PROCEEDINGS

	IN THE CASE OF:       

	BOARD DATE:           30 OCTOBER 2001                  
	DOCKET NUMBER:   AR2001056240

	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. Deborah L. Brantley		Senior Analyst	

  The following members, a quorum, were present:

	Ms. Celia L. Adolphi 		Chairperson	
	Mr. Arthur A. Omartian		Member	
	Mr. Harry B. Oberg		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, reimbursement for a student loan which he paid that should have been paid under his Student Loan Repayment Program (SLRP) enlistment incentive.  The applicant states, in effect, that one of his enlistment incentives was the SLRP.  He notes that the “Army did not repay [his] Federal Stafford Loan….”  He states that he ultimately received notification from the Sallie Mae Loan Servicing Corporation that if he did not repay his loan it would be placed in a “default status.”  He did not want this to happen because it would affect his top secret clearance status and make him ineligible to remain in his primary specialty (37F-Psychological Operations Specialist).  As such, he states that he repaid the loan in full.  In support of his request he submits a copy of his loan account and a copy of his check, in the amount of $16,414.94, which he paid to the Sallie Mae Loan Servicing Corporation.  His check is annotated “full payment.”

3.  Records available to the Board indicate the applicant enlisted on 25 January 1997 for a period of 4 years.  At the time of his enlistment the applicant completed several enlistment forms indicating that the Student Loan Repayment Program was one of his enlistment incentives.  

4.  As part of the applicant’s enlistment processing, he initialed a DA Form 3286-66 (Statement of Understanding United States Army Incentive Enlistment Program) indicating that he understood “that under this program (LRP) that the government will repay a designated portion of any loan I incurred that was made, insured or guaranteed, under Part B of the Higher Education Action of 1965 (Guaranteed Student Loan) or any loan under Part E of such act (National Direct Student Loan) after 1 October 1975 and before I enlist into the Regular Army.”  Repayment would not exceed $65,000.

5.  In the processing of this case, an advisory opinion from the Education Incentives and Counseling Branch at the U.S. Total Army Personnel Command (PERSCOM) was obtained.  They indicated, in effect, that the applicant was required to complete a loan verification document, which would in turn be submitted via the loan holder back to PERSCOM, before annual loan payments could be made.  PERSCOM indicated that the applicant accomplished this task for an education loan from State University of New York but there was no indication that he had ever completed the loan verification document for his education loan managed by Sallie Mae.  Hence PERSCOM paid the applicant’s State University of New York loan (totaling $4,900) but no payments were ever made to the Sallie Mae Servicing Corporation.  PERSCOM recommended the applicant’s petition for reimbursement be denied because he never submitted the loan verification documents and reimbursement after the fact was not authorized. 

6.  A member of the Board’s staff obtained telephonic clarification on the loan repayment process from PERSCOM.  An official at PERSCOM indicated that once a soldier enlisted under a SLRP incentive they were forwarded a DD Form 2475 (DOD Educational Loan Repayment Program Annual Application).  The soldier completed his portion of the form and then was instructed to forward the form to his lending institution.  After the lending institution verified the loan that institution was suppose to return the completed form to PERSCOM and PERSCOM would authorize a loan payment.  The official indicated that it was the soldier’s responsibility to ensure that the lending institution completed their portion of the form and returned it to PERSCOM.  The official from PERSCOM did state that the “Stafford” loans managed by the Sallie Mae Serving Corporation did meet the eligibility requirements for payment under the SLRP.

7.  Documents provided by the applicant indicate that in May 2000 he had an outstanding loan principal in the amount of $16,481.91.  On 17 July 2000 he paid the Sallie Mae Serving Corporation $16,414,94 and annotated the check as “full payment Loan #113-70-0582-1.”

8.  On 25 February 2001, at the conclusion of his enlistment contract, he was released from active duty with an honorable characterization of service in pay grade E-5 and transferred to the USAR (U.S. Army Reserve).  His application to this Board was initiated in February 2001.

9.  Army Regulation 621-202 establishes the policies and provisions for administration of the LRP.  Public Law 99-145, Section 2171, authorizes the LRP. The LRP is an enlistment incentive designed to increase Test Score Category    l-IIIA accessions.  The LRP is an educational enlistment incentive that provides for payment of 33 1/3 percent or $1,500.00, whichever is greater, of the unpaid principal of eligible student loans for each year of active duty a soldier completes. An AFQT score of “50” or higher, is a prerequisite.

