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ARMY | BCMR | CY2015 | 20150003332
Original file (20150003332.txt) Auto-classification: Approved

	

		BOARD DATE:	  11 June 2015

		DOCKET NUMBER:  AR20150003332 


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 removal of the $11,500 debt that the Defense Finance and Accounting Service (DFAS) alleges he owes based on Student Loan Repayment Program (SLRP) payments made while serving in the Utah/California Army National Guard (UT/CAARNG). 

2.  The applicant states after 3 years of service (March 1997 to March 2000) in the UTARNG, he signed a 3-year contract, leaving him with 6 years to secure the SLRP incentive as well as the GI Bill to complete his bachelor’s and master’s degrees.  He faithfully attended drills and completed his annual training each year with his unit.  He also provided, each year, his unit with the SLRP contract and promissory notes.  After verification, payments were made directly to his lender (Nelnet).  He never received payments directly to him.  He was discharged in 2006 which led DFAS to establish a debt against him.  A month after receiving the DFAS letter, he began paying $409.02 (since March 2014).  He believes the money that he has paid should be returned to him.  His medical bills have been mounting due to his ongoing cancer treatment.  He plans to go through a bone marrow transplant to remove the cancer and he will then be isolated in his house for 2 to 3 months. 

3.  The applicant provides:

* Assignment orders
* National Guard Bureau (NGB) Form 22 (Report of Separation and Record of Service)
* Medical documents 
* DFAS correspondence
* ARNG correspondence
* Email exchange
* DD Forms 2475 (DOD Educational Repayment Program Annual Application)
* College transcripts and diplomas
* Selected records from his official military personnel file (OMPF) 

CONSIDERATION OF EVIDENCE:

1.  The applicant's records show he enlisted in the UTARNG for a period of 8 years on 27 March 1997.  He agreed to serve as a member of the Selected Reserve (SELRES) for 6 years and as a member of the Individual Ready Reserve (IRR) for the balance of his 8-year contractual agreement.  His expiration of term of service (ETS) date was established as 26 March 2003. 

2.  He entered active duty for training (ADT) on 9 October 1997 and completed required training for award of military occupational specialty (MOS) 74C (Telecommunications Center Operator).  He was honorably released from ADT on 17 August 1998. 

3.  He was assigned as a Communications Noncommissioned Officer (NCO), Unit Identification Code (UIC) WTN6D0, Support Company, 1st Battalion, 19th Special Forces Group (Airborne), Camp Williams, UT, effective 1 June 1998. 

4.  On 27 March 2000, the applicant executed a 3-year extension in the UTARNG.  His new ETS date was established as 26 March 2006.  His DA Form 4836 (Oath of Extension of Enlistment or Reenlistment) states he was eligible for the SLRP and Enlistment Kicker.  In connection with this extension, he signed Annex S (SLRP Addendum).  He stated/acknowledged he: 

* was a prior service applicant who had completed the last 3 consecutive years in the ARNG; he held the primary MOS for which he was reenlisting/extending 
* was extending in a valid position and the critical skill MOS of 74C for which Headquarters, Department of the Army (HQDA) had authorized the SLRP and he must remain in the contracted MOS for the entire period of his extension/reenlistment contract
* had 1 loan in the amount of $11,000; the total amount of repayment for qualifying loans will not exceed $10,000 plus accrued interest
* the SLRP incentive would be terminated if he voluntarily transferred out of the contracted MOS and/or SLRP eligible unit
* the SLRP incentive would be terminated if he reached the maximum allowable amount for repayment ($10,000)

5.  He also signed Annex K (ARNG Montgomery GI Bill Kicker Program Addendum) and acknowledged his understanding of the rules associated with this incentive.  He indicated that he:

* was a prior service applicant who had completed the last 3 consecutive years in the ARNG and he holds the primary MOS for which he is reenlisting/extending 
* would be assigned to a high priority unit, Support Company, 1st Battalion, 19th Special Forces, UIC: WTN6D0

6.  On 1 April 2002, he transferred from his contracted position to the position of Range Communications NCO, in MOS 11B (Infantryman), UIC W8BDA2, Detachment 2, Utah State Area Command (STARC), Riverton, UT. 

7. On 2 April 2002, he was promoted to sergeant (SGT)/E-5 in MOS 74C, while assigned to Detachment 2, Utah STRAC.  The promotion orders listed his Duty MOSD as 74C. 

