MEMORANDUM OF CONSIDERATION

	IN THE CASE OF:      

	BOARD DATE:            23 August 2001                 
	DOCKET NUMBER:   AR2001055356

	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	
	Mr. Lee Cates		Analyst	

  The following members, a quorum, were present:

	Mr. John H. Kern		Chairperson	
	Ms. Paula Mokulis		Member	
	Mr. Thomas Lanyi		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: In effect, that the interest for his student loan be paid by the government for his entire Loan Repayment Program (LRP) enlistment.

APPLICANT STATES: That his attorney has shown him a copy of the Federal law which prevents payment of interest on his LRP loans.  He indicates he was mislead and not shown these Federal statutes at the time of enlistment, and he was induced to enlist based on the misrepresentations of Federal law.  Therefore, he is entitled to have the interest paid.  He submits a copy of Title 10, United States Code (USC), Section 16301, and the portion of his enlistment contract pertaining to a statement of understanding for The Army’s student LRP (US Army Recruiting Command (USAREC) Form 1150).

COUNSEL CONTENDS: Counsel is employed by The Army and provides no contentions.

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

On 21 January 1999, the applicant was enlisted in The Army Reserve Delayed Enlistment Program in pay grade E-4.

On 24 February 1999, he was enlisted in the Regular Army in pay grade E-4 for 
4 years and the Training Enlistment Program for military occupational specialty 12B (Combat Engineer) and Incentive Enlistment Program for the Student Loan Repayment Program of up to $65,000 and a cash bonus of $11,000.

The LRP is a Departmental enlistment option authorized by Public Law 99-145, Section 671(a)(1).  It specifies, among other things, that no interest, default or any other charges will be repaid by the Army.

Army Regulation 621-202, Army Educational Incentives and Entitlements, 
prescribes Army-unique policies, responsibilities, and procedures for the administration of veterans' education programs and education incentives authorized by law.  It provides information on chapter 30, Title 38, USC, All-Volunteer Force Educational Assistance Program (referred to as the Montgomery GI Bill (MGIB)); the Loan Repayment Program (LRP); chapter 32, Title 38, USC, Post-Vietnam Era Veterans' Educational Assistance (referred to as HEAP); the Army College Fund (ACF), and the fiscal year 1979 to FY 81 Department of Defense Test Incentive Programs.  Eligibility requirements specify that LRP soldiers earn the first loan repayment after completion of a full year of enlisted service; that for each year of initially contracted service, the Army will repay 
33 1/3 percent or $1,500, whichever is greater, on the remaining outstanding principal balance as stated on the promissory note; and the Army will not pay more than the outstanding principal amount borrowed or the principal balance remaining when the soldier enters active duty.

Title 10, USC, Section 16301 provides for the student LRP for enlisted personnel serving in the Selected Reserve.  This section does not apply to the applicant.  Title 10, USC, Section 2171 provides for the student LRP for enlisted personnel serving on active duty.  It does not specify government payment of loan interest.

The USAREC Form 1150, Statement of Understanding, was signed by the applicant on 21 January 1999.  It specifies “I further understand that I am required to make the interest payments on my student loan during my first year of enlistment.  In addition, I understand that I must bring copies of ALL my student loan promissory notes when I report to the MEPS [Military Enlistment Processing Station] for my active duty ship date.”

The Statement of Understanding (Department of The Army Form 3286-66) signed and initialed by the applicant upon his enlistment, concerning the LRP specifies that “the portion or amount of loan that may be repaid is 33 1/3 percent or $1,500, whichever is greater, of the unpaid principal balance for each year of service completed.”

A Personnel Command (PERSCOM) Information Paper number 3-96, dated August 1997, was published providing information concerning the policy and laws related to the LRP.  Among other things, it specifies that no loan interest will be repaid by the Army.

On 3 May 2001, the Acting Chief, Education Incentives and Counseling Branch, PERSCOM opined that Public Law 99-145, Section 671(a)(1) precludes the authorization of payments toward interest and the reimbursement of payments made.

On 10 May 2001, the PERSCOM opinion was forwarded to the applicant for his acknowledgement/rebuttal.  He did not respond.

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.  The applicant is not entitled to payment of his loan interest by the government.  The regulations and policy in effect at the time precludes payment of loan interest by the government under the LRP.

2.  The applicant states he was not aware at the time that the interest was not payable by the government.  He states he relied on misleading information from his enlistment counselor and an enlistment form showing he was only to pay the loan interest for the first year.  He does not state what he would have otherwise done at the time had he realized that he had to continue to pay the loan interest.
3.  The applicant has not shown he was induced to enlist based on misrepresentations of Federal law.  All references and the preponderance of evidence concerning the LRP show loan repayments are made based on principal amounts only and that no interest will be paid by the Army.  Also, it is noted the applicant signified this understanding by his initials and signature on his enlistment documents concerning his LRP enlistment option.

4.  The Board notes the applicant’s misunderstanding at the time, and the poor wording of the statement addendum to his enlistment showing he was required to make the interest payments on his student loan during his first year of enlistment. However, it did not specify the government was required to make all of the necessary interest payments, and it did not relieve him of his LRP responsibilities, including payment of his loan interest.  The Board also notes that had the applicant realized at the time that the interest would not be paid by the government, it is probable he would have continued his enlistment for the options he received.

5.  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.

6.  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

_pm_____  _jhk____  _tm___       DENY APPLICATION

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

INDEX

CASE ID	AR2001055356	
SUFFIX		
RECON		
DATE BOARDED	20010823	
TYPE OF DISCHARGE		
DATE OF DISCHARGE		
DISCHARGE AUTHORITY		
DISCHARGE REASON		
BOARD DECISION	Deny	
REVIEW AUTHORITY		
ISSUES         1.	112.12	
2.		
3.		
4.		
5.		
6.