IN THE CASE OF:	  

		BOARD DATE:  18 February 2014

		DOCKET NUMBER:  AR20130021987 


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 the contracted amount of $65,000.00 under the Loan Repayment Program (LRP) and reimbursement for payments she made.

2.  The applicant states:

   a.  She is currently enrolled in the LRP and was authorized a repayment of $65,000.00 of the principal on her student loans.  Great Lakes, the lender of her school loan, has reported a false amount of $43,681.83 to the Army.  The actual principal to the loan was $64,397.00.  She has contacted Great Lakes and they have admitted that the wrong amount was reported.  

   b.  The problem she is now facing is that the Army refuses to pay the contracted amount.  Currently the pay-off balance of this loan is $12,112.71.  She has documentation that supports the actual principal of the student loan and the amount that remains.  This documentation was forwarded to the U.S. Army Human Resources Command (HRC); however, HRC refused any type of payment due to the report Great Lakes made several years ago.  The Education Incentive Branch will no longer assist her until this appeal has been made.

3.  The applicant provides:

* Six Federal Truth in Lending Disclosure Key Alternative Loan documents
* 2006 check from Key Education Resources
* 2008 letter from Great Lakes
* 2011 memorandum from HRC, Education Incentives Branch
* 2011 letter from HRC, Education Incentives Branch
* 2013 letter from Great Lakes

CONSIDERATION OF EVIDENCE:

1.  Title 10, U.S. Code, section 1552(b), provides that applications for correction of military records must be filed within 3 years after discovery of the alleged error or injustice.  This provision of law also allows the Army Board for Correction of Military Records (ABCMR) to excuse an applicant's failure to timely file within the 3-year statute of limitations if the ABCMR determines it would be in the interest of justice to do so.  While it appears the applicant did not file within the time frame provided in the statute of limitations, the ABCMR has elected to conduct a substantive review of this case and, only to the extent relief, if any, is granted, has determined it is in the interest of justice to excuse the applicant's failure to timely file.  In all other respects, there are insufficient bases to waive the statute of limitations for timely filing.

2.  The applicant enlisted in the Regular Army (RA) 30 March 2010.  She indicated she was enlisting for the U.S. Army Officer/Warrant Officer program and the U.S. Army Incentive Enlistment Program (LRP).

3.  In connection with this enlistment, she executed Annex B (Statement for Enlistment, U.S. Army Enlistment Program) under the Army LRP.  In Section 3 (Associated Options) she acknowledged that she understood the following:

   a.  Repayment will be made only after each successful year of active duty that she performs commencing on the date of her enlistment in the RA.

   b.  She understands that repayment amounts paid by the government are subject to Federal and State income taxes as taxable income each year payment is made.

   c.  She understands that interest (even interest re-capitalized into principal) will not be repaid.  She also understands that she will not be reimbursed for payments she makes or has already made to her lenders.

   d.  She understand that under the Army Student LRP, the Army will not repay loans in excess of $65,000.00 regardless of the amount of her student loans.  She further understands that she is required to make all interest payments of her student loan during her enlistment.  
4.  She was honorably discharged on 2 August 2010 for the purpose of accepting a commission as a warrant officer.  She was appointed as a Reserve warrant officer one of the Army on 3 August 2010.

5.  She provides: 

   a.  A Federal Truth in Lending Disclosure Key Alternative Loan document, dated 11 August 2004, which shows the amount of credit provided to her by Great Lakes Educational Loan Services, Inc., was $17,000.00

   b.  A Federal Truth in Lending Disclosure Key Alternative Loan document, dated 20 May 2005, which shows the amount of credit provided to her by Great Lakes was $5,485.00.

   c.  A Federal Truth in Lending Disclosure Key Alternative Loan document, dated 5 September 2006, which shows the amount of credit provided to her by Great Lakes was $8,000.00.

   d.  A check from Key Education Resources, dated 27 January 2006, made out to her in the amount of $10,390.00.

   e.  A Federal Truth in Lending Disclosure Key Alternative Loan document, dated 8 January 2007, which shows the amount of credit provided to her by Great Lakes was $8,207.00.

   f.  A Federal Truth in Lending Disclosure Key Alternative Loan document, dated 1 October 2007, which shows the amount of credit provided to her by Great Lakes was $6,000.00.

   g.  A Federal Truth in Lending Disclosure Key Alternative Loan document, dated 21 January 2008, which shows the amount of credit provided to her by Great Lakes was $9,315.00.

   h.  A letter from Great Lakes, dated 23 January 2008, wherein she was reminded that she was responsible for the interest which accrues on her Alternative loan(s).  The letter also advised her of the following:

* Unsubsidized principal was		$63,983.34 @8.210%
* Total Accrued Interest was			$7,515.69
* Balance as of Today's Date was 	$71,499.03

   i.  A memorandum, dated 3 March 2011, from Chief, Education Incentives Branch, HRC, wherein she was advised, in effect, she was required to make one copy of the DD From 2475 (DOD Educational LRP Annual Application), write in her borrower's name on the letter, then mail the letter to her lender along with a copy of the DD Form 2475.  Each lender must complete Section 4 of the form and then return the completed form to that officer.  The Army would not pay on any loan prior to receiving all necessary loan verification information from her loan holder.  If was her responsibility to follow-up and ensure that the Army had received all required and completed DD Forms 2475.  The Army does not assume her loan and she remained responsible for payment and the status of the loan.