8.  On 25 November 2003, he requested and was approved for an interstate transfer from the UTARNG to the CAARNG.  Accordingly, on 9 December 2003 UTARNG published Orders 343-011 transferring him from the position of Range Communications NCO, Training Site Command, Riverton, UT, to the position of Telecommunications Center Operator, UIC W8AYAA, Headquarters, State Area Command, Sacramento, CA, in MOS 74C, effective 25 November 2003.     

9.  On 1 March 2005, he requested and was approved for an interstate transfer from the CAARNG to the NYARNG.  Accordingly, on 13 April 2005, NYARNG published Orders 103-1049 transferring him from the position of Communication Center NCO, UIC WQQRTO, Joint Force Headquarters, Sacramento, CA, to an unknown position in the NYARNG, Latham, NY, effective 1 March 2005. 

10.  On 6 October 2005, he was assigned to the 204th Engineer Battalion, NYARNG.  However, he remained in an excess position, apparently due to an unresolved medical condition. 

11.  He was honorably discharged from the NYARNG on 26 March 2006 by reason of expiration of term of service.  His NGB Form 22 shows he completed a total of 9 years in the ARNG.  
12.  On 24 February 2014, by letter, DFAS notified him that the organization that maintained his pay account had advised DFAS he was indebted to DOD for an amount resulting from overpayment of SLRP benefits. 

13.  On 20 August 2014, by memorandum, an official at the CAARNG Soldier Incentives Assistance Center (SIAC) stated: 

	a.  The applicant provided National Student Loan Data System for Students (NSLDS) detail and summary sheets which failed to support the validity of his SLRP claim.  He was eligible to contract for SLRP at the signature date of the contract and DA Form 4836.  He terminated his bonus eligibility when he transferred to an 11B duty position in a TDA UIC (W8BDA2) effective 20020401 in violation of ARNG Selected Reserve Incentive Policy (SRIP) 00-02.  He was eligible for 2 years of payment at the time of termination, at a rate of $1,500 per year served for a total of $3,000.  

	b.  He was paid $4,500.00 from the UTARNG and $10,000 from the CAARNG against this SLRP incentive.  He was paid over the maximum program limit of $10,000.00 over the period of the contract in violation of Army Regulation 135-7 (ARNG Incentives Program), paragraph 5-1.  He is subject to a recoupment of $11,500.00 in accordance with ARNG enlistment incentive recoupment action.

	c.  The applicant is eligible to request an exception to policy (ETP) or file a claim with the Army Board for Correction of Military Records (ABCMR).  The CAARNG SlAC will proceed with adjusting the debt to the amount of $11,500 in accordance with CAARNG SIAC operating procedure regarding settlement action.  

14.  On 28 August 2014, he submitted a DD Form 2788 (Waiver/Remission of Indebtedness Application).  He requested a waiver of recoupment of $14,500, of the unearned portion of his SLRP incentive.  He highlighted his enlistment, extension, service, achievements, academic record, awards and decorations, and employment.  He contended that the recoupment of this amount is in error and that it was contractually agreed upon.  He requested the debt be removed. 

15.  On 12 February 2015, the Defense Office of Hearings and Appeals (DOHA), Defense Legal Services Agency, rendered an appeal decision in his case.  The decision states: 

a. It is in reference to DFAS letter, dated 21 November 2014, forwarding the 
applicant's claim of the United States against [Applicant].  He requested waiver of 
the claim in the amount of $14,500.00 under the provisions of Title 10, U.S. Code, section 2774, and recommended DOHA waive a portion of the claim.  On 11 December 2014, DOHA requested further information in order to properly adjudicate the case.  On 20 January 2015, DFAS provided some of the requested information, but upon further review of the file DFAS had determined that the claim against the applicant is $11,500 not $14,500.  As such, DOHA would adjudicate the case with the information available. 

