PROCEEDINGS

	IN THE CASE OF:  

	BOARD DATE:           29 April 1999                   
	DOCKET NUMBER:   AC98-07826
   AR1998014503

	I certify that hereinafter is recorded the true and complete record of the proceedings of the Army Board for Correction of Military Records in the case of the above-named individual.  

	Mr. Loren G. Harrell		Director	
	Mrs. Nancy Amos		Analyst	

  The following members, a quorum, were present:

	Ms. Ann M. Campbell		Chairperson	
	Mr. Edwin S. Castle		Member	
	Mr. Christopher J. Prosser		Member	

	The applicant and counsel if any, did not appear before the Board.

	The Board considered the following evidence:

	Exhibit A - Application for correction of military 
                records
	Exhibit B - Military Personnel Records (including
	            advisory opinion, if any)

FINDINGS:

1.  The applicant has exhausted or the Board has waived the requirement for exhaustion of all administrative remedies afforded by existing law or regulations.

2.  The applicant requests reimbursement of his student loans in the amount of $5,750.00.

3.  The applicant states that when he entered the Army he was told that his student loan paperwork was completed and he did not have anything to worry about.  In 1994, he received notices that his loans would go into default if he did not start making arrangement for payment.  His education center contacted the U. S. Total Army Personnel Command (PERSCOM) for assistance but was unable to help him because PERSCOM had no record of his being in the Loan Repayment Program (LRP).  He paid for the student loans that should have been paid by the Army.

4.  The applicant’s military records show that he entered the Delayed Entry Program on 30 August 1991.  His DA Form 3286-66, Statement of Understanding, United States Army Incentive Enlistment Program, shows that he enlisted for the LRP.  On this form, he acknowledged that under the LRP the government would repay a designated portion of any loan he incurred that was made, insured or guaranteed under Part B of the Higher Education Act of 1965 or any loan under Part E of such act after 1 October 1975 and before he enlisted into the Regular Army.  DD Form 1966/1, section 21, block 51, shows code “L.”  He enlisted in the Regular Army on 30 December 1991.  Prior to entry on active duty, he had obtained two Stafford Student Loans both in the amount of $2,625 ($5,250.00 total).

5.  On 12 June 1995, the education specialist at Fitzsimons Army Medical Center requested PERSCOM provide copies of DD Forms 2475 so the applicant could initiate repayment of his college loans.  Apparently, the applicant never received these forms.

6.  The applicant paid off his student loans on 7 February 1996.

7.  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.  

8.  Army Regulation 601-202 prescribes Army-unique policies, responsibilities and procedures for the administration of veterans’ education programs and education incentives authorized by law.  In pertinent part, it states that the U. S. Army Recruiting Command ensures the accuracy of DD Form 1966/1, section 21, block 51.  Code “L” is used to show that the enlistee meets LRP eligibility criteria and possesses promissory notes.  Code “N” shows LRP ineligibles.  Code “U” is used if the soldier enlists for the LRP but did not possess the promissory note at the time of enlistment.

9.  Army Regulation 601-202 also provides that the U. S. Army Recruiting Command (USAREC) will provide to the Commander, PERSCOM, within 5 working days of the soldier’s accession, the LRP contract, the loan promissory note, DD Forms 1966/1 and 1966/4, DD Form 2366, and the deferment letter.  PERSCOM will forward to the applicant a letter of instructions and DD Form 2475 and create a suspense folder to ensure the soldier had received the packet.

10.  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.

11.  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.”

12.  In the processing of this case, an advisory opinion was obtained from the Chief, Education Incentives Branch, PERSCOM.  That office recommended disapproval of the applicant’s request.  There are no provisions or guidance which allow the Department of the Army to reimburse an individual for payments already made.  Public Law precludes the authorization of payments toward interest and the reimbursement of payments made.

13.  This opinion was provided to the applicant for comment/rebuttal.  He did not respond within the timeframe given but replied to a telephonic inquiry on 19 April 1999 (SEE ATTACHED).  (The Fitzsimons education center no longer exists; personnel at the Fort Carson education center did not know the whereabouts of the Fitzsimons specialist who was assisting the applicant.)
CONCLUSIONS:

1.  The evidence of record shows that the applicant enlisted in the Regular Army for the Loan Repayment Program incentive on 30 December 1991.  He had obtained two qualifying student loans prior to his entry on active duty and they were not in default prior to his entry on active duty.  The evidence shows that he was qualified for the LRP and that his loans qualified.  Under normal circumstances, his loans should have been repaid by 30 December 1994.

2.  The Board concludes that USAREC failed to provide the Commander, PERSCOM the applicant’s LRP contract and related documents.  Because of this failure, PERSCOM then failed to forward to the applicant a letter of instructions and DD Form 2475.  The advisory opinion verifies this conclusion by noting “…proof of soldier’s eligibility for the LRP was enclosed…” (provided by the Fitzsimons Army Medical Center education specialist).  The Board therefore concludes that the applicant was unaware of the procedures he had to follow to request repayment of his student loans and was unaware that his loans were in danger of default until he was notified.  The Board concludes he took appropriate steps to have the government pay his loans per his enlistment contract and, when such steps failed, he took the necessary steps to pay the loans himself to avoid hurting his credit rating.

3.  The applicant’s military records may be corrected to show his DA Form 3286-66, Statement of Understanding, US Army Incentive Enlistment Program, was amended to include the sentence “If a student loan is accepted by the officials processing you for enlistment as payable under the LRP and the government fails to properly process paperwork associated with enrollment in the LRP and such failure results in nonpayment of the loan by the LRP, 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.”  This would allow the Board to invoke that provision and pay him the amount his lending institution would have been paid under the LRP.

4.  In view of the foregoing, it would be in the interest of justice to correct the applicant’s records as recommended below.

RECOMMENDATION:

1.  That the DA Form 3286-66, Statement of Understanding, US Army Incentive Enlistment Program, be amended to include the sentence “If a student loan is accepted by the officials processing you for enlistment as payable under the LRP and the government fails to properly process paperwork associated with enrollment in the LRP and such failure results in nonpayment of the loan by the LRP, 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.

2.  That in accordance with Title 10, U. S. Code, section 1552, the Defense Finance and Accounting Service shall remit payment to the individual concerned of $5,250.00, the principal amount of his student loans, as a result of the foregoing correction.

3.  That so much of the application that is in excess of the foregoing be denied.

BOARD VOTE:  

__AMC___  __ESC__  __CJP__  GRANT AS STATED IN RECOMMENDATION

________  ________  ________  GRANT FORMAL HEARING

________  ________  ________  DENY APPLICATION

			Ann M. Campbell
		______________________
		        CHAIRPERSON

INDEX

CASE ID	AC98-07826/AR1998014503	
SUFFIX		
RECON		
DATE BOARDED	19990429	
TYPE OF DISCHARGE		
DATE OF DISCHARGE		
DISCHARGE AUTHORITY		
DISCHARGE REASON		
BOARD DECISION	(GRANT)	
REVIEW AUTHORITY		
ISSUES         1.	128.00	
2.		
3.		
4.		
5.		
6.