BOARD DATE:	  3 April 2014

		DOCKET NUMBER:  AR20130010226 


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 relief of recoupment of $5,103.45 under the Student Loan Repayment Program (SLRP) for the period 2001 to 2004.  

2.  She states:

	a.  She received a notice in February 2013 that she was to pay the U.S. Treasury $8,000.  She discovered a month later the reasons for this debt.

	b.  The California Army National Guard (CAARNG) Incentive Task Force team performed an audit for the years she served in the ARNG between 2001 and 2004.  This agency provided paperwork that they had overpaid on her student loans.  

	c.  The first letter of indebtedness was sent in early 2012 to an address that was 8 years old.  As result, she didn't receive the notice until the debt was already in collections.  

	d.  The documents used in the audit were sent to her for her records, but they do not show a clear picture as to how the money was paid on her account.  The signature on several of the vouchers was that of a master sergeant who had been sentenced with a fraud conviction during the period she served in the ARNG.  


	e.  The Defense Finance and Accounting Service (DFAS) has no records for her and she has been unable to reach CAARNG/U.S. Property and Fiscal Office (USPFO) by phone to get clarity on their calculations.  She believes the debt is unfair and unclear.  She never saw the money that is being asked of her because it was never given to her directly.  The money was supposedly sent directly to the student loan servicer.  

	f.  She is now finishing her final trimester in a 4-year graduate program in Integrative Medicine.  Her student loan debt is $200,000.  The CAARNG is now asking for $5,103.45 based on an overpayment from 8 years ago.  She is already repaying a large amount of student loans to the Department of Education.  She is not working or earning money.  When she finishes school, she will be making less than $25,000 per year.  This a very low income bracket for the geographic area in which she lives in California.  After she takes her State examination, she will be able to work in her new profession in health services providing alternative health care to her community.   

3.  She provides:

* DD Form 4
* National Guard Bureau (NGB) Form 22-5-R-E (Addendum to DD Form 4)
* Active Duty Data
* DD Form 1966 (Record of Military Processing - Armed Forces of the United States)
* Memorandum, Subject:  Incentives Notice of Indebtedness (NOI):  Out-of-Service Personnel
* NGB Form 600-7-5-R-E (SLRP Addendum - ARNG of the United States)
* Memorandum for Record, Subject:  Re-audit of SLRP Audit for Specialist (SPC) [applicant's name], xxx-xx-xxxx
* NGB Form 22E (Report of Separation and Record of Service
* Loan Details from the National Student Loan Data System (NSLDS)
* Memorandum, Subject:  Transmission of Pay Documents
* SLRP statements

CONSIDERATION OF EVIDENCE:

1.  On 29 March 2001, she signed an SLRP Addendum:

	a.  She indicated she had two disbursed loans existing in the amount of $5,250.

	b.  She acknowledged the total amount of repayment for qualifying loans would not exceed $10,000.00 plus accrued interest.
	c.  The Government would repay a designated portion of any outstanding loan(s) that she had secured since 1 October 1975.  The 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 Loans).

	d.  The portion that may be repaid annually on any qualifying loan(s) will not exceed 15 percent (not to exceed $1,500 per year) of the total of all loans of $500, whichever is greater plus accrued interest.  Payment will be processed on the anniversary date of her enlistment for each satisfactory year of service.  

   e.  She acknowledged she understood she would receive an Annual Loan Repayment Memorandum from the Incentive Manager   She would be responsible for completing sections I and II of the Annual Loan Repayment Memorandum.

	f.  She acknowledged she would keep track of her loans.

	g.  She acknowledged she understood her loan was not the responsibility of the government.  She was responsible for maintaining her loan account(s) in good standing.  If she did not, her loan(s) would go into default, the government would not make a payment on defaulted loan(s), and her credit rating could be damaged.  

2.  The SLRP addendum was signed by the applicant and the Enlisting Official on 29 March 2001.  She was assigned an SLRP Control Number of S01-04001 NY.

3.  The applicant enlisted in the New York ARNG (NYARNG) on 3 April 2001.  

4.  On 23 January 2004, she voluntarily transferred from the NYARNG to the CAARNG.  
5.  On 6 May 2005, the applicant was discharged from the CAARNG and as a Reserve of the Army by reason of being unfit for retention standards.  