	b.  The record shows that on 27 March 1997, the applicant enlisted in the UTARNG for a term of 8 years.  On 27 March 2000, he voluntarily extended his enlistment through 26 March 2006 and signed an SLRP Addendum, enrolling himself in the Army's SLRP for loan repayment up to $10,000.  During the period March 1999 through March 2003, the U.S. Army made payments to his student loan lender in the total amount of $7,000.  On 26 March 2003, he reenlisted in UTARNG for a term of three years.  Under the Oath of Extension of Enlistment or Reenlistment, he accepted SLRP and an Enlistment Kicker.  However, he was only authorized an additional $3,000 under his prior enlistment contract and enrollment in the SLRP.  The UTARNG subsequently made payments to his student loan lender in the amount of $4,500.  Therefore, he exceeded the maximum allowable for repayment ($10,000) under the SLRP by $1,500.  The record further shows that he transferred from the UTARNG to the CAARNG on 25 November 2003.  DFAS advised that the CAARNG subsequently made payments to his student loan lender in the total amount of $10,000.  Therefore, the total claim against the applicant is $11,500.  

	c.  Section 2774 of Title 10, USC, provides authority for waiving claims for erroneous payments of pay and certain allowances made to or on behalf of members or former members of the uniformed services, if collection of the claim would be against equity and good conscience and not in the best interests of the United States.  Generally, these criteria are met by a finding that the claim arose from administrative error with no indication of fraud, fault, misrepresentation, or lack of good faith on the part of the member or any other person having an interest in obtaining the waiver.  

	d.  While this office has the authority to consider certain claims of the United States for waiver under the provisions of 10 USC, section 2774, it cannot consider a debt for waiver unless it arose from an erroneous payment of payor allowances.  The debt here did not arise from "payor allowances" as that term is used in Title 10, USC, section 2774(a) because educational expenses are not considered "payor allowances."  

	e.  Although the government erroneously continued to repay [Applicant's] student loans after he was no longer eligible to participate in the SLRP (when he reached the maximum amount of $10,000 payable under the program), student loan repayments do not fall into the category of "military pay," which is another term for pay and allowances or salary.  DOHA further notes that SLRP payments are made directly to the member's lender.  Therefore, the erroneous repayment of his student loans does not constitute military payor salary for services rendered.  Thus, the claim of the United States against [Applicant] involved here may not be considered for waiver under Title 10, USC, section 2774 because it did not arise from erroneous payments of pay or allowances.

	f.  Although DOHA has no authority to consider this debt for waiver under Title 10, USC, section 2774, this does not preclude [Applicant] from pursuing other available remedies.  In this regard, DOHA notes that the express statutory authority for the Secretary of Defense to repay a reserve member's student loan is found in Title 10, USC, section 16301.  Under section 16301(h), a member who fails to complete the period of service required to qualify for loan repayment (including transferring out of the specialty that made him eligible under the SLRP) is subject to the repayment provisions of Title 37, USC, section 303a(e). However, under Title 37, USC, section 303a(e), the Secretary concerned (in this case, the Secretary of the Army) has the discretion to determine if the member's repayment of the unearned portion of the bonus or similar benefit is appropriate based on whether repayment would be contrary to a personnel policy or management objective, would be against equity and good conscience, or would be contrary to the best interests of the United States.  The applicant may wish to pursue this remedy with the appropriate authorities.  In fact, DOHA notes that on 20 August 2014, the CAARNG advised him that he is eligible to request an ETP or file a claim with the ABCMR.  In regards to filing a claim with the ABCMR, DOHA has searched decisions on the ABCMR's website and found hundreds of decisions on SLRP.   

	g.  Finally, [Applicant] may request reconsideration of this appeal decision, but must send the written request for reconsideration, including any documentation that the claimant wishes the DOHA Claims Appeals Board to consider, within 30 days (or longer for good cause shown). 

16.  An advisory opinion was received from the National Guard Bureau (NGB) on 6 April 2015.  The Chief, Personnel Policy Division, recommended approval of the applicant's request and stated the applicant requests relief of recoupment from the SLRP to DFAS in the amount of $11,500.  The NGB recommends approval.  

	a.  On 27 March 1997, he enlisted in the UTARNG for 8 years.  On 27 March 2000, he voluntarily extended his enlistment through 26 March 2006 and contracted SLRP for a loan repayment up to $10,000.  From March 1999 through March 2003, the Army made SLRP payments in the amount of $7,000 of the original (first) $10,000.  On 1 April 2002, he was transferred into a TDA unit.  He qualified for two payments in the amount of $1,500 each year prior to termination of the incentive on 1 April 2002.  The stipulation to continue SLRP eligibility was for the applicant to be slotted in a deployed unit.  