   j.  A letter, dated 8 March 2011, from the Chief, Education Incentives Branch, HRC, addressed to the Lender/Loan Holder and stated the applicant had contracted for the Army LRP and under that program the Army would repay up to $65,000.00 of the total remaining original unpaid principal borrowed on the individual's qualifying loans.  That portion or amount of a qualifying loan that could be repaid was 33 1/3 percent or $1,500.00, whichever is greater, after each completed year of active duty.  Payments authorized under the LRP are intended for principal only.  Payments are not authorized for interest, including capitalized interest.

   k.  A letter, dated 4 March 2013, from Great Lakes, wherein she was advised her unpaid balance as of 25 February 2013 was $11,805.18.  The document also contains two handwritten entries stating her payoff balance as of 11 March 2013 was $11,821.54 and as of 18 November 2013 was $12,112.71.

6.  In an advisory opinion, dated 7 January 2014, the Section Chief, Finance and Incentives Team, HRC, recommended disapproval of the applicant's request.  The HRC official stated:

   a.  The applicant entered active duty on 30 March 2010, with the LRP as part of her enlistment agreement.  The Army will repay up to one third of the total remaining original unpaid principal, less taxes of all qualifying loans after a Soldier completed each year of active duty.

   b.  Before the Army makes any loan repayments, loan verification information from the current loan holders must be provided to that office.  Verification of the applicant's loans serviced by Great Lakes was received in that office in May 2011.  According to the information provided, the total remaining original unpaid principal verified was $43,681.83.  Their records indicate payments totaling $43,681.83, less taxes ($31,276.00 is the amount after tax) were authorized over a period of 3 years.

   c.  The applicant provided a statement from Great Lakes as proof the total remaining original unpaid principal in January 2008 was $63,983.34; however, payments were being made on the account, so in May 2011 the total remaining original unpaid principal listed on the statement was $43,080.96.

   d.  It is unfortunate that the applicant thinks she was misled; however, the LRP is a good program and repays thousands of qualifying student loans.  A review of the applicant's official military personnel file was conducted.  She signed the enclosed Annex E, which indicated she understood the Army would not reimburse her for payments made to the lender and that payments authorized under the LRP are considered taxable in the year paid.

   e.  Public Law 99-145 and regulatory guidance (U.S. Army Recruiting Command Regulation 621-1 (Concurrent Admissions Program) and Army Regulation 621-202 (Army Educational Incentives and Entitlements) also precludes the reimbursement of payments already made.  There are no exceptions to the law and the regulations make no provisions for waiving the requirements.  When an individual signs a contract for the LRP, that individual assumes personal responsibility for compliance with the criteria.  A change in law would have to occur to deem payments authorized under the LRP as reimbursable.

7.  On 8 January 2014, the advisory opinion was forwarded to the applicant for acknowledgment and/or rebuttal.  She did not respond.

8.  Army Regulation 621-202 sets the Army-unique policies, responsibilities, and procedures for administering veterans’ education programs and education incentives authorized by law.  Public Law 99-145 section 2171, authorizes the LRP.  The regulation states the LRP Soldiers earn the first loan repayment after completion of a full year of enlisted service.  For each year of initially contracted service, the Army will repay 33 1/3 percent or $1,500, whichever is greater, on the remaining outstanding principal balance as stated on the promissory note.  The Army will not pay more than the outstanding principal amount borrowed or the principal balance remaining when the Soldier enters on active duty.  The Army will make payments directly to the lender.

9.  Public Law 99-146, section 2171, states 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 (20 U.S.C. 1071 et seq.); or "(B) or any loan made under part E of such title (20 U.S.C. 1087aa et seq.).  Repayment of any such loan shall be made on the basis of each complete year of service performed by the 

borrower.  The Secretary may repay loans described in the case of any person for service performed on active duty as an enlisted member in a military specialty specified by the Secretary.  The portion or amount of a loan that may be repaid is 33 1/3 percent or $1,500, whichever is greater, for each year of service.

DISCUSSION AND CONCLUSIONS:

1.  The Finance and Incentives Team, HRC, has verified payments totaling $31,276.20 (amount after tax) were authorized for the applicant over a period of three years.  The law and regulatory guidance specifies the Army will repay up to repay 33 1?3 percent or $1,500, whichever is greater, on the remaining outstanding principal balance as stated on the promissory note.  

2.  The applicant’s contentions and the documentation she submitted were carefully considered.  The evidence shows she acknowledged she understood the Army would not reimburse her for payments she already made to the lender and that authorized payments were considered taxable in the year paid.  There are no provisions for the Army to pay the entire $65,000.00 which would negate the applicant's responsibility for repayment of her portion.  

3.  She did not provide sufficient evidence showing the Army erroneously and unjustly denied her payments to her student loan under the LRP.  A change in law would be required to authorize any repayment greater than 33 1/3 percent on any remaining outstanding principal balance or deem payments already made as reimbursable.  Therefore, she is not entitled to the requested relief.

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)                                         AR20130021987





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ABCMR Record of Proceedings (cont)                                         AR20130021987



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