6.  In a 21 May 2012 memorandum, the USPFO informed the applicant she was indebted to the U.S. Government for $8,253.45 SLRP because she did not provide valid loan documentation.  The memorandum indicated the debt was referred to DFAS or her Military Pay office for collection.  She was advised of her rights to inspect and copy government records related to the debt; to appeal the validity, the amount, or the liability for the debt; to request a correction of her records through the Army Board for Correction of Military Records (ABCMR); to seek waiver of debt; or to seek remission of the debt.

7.  Information from the NSLDS in March 2013 indicated she was dispersed two loans totaling $5,500.  Her outstanding loan amount was listed as $8,500 as of 27 March 2008.

8.  In a 24 April 2013 Memorandum for Record, a representative from the CAARNG indicated:

	a.  The applicant provided sufficient documentation to reduce the recoupment amount from $8,253.45 to $5,103.45 and to change audit category from Category 3A (Correctable) to Category 3b (Non-Correctable).

	b.  The applicant provided the missing NSLDS printouts required to substantiate their incentive.

	c.  The applicant enlisted in the NYARNG on 30 March 2001 for the $10,000.00 SLRP on a 6x2 enlistment.  At the time of her enlistment, the applicant had two qualifying loans in the amount of $5,250.  

	d.  The applicant transferred to the CAARNG on 23 January 2004 and was discharged on 6 May 2005, which terminated the incentive.

	e.  The applicant was eligible for four payments of $787.50 for a total of $3,150.  She was paid $5,103.45 in excess of the amount authorized by Title 10, Chapter 1609, Section 16301(b) for annual payment and still subject to recoupment.  

	f.  The CAARNG will credit the applicant in the amount of $3,150 and she may request relief of recoupment from the ABCMR to retain the payment in excess of $5,105.45.

9.  On 6 September 2013, an advisory opinion was obtained from the Chief, Personnel Policy Division, NGB who recommended partial approval.  The advisory official stated the CAARNG should recoup $3,675 due to overpayment to the applicant and the applicant's contentions were reiterated.  The advisory official stated:

	a.  A memorandum from the ARNG Personnel Programs, Resources and Manpower Division (ARNG-HRM), dated 10 July 2013 stated, "Ms. [applicant] was eligible for the Student Loan Repayment Program (SLRP) at the time of enlistment into the New York Army National Guard on 3 April 2001.  Ms. [applicant] had $5,250 in eligible loans with an annual entitlement of $787.50.  She did not receive a payment on her first anniversary date on 3 April 2002.  On 31 October 2003, she received a total correct payment of $1,575, which included the first and second anniversary payment.  On 30 April 2004, a payment of $2,250 was received as part of her third year anniversary payment, which was $1,462.50 over the authorized annual cap.  On 30 May 2004 and 28 June 2004, she received two payments as part of her fourth year anniversary payment, which was disbursed prior to her eligible entitlement date.  The total payment was $3,000, an overpayment of $2,212.50."

	b.  According to ARNG-HRM, the applicant was only entitled to four anniversary payments for a combined amount of $3,150.  However, she received $6,825, an overpayment of $3,675.  Her two eligible loans were paid off with the fourth anniversary payment and any additional amount was applied to loans not eligible under the SLRP contract.  The overpayment on her maximum entitlement requires a recoupment.

	c.  The CAARNG concurred that the overpayment required a recoupment; however, per the attached email dated 28 August 2013 (email not available), CAARNG recommended a recoupment in the amount of $5,103.45 versus $3,675.00 as recommended by ARNG-HRM.

10.  A copy of the advisory opinion was forwarded to the applicant to allow her submit comments or a rebuttal.  On 23 September 2013, she submitted a response by stating she believes the entire collection process is unfair.  Sergeant TM, the person who signed her vouchers and overpaid on her behalf, is responsible for the incorrect disbursement in her name.  The amount of time she put into researching the CAARNG's audit is worth the amount the CAARNG is requesting.  The Internal Revenue Service is currently threatening to garnish her wages and collection agencies have been sending her letters requesting money from 10 years ago.  She states that the error is not her fault, she doesn't have $3,675 to give to the CAARNG, she currently owes $200,000 in student loans, and is currently seeking employment.  

11.  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 plus the accrued interest not paid by the Department of 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, then $500 becomes the calculated amount for repayment that year.   

12.  Army Regulation 135-7 (ARNG and U.S. Army Reserve Incentive Programs) provided that 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 military occupational specialty 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.

