MEMORANDUM OF CONSIDERATION

	IN THE CASE OF:   

	BOARD DATE:            2 November 2000                  
	DOCKET NUMBER:   AR2000036126

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

	Mr. Carl W. S. Chun		Director	
	Ms. Wanda L. Waller		Analyst	

  The following members, a quorum, were present:

	Mr. Fred N. Eichorn 		Chairperson	
	Mr. Ted S. Kanamine 		Member	
	Mr. William D. Barr 		Member	

	The Board, established pursuant to authority contained in 10 U.S.C. 1552, convened at the call of the Chairperson on the above date.  In accordance with Army Regulation 15-185, the application and the available military records pertinent to the corrective action requested were reviewed to determine whether to authorize a formal hearing, recommend that the records be corrected without a formal hearing, or to deny the application without a formal hearing if it is determined that insufficient relevant evidence has been presented to demonstrate the existence of probable material error or injustice.

	The applicant requests correction of military records as stated in the application to the Board and as restated herein.

	The Board considered the following evidence:

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

APPLICANT REQUESTS:  That the Army repay his student loans under the Student Loan Repayment Program (SLRP).  

APPLICANT STATES:  That at the time of his enlistment, it was explained to him that the Army would pay up to fifty thousand dollars in student loans.  He contends that he had only approximately twelve thousand dollars in loans.  He goes on to state that through the SLRP, the Army was supposed to pay one third of his student loans after each year that he completed on active duty, with the balance being paid after the third year.  However, after the third year, he found out that the Army was not going to pay the interest on the loans, which totaled about five thousand dollars.  He states that he feels the Army should pay his student loans in full, that it was never explained to him that he would be left with a balance of over five thousand dollars, and he was assured that his loans would be paid off under the SLRP.  He also contends that his total was far less than the amount allotted to soldiers under the program, and had he known that the interest would not get paid, he may have seen more of a benefit to enlist under the GI Bill.  In support of his application, he submits a copy of his enlistment contract and other documentation provided at the time of his enlistment.   

EVIDENCE OF RECORD:  The applicant's military records show:

The applicant entered the delayed entry program on 30 January 1996.  His DA Form 3286-59 (Statement for Enlistment) shows that he enlisted for the U.S. Army Incentive Enlistment Program – Loan Repayment Program.  His DA Form 3286-67 (Statement of Understanding) shows he enlisted for the Loan Repayment Program.  He enlisted in the Regular Army on 23 April 1996 for a period of 5 years.  

At the time the applicant submitted his application to the Army Board for Correction of Military Records, he was serving on active duty in pay grade E-5.  The applicant also stated that he is scheduled to be discharged on 
22 April 2001.      

In 1997, the applicant applied to have three student loans repaid under the SLRP.  The Education Incentive Branch, U.S. Total Army personnel Command denied these requests because the loans were in default. 

In the processing of this case an advisory opinion was obtained from the Chief, Education Incentives Branch, U.S. Total Army Personnel Command.  That office recommends disapproval of the applicant’s request.  

The opinion points out that under ideal circumstances, the portion or amount of a qualifying loan that may be repaid is 33 1/3 percent or $1500, whichever is 

greater, toward the remaining original unpaid principal amount borrowed after each completed year of active duty as states in Public Law 99-145, Section 671(a)(1).  This is further defined in the contents of the Statement of Understanding United States Army Incentive Enlistment Program, DA Form 3286-66, that the applicant signed upon enlisting.  

The opinion also referenced its previous (1997) correspondence and reiterated that the loans for which he was requesting payment were in default and that payments cannot be authorized toward defaulted loans.  The opinion did note that the applicant’s loan status changed and payment was authorized toward the remaining original unpaid principal as verified by the loan holder.  

The opinion further noted that the Statement of Understanding US Army Incentive Enlistment Program, DA Form 3286-66, item 4d, the applicant signed upon enlistment states that the applicant must secure a military deferment or maintain his loans in good standing.  Individuals enlisting with the LRP as part of their enlistment agreement may be eligible for military deferment for all loans incurred prior to 1 July 1993 and forbearance for all loans incurred on or after 1 July 1993.  Promissory notes for loans covered under the Higher Education Act of 1965 specifically list circumstances for which an individual may become eligible for deferment.  Requests for deferment or forbearance are not within the purview of the Education Incentives Branch and are the sole responsibility of the borrower.  In conclusion, the Chief of the Education Incentives Branch states that the Army does not assume an individual’s loan; the individual remains responsible for payment and the status of the loan.  Public Law 99-145, Section 671(a)(1) precludes the authorization of payments toward interest and the reimbursement of payments made.  

A copy of the advisory opinion was provided to the applicant for comment.  He did not respond within the given time frame.

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.

DISCUSSION:  Considering all the evidence, allegations, and information presented by the applicant, together with the evidence of record, applicable law and regulations, and advisory opinion(s), it is concluded:

1.  The Board noted the applicant’s contention that it was explained to him that the Army would pay fifty thousand dollars in student loans.  The Board also noted his contention that the Army was to pay one third of his loans after each year that he completed on active duty with the balance being paid after the third year. However, the applicant has provided no evidence to support these contentions. 

2.  The applicant’s contention that after his third year he found out that the Army was not going to pay the interest on his student loans which totaled approximately five thousand dollars, appears to be without merit.  Evidence of record shows that after the applicant’s first year on active duty, he applied to have three student loans repaid under the LRP and these requests were denied because the loans were in default.  The applicant was notified in writing on two separate occasions that Public Law 99-145, Section 671 (a)(1), precludes the authorization of payments toward interest. 

3.  The applicant did enlist for the Loan Repayment Program.  However, evidence of record shows that the applicant’s student loans were in default in 1997.  In accordance with Army regulations, the Army will not pay loans which are in default and the Army will not repay loans or portions of loans that are in default.  Also, Public Law 99-145, Section 671 (a)(1), precludes the authorization of reimbursement of payments made.

4.  In order to justify correction of a military record the applicant must show to the satisfaction of the Board, or it must otherwise satisfactorily appear, that the record is in error or unjust.  The applicant has failed to submit evidence that would satisfy this requirement.

5.  In view of the foregoing, there is no basis for granting the applicant's request.

DETERMINATION:  The applicant has failed to submit sufficient relevant evidence to demonstrate the existence of probable error or injustice.

BOARD VOTE:

________  ________  ________  GRANT

________  ________  ________  GRANT FORMAL HEARING

FNE____  TSK_____  WDB____  DENY APPLICATION

		    Carl W. S. Chun
		    Director, Army Board for Correction
    of Military Records

INDEX

CASE ID	AR2000036126	
SUFFIX		
RECON		
DATE BOARDED	20001102	
TYPE OF DISCHARGE		
DATE OF DISCHARGE		
DISCHARGE AUTHORITY	  	
DISCHARGE REASON		
BOARD DECISION	(DENY)	
REVIEW AUTHORITY		
ISSUES         1.	112.1200	
2.		
3.		
4.		
5.		
6.