	b.  On 26 March 2003, [Applicant] reenlisted in the UTARNG for 3 years, accepting SLRP and an Enlistment Kicker.  He was only authorized an additional $3,000 under his prior enlistment contract and enrollment in the SLRP.  UTARNG continued to make loan payments in the amount of $4,500, exceeding the maximum allowable repayment of $10,000 under the (first) SLRP by $1,500.  On 25 November 2003, he transferred to CAARNG.  On 1 November 2012, CAARNG certified original SLRP debt of $14,500.  On 20 August 2014, CAARNG SIAC re-audited Soldier for (second) $10,000.  On 18 December 2014, a credit to the U.S. Property and Fiscal Office (USPFO) for CAARNG in the amount of $3,000 was completed, bringing down the total amount owed by him to $11,500.  

	c.  DOHA Claim No. 2014-WV-11xxxx, dated 12 February 2015, reads, “The reconsideration request is untimely and the appeal decision of 15 December 2010, is the final decision of the Department of Defense (DOD) with respect to a waiver under Title 10, U.S. Code, section 2774 (10, USC, section 2774).  See DOD Instruction 1340.23, ~ E8.10.  Thus, $3,333.33 of the government's claim is waived: $3,008.88 for the portion of the bonus representing the period between March 7, 2006, and August 12, 2007, in which the member was authorized to continue drilling with his Reserve unit plus $324.45 representing the erroneous IDT payment.  As noted, the remaining $10,833.34 may not be considered for waiver under 10 USC, section 2774, but the member may wish to pursue waiver of this amount with the Secretary of the Army." 

	d.  Title 37, USC 373(b)(1) reads, "Discretion to provide exception to termination and repayment requirements.— Pursuant to the regulations prescribed to administer this section, the Secretary concerned may grant an exception to the repayment requirement and requirement to terminate the payment of unpaid amounts of a bonus, incentive pay, or similar benefit if the Secretary concerned determines that the imposition of the repayment and termination requirements with regard to a member of the uniformed services would be contrary to a personnel policy or management objective, would be against equity and good conscience, or would be contrary to the best interests of the United States."  Although the Soldier transferred from the UTARNG to CAARNG, that he was continually receiving SLRP payments after ineligibility is no fault of his own.  The incentive process failed him.  

	e.  Title 10, Section 16301 (b-c) reads, "The portion or amount of a loan that may be repaid under subsection (a) is 15 percent or $500, whichever is greater, for each year of service, plus the amount of any interest that may accrue during the current year.  If a portion of a loan is repaid under this section for any year, interest on the remainder of the loan shall accrue and be paid in the same manner as is otherwise required.  For the purposes of this section, any interest that has accrued on the loan for periods before the current year shall be considered as within the total loan amount that shall be repaid."  

	f.  DOD Financial Management Regulation, 7000.14-R, chapter 2 reads, "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 required conditions.  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." 

	g.  The NGB Incentives Branch has reviewed this recommendation and supports DODI FMR, 7000.14-R, chapter 2.  The CAARNG concurs with this recommendation to provide relief from recoupment.

17.  The applicant was provided with this advisory opinion on 6 April 2015, but he never responded or provided a rebuttal within the allotted time.

18.  Title 10, USC, section 2774 (Claims for overpayment of pay and allowances and of travel and transportation allowances) states a claim of the United States against a person arising out of an erroneous payment of any pay or allowances made before, on, or after 2 October 1972, or arising out of an erroneous payment of travel and transportation allowances, to or on behalf of a member or former member of the uniformed services, the collection of which would be against equity and good conscience and not in the best interest of the United States, may be waived in whole or in part by the Secretary concerned. 

19.  DODI 1340.23 (Waiver Procedures for Debts Resulting from Erroneous Pay and Allowance) states it is DoD policy that waiver applications for debts resulting from erroneous payments of pay and allowances (hereafter referred to as “waiver applications”) be processed according to all pertinent statutes, regulations, and other relevant authorities.   

	a.  E2.1.3. Debt.  An amount an individual owes the Government as the result of erroneous payments of pay and allowances (including travel and transportation allowances) to or on behalf of members of the Uniformed Services or civilian DoD employees.

	b.  E2.1.5. Erroneous Payment.  A payment that is not in compliance with applicable laws or regulations.

