PROCEEDINGS

	IN THE CASE OF:     

	BOARD DATE:           9 November 2000                  
	DOCKET NUMBER:   AR2000035779

	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. Carl W. S. Chun
Mr. Walter Avery, Jr.		                        Director
                        Analyst	

  The following members, a quorum, were present:

	Ms. Jennifer L. Prater		Chairperson	
	Ms. Barbara J. Lutz		Member	
	Mr. Orville W. Troesch, Jr.		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 that the Army repay his law student loan under the Loan Repayment Program (LRP).

3.  The applicant states he was misled, that he entered into a legal contract with the Army under the agreement that all of his loans would be repaid.  It was not until after he entered the service that he was informed that one of his student loans would not be repaid.  Prior to enlisting, he was employed as a schoolteacher.  It was the inducement of having up to $65,000 dollars of his student loan debt paid by the Army that led him to enlist.  If he had known that his law student loan was not eligible for repayment, he would not have enlisted.  He is asking that he not be penalized nor held liable for a mistake made by the recruiter, an agent of the Army.

4.  The applicant’s military records show that he enlisted in the Army on 21 July 1998 for a period of four years.  His enlistment contract shows that he enlisted under the incentive enlistment program LRP, and that the government would pay up to $65,000.00 of his student loans.  He signed a statement of understanding on 21 July 1998, the pertinent portion of which states:  “I understand that under this program (LRP) that the government will repay a designated portion of any loan I incurred that was made, insured or guaranteed, under Part B of the Higher Education Act of 1975 (Guaranteed Student Loan) or any loan under Part E of such act (National Direct Student Loan) after 1 October 1975 and before I enlist into the Regular Army.”  The applicant is currently a specialist four on active duty.

5.  In a 27 May 1999 letter to the applicant, the Chief of the Education Incentives Branch, US Total Army Personnel Command notified him that his law student loan did not qualify for repayment under the loan repayment program, and should he feel that an injustice had occurred he should apply to this Board for relief.

6. The LRP 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. 
7. 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.

8.  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”.

9.  In the processing of this application an advisory opinion was obtained from the Chief of the Education Incentives Branch, who stated that Public Law confirms loans eligible for repayment, and that there was no exceptions to the law, and payment could not be made toward his law student loan. 

10.  This opinion was provided to the applicant for comment/rebuttal.  He reiterated that he enlisted solely for the LRP and that neither the recruiter nor Military Entrance Processing Station (MEPS) personnel informed him that his law student loan was ineligible for repayment under the LRP.  Had he known that all of his loans did not qualify for the LRP, he would not have enlisted. 

CONCLUSIONS:

1.  The applicant’s contention that he was promised that all of his student loans, to include his law student loan, would be paid is credible.  The Board agrees with the applicant that he made a contract in good faith with the government that he would enlist in the Army for 4 years, with the understanding that the government would pay all his student loans, to include his law student loan.  It would be unfair and unjust to the applicant if the Army did not now keep its portion of the contract as approved and prepared by its representatives.

2.  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 verify that all student loans accepted actually are eligible under the Higher Education Act of 1965 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.

3.  In view of the foregoing, the applicant’s records should be corrected as recommended below.

RECOMMENDATION:

That all of the Department of the Army records related to this case be corrected by: 

a.  amending the DA Form 3286-66, Statement of Understanding, US Army Incentive Enlistment Program, 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 verify that all student loans accepted actually are eligible under the Higher Education Act of 1965 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; and

b.  directing that as a result of the foregoing correction and in accordance with Title 10, U. S. Code, section 1552, the Defense Finance and Accounting Service (DFAS) shall remit payment to the applicant of the total amount of her loans to which she is entitled as a result of this correction at the appropriate rate and at the appropriate time. The applicant will be required to submit the appropriate evidence (promissory notes, etc.) to DFAS to determine the amount due.

BOARD VOTE:  

__jlp____  ___bjl___  ___owt __  GRANT AS STATED IN RECOMMENDATION

________  ________  ________  GRANT FORMAL HEARING

________  ________  ________  DENY APPLICATION

		__________Jennifer L. Prater_____
		        CHAIRPERSON

INDEX

CASE ID	AR2000035779	
SUFFIX		
RECON	YYYYMMDD	
DATE BOARDED	20001109	
TYPE OF DISCHARGE	(HD, GD, UOTHC, UD, BCD, DD, UNCHAR)	
DATE OF DISCHARGE	YYYYMMDD	
DISCHARGE AUTHORITY	AR . . . . .  	
DISCHARGE REASON		
BOARD DECISION	GRANT	
REVIEW AUTHORITY		
ISSUES         1.		
2.		
3.		
4.		
5.		
6.