MEMORANDUM OF CONSIDERATION

	IN THE CASE OF:   

	BOARD DATE:           6 September 2001
	DOCKET NUMBER:   AR2001055166

	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. Luther L. Santiful		Chairperson	
	Mr. Melvin H. Meyer		Member	
	Mr. John T. Meixell		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 pay him $980 to cover the interest accrued due to late payment of his student loans.

APPLICANT STATES:  In effect, that his enlistment contract states that the Army will repay 33 and 1/3 percent of the unpaid principal balance of his student loans for each year of active Federal service.  He contends that no payments were made on his behalf until 14 months following the first anniversary of his enlistment.  In support of his application, he submits DA Form 5123-R (Reassignment Records Checklist); DD Forms 4/1, 4/2 and 4/3 (Enlistment/Reenlistment Document); Orders 212-00029, dated 31 July 1998; DA Form 3286-66 (Statement of Understanding); excerpts from Army Regulation 621-202 pertaining to the Loan Repayment Program; and a payment history of the Missouri Student Loan Program.         

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

The applicant entered the delayed entry program on 14 April 1998.  His records show that he enlisted for the U.S. Army Cash Bonus Enlistment Option/Loan Repayment Program.  He enlisted in the Regular Army on 21 May 1998 for a period of 4 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-4.  The applicant also stated that he is scheduled to be discharged on 20 May 2002.      
In the processing of this case an advisory opinion was obtained from the Acting Chief, Education Incentives and Counseling 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 stated in Public Law 99-145, Section 671(a)(1).  This is further defined in the contents of the DA Form 3286-66 that the applicant signed upon enlisting.  

The opinion also stated that the applicant was sent a DD Form 2475 (DOD Educational Loan Repayment Program Annual Application) in October 1998 with reminders approximately every six months.  The Education Incentives and Counseling Branch was contacted on the applicant’s behalf on 11 January 2000 and another DD Form 2475 was sent to him.  

The opinion noted that payments can only be authorized on student loans that have been verified (DD Form 2475) by the loan holder.  The completed DD Form 2475 from Missouri Student Loan Program was received in April 2000 and Southwest Missouri State University in January 2001.  Since the applicant had already completed his first two years of active duty, multiple payments fell in the same tax year.  DA Form 3286-66, Section 4e, also states, “I understand that repayment amounts paid by the government are subject to Federal and State income tax as taxable income each year payment is made”.

The opinion further noted that in accordance with Army Recruiting Command Regulation 621-1, the Army will not pay loans that are in default.  Army Regulation 621-202, Chapter 3, Section 3-5 also stipulates the Army will not repay loans or portions of loans that are in default; however, this office made an exception to policy to grant repayment toward the remaining original unpaid principal on all of the applicant’s defaulted loans.

In conclusion, the Acting Chief of the Education Incentives and Counseling Branch stated that the Army does not assume an individual’s loan.  The individual remains responsible for loan status.  Public Law prohibits payment toward interest on any portion of loans or 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.  Public Law 99-145, Section 671(a)(1) precludes the authorization of payments toward interest or the reimbursement of payments made.

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 considered the applicant’s contention that no student loan payments were made on his behalf until 14 months following the first anniversary of his enlistment.  However, the advisory opinion points out that the applicant was provided an application for the loan repayment program (DD Form 2475) in October 1998 with reminders every six months and that payments can only be authorized on student loans that have been verified by the loan holder via a DD Form 2475.  The advisory opinion also points out that a completed DD Form 2475 was not received until April 2000, almost two years after the applicant’s entry on active duty.  

2.  The Board also noted the applicant’s request that the Army pay him $980 to cover the interest accrued due to late payment of his student loans.  However, Public Law 99-145, Section 671(a)(1) precludes the authorization of payments toward interest or the reimbursement of payments made.

3.  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.

4.  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

LLS____  MHM_____  JTM____  DENY APPLICATION

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

INDEX

CASE ID	AR2001055166	
SUFFIX		
RECON		
DATE BOARDED	20010906	
TYPE OF DISCHARGE		
DATE OF DISCHARGE		
DISCHARGE AUTHORITY	 	
DISCHARGE REASON		
BOARD DECISION	(DENY)	
REVIEW AUTHORITY		
ISSUES         1.	129.1400	
2.		
3.		
4.		
5.		
6.