IN THE CASE OF:	 

		BOARD DATE:	  14 February 2012

		DOCKET NUMBER:  AR20110014720 


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 that her Sallie May Signature Student Loans be repaid under the provisions of the Army's Student Loan Repayment Program (SLRP).

2.  She states the following:

* she attended college at the University of North Carolina at Wilmington from August 2004 to May 2008
* she obtained several Sallie Mae Signature Student Loans totaling $58,488.79
* in January 2010, she reported to the Wilmington, NC recruiting station and was offered the following incentives:

* a $15,000 Enlistment (cash) Bonus
* the Montgomery GI Bill plus the $350 kicker
* the $40,000 Student Loan Repayment Program

* she specifically informed the recruiter that her student loans were through Sallie Mae and asked what was necessary for proof of her loans
* she was told by her recruiter she would need her promissory notes from the lender 
* the recruiter promised and reassured her that the student loans would be accepted and paid for up to $40,000.00
* on 6 February 2010, she reported to the Raleigh, NC Military Entrance Processing Station (MEPS) to enlist in the Army 
* while meeting with the Army guidance counselor about the entirety of her contract, which included her obligations and incentives, the counselor made no mention that her loans were not qualifying under the SLRP
* she was also informed she would not need to present the promissory notes from her lender until after she completed training
* once again she was assured that $40,000.00 of her loans would be repaid under the provisions of the SLRP
* neither the recruiter nor guidance counselor acted in accordance with regulatory guidance by advising her that her loans did not qualify even though they both were fully aware that the loans were through Sallie Mae
* in July 2010, she applied online to initiate reimbursement of her student loan 
* she received an email response denying the reimbursement due to the "loan type" and the fact that the law did not change until January 2008
* she contacted her unit education center and was informed by Ms. L that the only way to get her loans reimbursed was to consolidate them and then pay on them for a year
* after a year of payment, the military would then uphold their obligation to pay up to $40,000 of her loan balance
* she contacted a financial institution in order to consolidate the student loans; however, she needed a co-signer to qualify but unfortunately she was unsuccessful in finding one
* she is mandating that the language be added to her contract to ensure that the loans be reimbursed, as in other cases boarded by the Army Board for Correction of Military Records (ABCMR)

3.  The applicant provides:

* five Sallie Mae Signature Student Loan promissory notes
* addenda to her enlistment contract
* an electronic inquiry with response
* ABCMR Docket Number AR20040000307, dated 15 February 2005
* ABCMR Docket Number AR20060002700, dated 6 April 2006

CONSIDERATION OF EVIDENCE:

1.  She enlisted in the U.S. Army Reserve (USAR) on 6 February 2010 for 8 years and is currently serving as a Reservist in a troop program unit in the grade of rank of specialist/E-4.  

2.  She provided copies of five promissory notes which show that prior to her enlistment, she attended the University of North Carolina Wilmington from academic year 2004 through 2008.  She obtained five Sallie Mae Signature Student Loans in the amount of $61,000.00.

3.  She provided a copy of Reserves Annex (Certificate and Acknowledgment USAR Service Requirements and Methods of Fulfillment) of her enlistment contract, dated 6 February 2010, which shows in section IV (Service Obligation) she acknowledged that she was agreed to the following:

* serve 6 years as an assigned member of a troop program unit and 
2 years in the Individual Ready Reserve
* training in military occupational specialty (MOS) 42A (Human Resources Specialist)
* a $40,000.00 SLRP entitlement

4.  She also provided a copy of a DA Form 5261-4-R (Student Loan Repayment Program Addendum), dated 6 February 2010.  Section III (Acknowledgement) of this document shows she contracted for completion of initial active duty for training (IADT) and qualification in MOS 42A, and she would be granted $40,000.00 in loan repayments, which was approved by Headquarters, Department of the Army.  Both the applicant and the guidance counselor signed this document. 

5.  Section V (Entitlement) of her SLRP Addendum shows she understood that loan repayment under the SLRP would apply and the Government would repay a designated portion of any outstanding loan(s) she had secured since 1 October 1975.  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 Loan(s) or any loan incurred for educational purposes made by a lender that was an agency or instrumentality of a State; a financial or credit institution that was subject to examination and supervision by an agency of the United States or and State; from a pension fund or a nonprofit private entity (subject to case-by-case review/approval by the National Guard Bureau , United Army Reserve Command or Headquarters, Department of the Army approval authority).