13.  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.

14.  Department of Defense Financial Management Regulation, Volume 7A (Military Pay Policy and Procedures - Active Duty and Reserve Pay), Chapter 2 (Repayment of Unearned Portion of Bonuses and Other Benefits), provides in:

   a.  section 0201 (General provisions) a member of the uniformed services who enters into a written agreement with specified service conditions for receipt of a bonus, special or incentive pay, educational benefits, stipend, or similar payment (hereinafter referred to as "pay or benefit"), is entitled to the full amount of the pay or benefit if the member fulfills the conditions of that pay or benefit.  If the member fails to fulfill the service conditions specified in the written agreement for the pay or benefit, then the pay or benefit may be terminated and the member may be required to repay an amount equal to the unearned portion of the pay or benefit.  Such repayment will be pursued unless the member's failure to fulfill specified service conditions is due to circumstances determined reasonably beyond the member's control.  Conditions under which repayment will not be sought are set forth in section 0202; and
   
   b.  section 0202 (Repayment and non-repayment conditions) provides that, as a general rule, repayment action will not be pursued in situations in which the member's inability to fulfill specified service conditions related to a pay or benefit is due to circumstances determined reasonably beyond the member's control.  In addition, the Secretary of the Military Department concerned has the discretion to, at some point in the process, render a case-by-case determination that the member's repayment of, or the Military Department's full payment of an unpaid portion of, a pay or benefit is appropriate based on one or more of the following: 

* contrary to a personnel policy or management objective
* against equity and good conscience
* contrary to the best interest of the United States

DISCUSSION AND CONCLUSIONS:

1.  The applicant's contention that the debt is unfair and unclear is acknowledged and determined to have merit to grant relief in this case.  

2.  The applicant enlisted in the ARNG on 3 April 2001.  She contracted for repayment of two eligible student loans in the amount of $5,250.  

3.  In the 24 April 2013 memorandum, the CAARNG stated the applicant was eligible for 4 payments of $787.50 for a total of $3,150.  However, the CAARNG performed an audit and determined she was paid $5,103.45 in excess of the amount authorized.  

4.  The advisory opinion stated the applicant:  

* did not receive a payment on her first anniversary date on 3 April 2002
* received a total correct payment of $1,575 on 31 October 2003, which included the first and second anniversary payments
* received a payment of $2,250 on her third anniversary on 30 April 2004, which was $1,462.50 over the authorized annual amount
* received two payments as part of her fourth year anniversary payment on 30 May and 28 June 2004
* received a total of $6,825, an overpayment of $3,675

5.  The applicant was only entitled to four anniversary payments for a combined amount of $3,150.  However, she received $6,826, an overpayment of $3,675.  Her two eligible loans were paid off with the fourth anniversary payment, and the advisory opinion indicates the additional amount was applied to loans not eligible under the SLRP contract.  However, the CAARNG recommended a recoupment in the amount of $5,103.45 versus $3,675.00.

6.  SLRP payments are not made to individuals; they are made to the lending institution.  The applicant did not receive these monies.  She was not notified of the debt until 8 years later.  The overpayment may be connected to a member of the CAARNG being sentenced on a fraud conviction.  It is possible the applicant received some benefit from this overpayment (if it was indeed used to pay some of her ineligible student loans); however, the advisory opinion provided no proof of this.  Given all the factors in this case, it would be equitable to grant the requested relief.

7.  The Secretary of the Military Department concerned has the discretion to render a determination that the member's repayment of, or the Military Department's full payment of an unpaid portion of, a pay or benefit is appropriate based on it being contrary to a personnel policy or management objective or against equity and good conscience.

8.  After careful review of the applicant's case, it is concluded that repayment action should not be pursued.  The applicant was not paid the SLRP overpayment; the lending institution was paid.  She should not have to repay monies she never received.  

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 State Army National Guard and Department of the Army records of the individual concerned be corrected by showing a request to allow payment of the total SLRP amount paid on the applicant's behalf was approved, refunding any monies already recouped, and showing she is entitled to full payment of the SLRP already paid on her behalf.

2.  As a result of the above correction, the Defense Finance and Accounting Service shall be notified of the Board's determination, cancel the recoupment action, and remit payment of any monies that may have been recouped from the applicant based on the debt action.  



      _______ _  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)                                         AR20130010226





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ABCMR Record of Proceedings (cont)                                         AR20130010226



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