MEMORANDUM OF CONSIDERATION

	IN THE CASE OF:   

	BOARD DATE:           28 March 2002                   
	DOCKET NUMBER:   AR2002067710

	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:

	Mr. Fred N. Eichorn		Chairperson	
	Mr. Lester Echols		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:  That the Army pay her loan repayment fees, interest, and collection costs.

APPLICANT STATES:  That she enlisted in 1994 for the Loan Repayment Program (LRP).  She was advised to send a loan deferment form to the loan holder and that the deferment would last for three years.  The Army would repay that loan over that three-year period assuming that she continued to serve on active duty during that time.  She sent the deferment form to the loan company, provided a copy to the Army, and assumed that the Army was taking the action agreed to pursuant to the terms of her enlistment contract.  She learned in September 2001 that the Army had not paid her loan as agreed.  She received a statement from the Department of Education stating she was delinquent.  Her Brigade Reenlistment Counselor advised her to resubmit a copy of her original enlistment contract and a DOD Educational Loan Repayment Program (LRP) Annual Application, DD Form 2475, to the Education Incentives and Counseling Branch, U. S. Total Army Personnel Command (PERSCOM).  In October 2001, she received a letter from a collection agency stating that her account had been turned over to them.  Realizing that the Army had not yet corrected its error, she obtained assistance from the Inspector General for the U. S. Army Recruiting Command.  They intervened on her behalf, but the Education Incentives and Counseling Branch stated they would repay the principal amount of the loan but refused to pay any fees, interest, or other costs associated with her loan.  She performed all acts requested of her by the Army and required by the terms of her enlistment contract.  She was never advised to sign a form periodically advising PERSCOM that she was still a member in good standing and the terms of her enlistment contract did not require her to do so.  Had she been so advised she would have done so.  She believes it would be unjust and a violation of the terms of her enlistment contract to be burdened with having to repay interest, fees, and other costs which arose from the Army’s error.  

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

She was born on 28 November 1962.  In 1991, she obtained a Stafford Loan in the amount of $1,958.00.

The applicant entered the Delayed Entry Program on 25 March 1994.  Her DA Form 3286-66, Statement of Understanding, United States Army Incentive Enlistment Program, shows that she enlisted for the LRP.  On this form, she acknowledged that under the LRP the government would repay a designated portion of any loan she 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 she enlisted into the Regular Army.  She acknowledged that enlistment for the LRP ensured her, provided she met and maintained the prescribed prerequisites, that the portion or amount of the loan that could be repaid was 33 1/3 percent of $1,500, whichever was greater, of the unpaid principal balance for each year of service completed.  She acknowledged that repayment would be made only after each successful year of active duty that she performed commending on the date of her enlistment in the Regular Army.  She acknowledged that she would lose entitlement to the LRP if she failed to complete training and receive the military occupational specialty (MOS) she enlisted for, if she did not remain qualified in her incentive MOS, or if she failed to complete her term of enlistment.  She enlisted in the Regular Army on 11 May 1994 for 4 years for the Army Civilian Acquired Skills Program in MOS 91C (Licensed Practical Nurse).

On 14 September 2001, the Department of Education informed the applicant that her loan in the current principal amount of $1,513.04 was in default, with accrued interest of $417.99.  On 20 September 2001, PERSCOM advised her to complete a DD Form 2475.  On 20 September 2001, she completed the DD Form 2475.  On 23 October 2001, the Department of Education informed the applicant that her debt was being assigned to a collection agency for a principal balance of $1,513.04, interest of $428.19, and fees and costs of $485.30 for a total balance of $2,426.53.  On 28 October 2001, the collection agency informed the applicant the balance due was $2,439.89.

In November 2001, PERSCOM authorized payment of the applicant’s principal balance of $1,513.04.

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.  

DISCUSSION:  Considering all the evidence, allegations, and information presented by the applicant, together with the evidence of record, applicable law and regulations, it is concluded:

1.  The Board notes that the applicant’s DA Form 3286-66 informed the applicant that repayment would be made after each successful year of active duty that she performed.  The Board believes that a reasonably prudent person would have verified (by contacting the unit reenlistment counselor, as the applicant later did) that the first (second and third) portions of her loan had been repaid as a sensible precaution in avoiding just what happened.

2.  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

__fne___  __le____  __tl____  DENY APPLICATION

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

INDEX

CASE ID	AR2002067710	
SUFFIX		
RECON		
DATE BOARDED	20020328	
TYPE OF DISCHARGE		
DATE OF DISCHARGE		
DISCHARGE AUTHORITY		
DISCHARGE REASON		
BOARD DECISION	(DENY)	
REVIEW AUTHORITY		
ISSUES         1.	112.12	
2.		
3.		
4.		
5.		
6.