6.  Her record contains a DD Form 214 (Certificate of Release or Discharge from Active Duty) which shows she entered active duty on 17 February 2010 to attend IADT at Fort Jackson, SC.  She was awarded MOS 42A and was released from active duty training on 1 July 2010 and transferred to her USAR unit.  

7.  On 29 July 2010, she submitted an inquiry to the SLRP Team, Army Human Resources Command on obtaining her benefits under the SLRP.  She was informed that her five Sallie Mae Financial Corporation loans did not qualify for repayment under the SLRP as they were not qualifying loans at the time of execution.  The law did not change until 28 January 2008, which provided for the repayment of private loans under the SLRP.  As such, her loans would not receive payment under that program.  

8.  She provided copies of two ABCMR Records of Proceeding, dated 15 February 2005 and 6 April 2006, respectively.  The applicants in both cases requested repayment of a private loan under the provisions of the SLRP contained in their enlistment contracts.  

9.  The Board found, in both cases, that although the applicants' loans did not qualify for repayment under the provisions of the SLRP, the applicants’ entered into a contract with the understanding that their loans would be repaid if they met the criteria as outlined in their enlistment contracts.  The applicants’ fulfilled their portions of the contracts and as matters of equity were granted the amounts specified in the SLRP Addenda of their enlistment contracts. 

10.  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.  

11.  Army Regulation 601-210, 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 same in the remarks section of the DD Form 1966 (Record of Military Processing – Armed Forces of the United States) series.

12.  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 $500.00 plus the accrued interest not paid by the Department of the 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 $500.00, then $500.00 becomes the calculated amount for repayment that year. 

13.  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.

14.  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.

15.  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.  It is apparent the applicant’s Sallie Mae Signature Student Loans did not meet the criteria established by law and regulation to qualify for repayment by the Army under the SLRP.  The loans were not made, insured, or guaranteed under Title IV, Part B, D, or E of the Higher Education Act of 1965, as is required; however, this is not the overriding factor in this case given the equity considerations and the resultant injustice.  

2.  The applicant’s enlistment contract established a contractual agreement between her and the Army.  Her contention that she believed all of her student loans would be repaid as part of her enlistment contract is supported by the evidence of record.  The SLRP Addendum was signed by both the applicant and the Army guidance counselor.  

3.  In addition, governing regulations require that Army guidance counselors verify and counsel applicants on their eligibility for the options they agreed to prior to departure for active duty.  Further, these counselors are obligated to advise applicants on any options they agreed to, but are not eligible for, and on any available alternatives.  

4.  Finally, counselors must add entries to the enlistment contract and/or associated documents confirming verification of option(s) and incentive(s) eligibility and/or counseling on ineligibility prior to a member departing for active duty.  In this case, counselors failed to properly document the ineligibility of the applicant's student loans. 

5.  It appears that the applicant entered into an erroneous contract with the Army, through no fault of her own.  Based on the negligence of recruiting personnel and the guidance counselor to follow established regulatory guidelines, it would be appropriate to honor her enlistment contract as outlined in the SLRP Addendum, subject to the $40,000.00 maximum loan repayment limits.

6.  In doing so, her Statement for Enlistment United States Army Enlistment Program should be corrected to include the statement, "If a student loan is accepted by the official processing you for enlistment as payable under the SLRP and the government fails to verify that the student loan accepted actually is eligible under the Higher Education Act of 1965 and such failure results in nonpayment of the loan by the SLRP or the repayment or default of the loan, 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, subject to the maximum loan repayment limits of $40,000.00."  This would allow the Board to invoke that provision and pay her the amount the lending institution would have been paid for the Sallie Mae Signature Student Loans. 

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 all Department of the Army records of the individual concerned be corrected by amending the applicant's Statement for Enlistment United States Army Enlistment Program to include the sentence "If a student loan is accepted by the official processing you for enlistment as payable under the SLRP and the government fails to verify that the student loan accepted actually is eligible under the Higher Education Act of 1965, and such failure results in nonpayment of the loan by the SLRP or the repayment or default of the loan, 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 subject to the maximum loan repayment limits of $40,000.00."  

2.  That as a result of the foregoing correction the Defense Finance and Accounting Service shall remit payment to the lending institution as specified in her enlistment contract, in the amount of $40,000.00, to which she is entitled as a result of this correction.  If required, the applicant will submit the appropriate evidence (promissory notes, etc.) to the Defense Finance and Accounting Service.  



      _____________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)                                         AR20110014720





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ABCMR Record of Proceedings (cont)                                         AR20110014720



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