MEMORANDUM OF CONSIDERATION

	IN THE CASE OF:   

	BOARD DATE:            21 September 2000                  
	DOCKET NUMBER:   AR2000042544

	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	
	Mrs. Nancy Amos		Analyst	

  The following members, a quorum, were present:

	Ms. JoAnn H. Langston		Chairperson	
	Mr. Curtis L. Greenway		Member	
	Mr. Eric N. Andersen		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 he be repaid one-third of his student loan as guaranteed by his enlistment contract.

APPLICANT STATES:  That he enlisted for the Loan Repayment Program (LRP) which was to pay one-third of his $50,723.91 student loan which he obtained through the U. S. Navy when he enrolled as a member of the Health Professions Scholarship Program.  In December 1999, he submitted the paperwork necessary to start his loan repayment to his lender, the Defense Finance and Accounting Service – Denver Center (DFAS-DE).  He was subsequently informed repayment was denied because the loan was considered to be through the Reserve Officer Training Corps (ROTC).  DFAS-DE sent him a reworded promissory note but repayment of his loan was still denied.  Because of the size of his debt, even paying $550 a month on the loan, he would still owe $35,000 at the end of his 4-year enlistment.  That was not acceptable so he initiated paperwork to be separated by reason of an unfulfilled enlistment contract.  However, he still feels the Government owes him what was promised in his contract, which was a legal and binding document.  

COUNSEL STATES:  Counsel makes no statement.

EVIDENCE OF RECORD:  The applicant's military records are not available.  Information contained herein was obtained from documents provided by the applicant.

On 24 March 1998, the applicant signed a promissory note to pay the United States, through DFAS-DE, the principal amount of $50,723.91.

On 4 June 1998, the applicant enlisted in the Regular Army for 4 years and       17 weeks.  His Statement for Enlistment, DA Form 3286-59, shows that he enlisted for the U. S. Army Incentive Enlistment Program – Loan Repayment Program up to $65,000.00.  His Statement of Understanding, United States Army Incentive Enlistment Program, DA Form 3286-66, is not available but it would reflect that 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.

In 1999, the applicant applied to have his loan repaid under the LRP.  DFAS-DE had completed a DOD Educational Loan Repayment Program (LRP) Annual Application, DD Form 2475 and forwarded it to the U. S. Total Army Personnel Command (PERSCOM) for payment.  Item 8 of the DD Form 2475 noted the type of loan as “ROTC.”  The Education Incentives Branch, PERSCOM denied that request because the loan was not made, insured or guaranteed under Title IV, Part B or E of the Higher Education Act of 1965.

The applicant attempted to get the DD Form 2475 corrected because he was never an ROTC student, he was enrolled in the Health Professions Scholarship Program.  His request for repayment was still denied because the loan was still not made, insured or guaranteed under Title IV, Part B or E of the Higher Education Act of 1965.

On 24 January 2000, the applicant requested separation under the provisions of Army Regulation 635-200, chapter 7 for unfulfilled enlistment contract.  His request was approved (the approval is not available) and on or about                25 February 2000 he was honorably discharged.  His Report of Separation or Transfer, DD Form 214, is not available.

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.  

Army Regulation 635-200 sets forth the basic authority for the separation of enlisted personnel from the Regular Army.  Chapter 7, section IV discusses defective or unfulfilled enlistment or reenlistment agreements.  It states that an enlisted soldier will be discharged when a defective enlistment or reenlistment agreement exists under three circumstances.  One circumstance is when a material misrepresentation is made by recruiting or retention personnel on which the soldier reasonably relied and thereby was induced to enlist or reenlist with a commitment for which the soldier was not qualified.  An unfulfilled enlistment commitment exists when the soldier received a written enlistment commitment from recruiting personnel for which the soldier was qualified but which cannot be fulfilled by the Army and the soldier did not knowingly take part in the creation of the unfulfilled enlistment commitment.

In the processing of this case, an advisory opinion was obtained from the Education Incentives and Counseling Branch, PERSCOM (SEE ATTACHED). The opinion referenced its previous correspondence and reiterated that the loan for which the applicant was requesting payment was not an authorized loan under the meaning of the Higher Education Act of 1965.  The loan was through the Department of Navy Health Professions Scholarship Program and not made, insured or guaranteed under Title IV, Part B, D, or E of the Higher Education Act of 1965.  There were no exceptions to the law; therefore, payment could not be made toward the student loan. 

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

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, it is concluded:

1.  A Government error was made when the applicant was told his loans qualified for the Education Incentives Program.

2.  There is a regulatory remedy for correcting the type of error made by the Government in this case and that is to request discharge for a defective enlistment agreement.  The applicant did request separation (although he requested separation due to unfulfilled enlistment agreement, his circumstances actually fell under the criteria for a defective enlistment agreement) and he was discharged on or about 25 February 2000.  It would not be appropriate at this point to grant the relief requested when the applicant could not then fulfill his military obligation.

3.  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

__jhl___  __clg___  __ena___  DENY APPLICATION

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

INDEX

CASE ID	AR2000042544	
SUFFIX		
RECON		
DATE BOARDED	20000921	
TYPE OF DISCHARGE		
DATE OF DISCHARGE		
DISCHARGE AUTHORITY		
DISCHARGE REASON		
BOARD DECISION	(DENY)	
REVIEW AUTHORITY		
ISSUES         1.	128.00	
2.		
3.		
4.		
5.		
6.