	c.  E8.10. Finality of A DOHA Appeal Decision.  An appeal decision that grants the waiver application to the extent requested on appeal, or that finds that the application was timely received, when applicable, is a final action when issued.  An appeal decision is a final action if the DOHA does not receive a request for reconsideration within 30 days of the date of the appeal decision (plus any extension of up to 30 additional days granted by the DOHA for good cause shown).  NOTE: In the case of a DOHA appeal decision issued before the effective date of this Instruction that denied all or part of the waiver application, a request for reconsideration by the General Counsel (GC), DOD may be submitted within 60 days of the effective date of this Instruction.  The GC DOD shall consider such requests and affirm, modify, reverse, or remand the DOHA appeal decision.  Requests for reconsideration by the GC, DOD received more than 60 days after the effective date of this Instruction shall not be accepted.  

DISCUSSION AND CONCLUSIONS:

1.  The applicant enlisted in the UTARNG for an 8-year term on 27 March 1997. On 27 March 2000, he voluntarily extended his enlistment through 26 March 2006.  He signed an SLRP Addendum, enrolling himself in the Army's SLRP for loan repayment up to $10,000.  On 1 April 2002, he was transferred into a TDA unit, thus breaching the contractual agreement to serve for 6 years in the deployed unit.  He qualified for only two payments in the amount of $1,500 each year prior to termination of the incentive on 1 April 2002.  The stipulation to continue SLRP eligibility was for the applicant to be slotted in a deployed unit.

2.  During the period March 1999 through March 2003, the Army made payments to his student loan lender in the total amount of $7,000.  He reenlisted in the UTARNG for a 3-year term on 26 March 2003.  His DA Form 4836 shows he accepted SLRP and an Enlistment Kicker.  However, he was only authorized an additional $3,000 under his prior enlistment contract and enrollment in the SLRP. The UTARNG continued to make payments to his student loan lender in the amount of $4,500.  Therefore, he exceeded the maximum allowable for repayment ($10,000) under the SLRP by $1,500.  

3.  He transferred from the UTARNG to the CAARNG on 25 November 2003.  DFAS advised that the CAARNG made payments to his student loan lender in the total amount of $10,000.  In November 2012, CAARNG certified his original SLRP debt of $14,500.  However, in August 2014, CAARNG SIAC re-audited his account for (second) $10,000 and in December 2014, a credit to the USPFO for CAARNG in the amount of $3,000 was completed, bringing down the total amount owed by the applicant's SLRP in the amount of $11,500.  

4.  The applicant was fully qualified to contract for the $10,000 incentive when he extended on 27 March 2000.  Because he transferred to the TDA unit on 1 April 2002 in violation of the SRIP and because the maximum SLRP payment per year is $1,500, the applicant qualified for two anniversary payments of $1,500 each for a total of $3,000.  

5.  By the time he transferred to CAARNG, he had received $14,500 for a $10,000 incentive.  As such, the original debt was established as $14,500.  However, upon re-auditing his account in August 2014, CAARNG submitted a credit of $3,000 and thus the debt was reduced to $11,500.  

6.  Because he originally enlisted in the SELRES for 6 years and his lender had already received $3,000 for two anniversary payments of $1,500 each, had he remained in the unit he contracted for and served the remaining 4 years, he would have qualified for an additional $6,000 ($1,500 per year).  

7.  From a statutory and regulatory standpoint, this is a valid debt and it is not in error.  However, as a matter of equity only, he should be relieved of recoupment of only $6,000 of the debt.  His records should be corrected to show he submitted an exception to policy to the NGB to waive a portion of his debt in the amount of $6,000 and the NGB timely received, processed, and approved his request to waive a portion ($6,000) of his total debt ($11,500).   

BOARD VOTE:

________  ________  ________  GRANT FULL RELIEF 

____X____  __X______  ___X_  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 partial relief.  As a result, the Board recommends that all Department of the Army and State National Guard records of the individual concerned be corrected by:   

* showing the applicant submitted an exception to policy to the NGB for a waiver of a portion of his debt in the amount of $6,000 and the NGB timely accepted and approved his request 
* auditing his pay records and crediting to his account the amount of $6,000 as a result of this correction

2.  The Board further determined that the evidence presented was insufficient to warrant a portion of the requested relief.  As a result, the Board recommends denial of so much of the application that pertains to waiving the entire debt of $11,500. 



      _______ _   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)                                         AR20150003332



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ABCMR Record of Proceedings (cont)                                         AR20150003332



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