10.  Title 10, U.S. Code, Section 2171, limits loans that are eligible for repayment under the LRP to those made, insured, or guaranteed under the Higher Education Act of 1965.

11.  Title 10, U.S. Code, Section 1552, the law which provides for the Board states that “The Secretary may pay, from applicable current appropriations, a claim for the loss of pay, allowances, compensation, emoluments, or other pecuniary benefits, or the repayment of a fine or forfeiture, if, as a result of correcting a record under this Section, the amount is found to be due the claimant on account of his or another’s service in the Army, Navy, Air Force, Marine Corps or Coast Guard, as the case may be.”

CONCLUSIONS:

1.  The evidence of record confirms the applicant was eligible for and enlisted in the Army with the understanding that he would receive the SLRP as an enlistment option.
2.  Based on the fact that one of his loans was paid (State University of New York) under the SLRP, as indicated in the advisory opinion, the Board concludes that the applicant likely was furnished the DD Form 2475 for both lending institutions (State University of New York and Sallie Mae Serving Corporation).  What is unclear from available evidence is what became of the DD Form 2475 for the Sallie Mae Serving Corporation.  However, the Board concludes that had the applicant been completely familiar with the processing requirement for repayment of his student loans he would have followed the progress of the DD Form 2475 to the Sallie Mae Serving Corporation to ensure that it was returned to PERSCOM for finalization and payment of his annual loan installment.  The fact that he did nothing until notified that the loan would be in default tends to support a conclusion that he was not familiar with the intricacies of the processing requirements under the SLRP.  

3.  Notwithstanding the advisory opinion from PERSCOM, the applicant enlisted in good faith expecting to receive benefits under the SLRP and should not be penalized merely because he failed to monitor the payment process.  To deny payment of his loan would not be fair or equitable.

4.  The obvious lack of knowledge that the applicant had for the SLRP process has created a financial injustice for the applicant.  To correct this injustice, the applicant’s military records may be corrected to show that his DA Form 3286-66 included the sentence “If a student loan is accepted by the officials processing you for enlistment, or subsequent to enlistment by the Army Board for Correction of Military Records (ABCMR), as payable under the SLRP and it is later discovered that it was not paid because appropriate administrative processing steps were not accomplished to ensure timely payment, the ABCMR may pay the loan(s), or any portion of the loan(s), at its sole discretion, in accordance with Title 10, U.S.C., Section 1552.”  Invoking this provision allows the Board to reimburse the applicant the amount he paid the lending institution which the lending institution would otherwise have been paid under the SLRP.

5.  The Sallie Mae Servicing Corporation student loan was verified as eligible for repayment under the Higher Education Act of 1965.  Although there is a difference in the total principal amount owed and the amount the applicant actually paid, the Board accepts the applicant’s payment as correct for reimbursement purposes.

6.  In view of the foregoing, the applicant’s military records should be corrected as recommended below.

RECOMMENDATION:

That all of the Department of the Army records related to this case be corrected:

a.  by amending his DA Form 3286-66,  to include the sentence “If a student loan is accepted by the officials processing you for enlistment, or subsequent to enlistment by the Army Board for Correction of Military Records (ABCMR), as payable under the SLRP and it is later discovered that it was not paid because appropriate administrative processing steps were not accomplished to ensure timely payment, the ABCMR may pay the loan(s), or any portion of the loan(s), at its sole discretion, in accordance with Title 10, U.S.C., Section 1552;” and

b. by directing that as a result of the foregoing correction and in accordance with Title 10, U. S. Code, Section 1552, the Defense Finance and Accounting Service (DFAS) shall remit payment to the applicant of the amount of $16,414.94.

BOARD VOTE:  

__CLA__  __AAO __  __HBO__  GRANT AS STATED IN RECOMMENDATION

________  ________  ________  GRANT FORMAL HEARING

________  ________  ________  DENY APPLICATION

		____Celia L. Adolphi___
		        CHAIRPERSON

INDEX

CASE ID	AR2001056240	
SUFFIX		
RECON	YYYYMMDD	
DATE BOARDED	20011030	
TYPE OF DISCHARGE	(HD, GD, UOTHC, UD, BCD, DD, UNCHAR)	
DATE OF DISCHARGE	YYYYMMDD	
DISCHARGE AUTHORITY	AR . . . . .  	
DISCHARGE REASON		
BOARD DECISION	GRANT 	
REVIEW AUTHORITY		
ISSUES         1.	128.00	
2.		
3.		
4.		
5.		
6.