PROCEEDINGS

	IN THE CASE OF: 

	BOARD DATE:            6 February 2001                      
	DOCKET NUMBER:   AR2000042148

	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		Director	
	Ms. Rosa M. Chandler		Analyst	

  The following members, a quorum, were present:

	Mr. Raymond V. O’Connor Jr.		Chairperson	
	Mr. Walter T. Morrison		Member	
	Mr. Thomas Lanyi		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 in effect, that her student loans be paid in accordance with her enlistment option for the Army Loan Repayment Program (LRP). 

3.  The applicant states in effect, that she joined the Army to take advantage of the LRP.  Throughout the recruiting process, both her recruiter and the Military Entrance Processing Station (MEPS) cadre led her and her family to believe that her student loans would be repaid in accordance with the LRP.  She was not informed that her student loans were not eligible for repayment under the LRP until she tried to obtain a deferment while she was in basic training.  She submits copies of two loan agreements issued by the New Jersey Higher Education Assistance Authority totaling $12,375.00 (interest rate 7.63 percent) and 
$15, 643.00 (interest rate 6.9 percent), respectively and documentation showing that she had a William D. Ford Federal Direct Loan Program (Stafford Loan) agreement totaling $6,125.00 in 1998.  Her father also writes a letter in support of her request.  He affirms her contentions that she provided the necessary paperwork concerning her loans to the appropriate recruiting authorities and that she was misled to believe that her loans were eligible for repayment under the LRP.

4.  The applicant’s DA Form 3286-66 (Statement of Understanding-US Army Incentive Program) shows that on 29 September 1999 she enlisted in the Delayed Entry Program (DEP) and that her enlistment options includes Option 9A, which is the US Army Training Enlistment Program, and Option 9C, which is the Loan Repayment Program.  

5.  On 17 November 1999, she was discharged from the DEP and she enlisted in the Regular Army (RA) for 6 years and training in military occupational specialty 
91X (Mental Health Specialist).  The US Army Recruiting Command, Mid-Atlantic Operations Division has confirmed that the applicant submitted the three college loan repayment contracts at the time of enlistment.  Information available to the Board shows that the Defense Finance and Accounting Service (DFAS) has only certified entitlement to repayment of the Stafford Loan, now totaling $5,817.37,  under the LRP.  A current payment of $1,939.12 has been authorized by the DFAS towards the Stafford Loan.  

6.  In connection with her application, the Total Army Personnel Command (PERSCOM) opined, in essence, that the terms of the LRP were outlined in the applicant’s enlistment contract (DA Form 3286-66) which she signed.  Her DA Form 3286-66 indicates that she acknowledged that she understood the terms outlined in Section 4, which are that the Army would only repay loans that she incurred prior to enlistment in the RA that were insured or guaranteed under Part B of the Higher Education Act of 1975 (Guaranteed Student Loan (GSL)) or any loan under Part E of the (National Direct Student Loan (NDSL)) after October 1975.  In addition, Public Law 99-145, Section 671(a)(1) confirms that loans eligible for repayment must be made under Title IV, Part B, D, or E of the Higher Education Act. 

7.  The PERSCOM recommends disapproval of the applicant’s request, because her New Jersey College Loans are not made, guaranteed, or insured under Title IV, Part B, D, or E of the Higher Education Act of 1965. 

8.  The above advisory opinion was referred to the applicant for comment or rebuttal, but she has failed to respond.

9.  Correspondence from the Department of the Army, Office of the Deputy Chief of Staff for Personnel, dated 2 February 1998; Subject: LRP Education Enlistment Incentive shows that all student loans agreements are to be reviewed by recruiting personnel prior to enlistment of a soldier to ensure that the soldier knows exactly which loans qualify for repayment prior to enlistment in the Delayed Program.  No soldier is allowed to ship for basic training without this verification.

10.  The LRP is an educational enlistment incentive which provides for payment of 33 1/3 percent or $1,500.00 of the unpaid principal of eligible student loans, whichever is greater, for each year of active duty a soldier completes.  The applicant’s recruiter wrote on her DD Form 3286-66 that her loan contract was "Not to exceed $65,000."

11.  Title 10, U.S. Code, section 127, Emergency and Extraordinary Expenses, states that the Secretary of a military department may provide for any emergency or extraordinary expense which cannot be anticipated or classified.  When approved by the Secretary, funds may be spent for any purpose he determines to be proper and such a determination is final and conclusive upon the accounting offices of the United States.

CONCLUSIONS:

1.  The applicant, based on information provided by her recruiter that her New Jersey College Loans were covered under the LRP, made her decision to enlist.  Subsequently, it has been determined this information was wrong.

2.  As noted by PERSCOM, the contested loans are state loans that are not insured under the Higher Education Act of 1965 and do not fall within the Act.  Therefore, there are no Army records that the Board can correct that would allow the repayment of the applicant’s loans under the LRP.

3.  Notwithstanding the above, there is no evidence to indicate that the applicant was ever clearly told that her state assisted loans were not repayable under the LRP.  Evidence available shows that she provided the appropriate loan agreements to her recruiter.  Her father supports her contention that she was told by Army/MEPS personnel that her loans qualified for repayment.

4.  Therefore, the Board believes that equity requires the Army to pay these loans.  As such, the Board concludes that such repayments would fall within the purview of Title 10, U.S. Code, section 127, as emergency or extraordinary expenses which could not be anticipated or classified. 

5.  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 paying the two student loans guaranteed under the New Jersey Higher Education Assistance Authority in the amount of the original loans, with accrued interest, that would have been paid to the lending intuition(s) in accordance with the LRP as if those loans had been insured under the Higher Education Act of 1965.  

BOARD VOTE:  

__rvo___  __wtm___  __tl_____  GRANT AS STATED IN RECOMMENDATION

________  ________  ________  GRANT FORMAL HEARING

________  ________  ________  DENY APPLICATION

		__Raymond V. O’Connor Jr.___
		        CHAIRPERSON

INDEX

CASE ID	AR2000042148	
SUFFIX		
RECON	YYYYMMDD	
DATE BOARDED	20010206	
TYPE OF DISCHARGE	(N/A)	
DATE OF DISCHARGE	(N/A)	
DISCHARGE AUTHORITY	(N/A)	
DISCHARGE REASON		
BOARD DECISION	(GRANT)	
REVIEW AUTHORITY		
ISSUES         1.		
2.		
3.		
4.		
5.		
6.