC, Fort Knox, KY, recommended approval of payment directly to the FSM's next of kin (the applicant).  The official stated:

	a.  at the time the FSM entered active duty, individuals contracting for the LRP must have met certain eligibility criteria.  Part of the eligibility criteria was to have loans that qualify under the LRP.  As outlined in the enlistment contract, Statement of Understanding, U.S. Army Incentive Enlistment Program, DA Form 3286-44, section 4, states "I understand that under this program (LRP) 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 1965 (Guaranteed Student Loan) or any loan under Part E of such act (National Direct Student Loan) after 1 October 1975 and before I enlist into the Regular Army."  In addition, Title 10m, USC, section 2171 confirmed loans eligible for repayment must be made under Title IV, Part B, D. or E of the Higher Education Act.

	b.  the 2006 National Defense Authorization Act expanded Title 10, USC, section 2171 to allow repayment of education loans made by a lender under pension plans, state and commercial loans, and other similar sources which are not federally ensured in case of death or serious injury.  The applicant has provided information that indicates his deceased son believed his loans qualified under the LRP.  Based on documentation provided and with the expansion of the law, the HRC Education Incentive Branch would have paid the private student loans.  There is no standard procedure that would settle loans in the final death benefits action or in the case of grievous injury.  Therefore, payment cannot be authorized by this office toward the student loan.  

	c.  If the Board decides to grant compensation, computation should be based on the information provided to the HRC Education Incentive Branch.  The total amount verified for the private loan from AES is $9,292.98 and Citibank is $9,756.48.  Payments totaling $6,195.32 to AES and $6.054.32 to Citibank have been authorized for the FSM first and second year of active duty.  The third year payment would have been $3,097.66 to AES and $3,252.16 to Citibank had the Soldier survived. 

5.  The applicant was provided with a copy of this advisory opinion but he did not respond. 

6.  The Loan Repayment Program 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 of 1965, 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, whichever is greater, is authorized annually to the loan holder on the total remaining original outstanding principal balance.  

7.  Office of the Under Secretary of Defense memorandum, dated 21 May 2008, Subject: Repayment of Unearned Portions of Bonuses, Special Pay, and Education Benefits or Stipends provides policy guidance regarding repayment of unearned pay or benefits.  It states a member who fulfills the requirements specified in a written agreement related to the member's receipt of pay or benefits is entitled to the full amount of the pay or benefit under the agreement.  Any failure to fulfill the service requirements specified in a written agreement may result in the termination of the agreement and the member's repayment of an unearned portion of the pay or benefit.  As a general rule, repayment will not be sought if the member's inability to fulfill the eligibility requirements is due to circumstances determined reasonably beyond the member's control.  Repayment shall not be sought and any remaining unpaid portion of a pay or benefit due to a member under a written agreement that existed at the time of the member's death, which was not the result of the member's misconduct, is payable as a lump sum in the settlement of the decedent's final military pay account.  

DISCUSSION AND CONCLUSIONS:

1.  The FSM enlisted in the Regular Army for various incentives, including the LRP.  His written contract stipulated he would be entitled to payment of an appropriate amount of the LRP.  He had two loans with AES and Citibank totaling $9,292.98 and $9,756.48 respectively.  Payments totaling $6,195.32 to AES and $6.054.32 to Citibank had already been authorized for the FSM's first and second year of active duty. 


2.  Regretfully, he was killed in action on 12 June 2010, prior to completing his third year of his enlistment commitment.  According to DOD policy, the remaining unpaid portion of a pay or benefit due to a member under a written agreement that existed at the time of the member's death, which was not the result of the member's misconduct, is payable as a lump sum in the settlement of the decedent's final military pay account.  

3.  As such, the applicant is entitled to payment of the remaining 33 1/3rd percent of the FSM's authorized loans, less any fees and interest, in accordance with the FSM's written contract.  The third year payment would have been $3,097.66 to AES and $3,252.16 to Citibank had the FSM survived.   In view of the foregoing, the applicant should be paid the third year payment of $6,349.82 consisting of $3,097.66 to AES and $3,252.16 to Citibank the FSM would have been paid had he survived.

BOARD VOTE:

__x___  __x______  ___x_____  GRANT FULL RELIEF 

________  ________  ________  GRANT PARTIAL RELIEF 

________  ________  ________  GRANT FORMAL HEARING

________  ________  ________  DENY APPLICATION

BOARD DETERMINATION/RECOMMENDATION:

The Board determined that the evidence presented was sufficient to warrant a recommendation for relief.  As a result, the Board recommends that all Department of the Army records of the individual concerned be corrected by showing the applicant was authorized payment of the FSM's final 33 1/3rd percent of his student loans under the LRP and paying the applicant directly the amount of $6,349.82 consisting of $3,097.66 to AES and $3,252.16 to Citibank the FSM would have been paid had he survived.



      _______ _  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)                                         AR20110014120





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ABCMR Record of Proceedings (cont)                                         AR20110014120



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