PROCEEDINGS

	IN THE CASE OF:       

	BOARD DATE:           JANUARY 8, 2004
	DOCKET NUMBER:   AR2003087287

	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	
	Mr. Luis Almodova		Analyst	

  The following members, a quorum, were present:

	Ms.  Kathleen A. Newman. 		Chairperson	
	Ms.  Linda M. Barker 		Member	
	Mr.  John T. Meixell 		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, payment of all college student loans as promised under the Loan Repayment Program (LRP) incentive at the time of her enlistment on 8 January 2002.

3.  The applicant states, in effect, that she was not properly counseled, her enlistment forms were not properly annotated, and the promissory notes that she turned in to the MEPS (Military Entrance Point) were not reviewed in compliance with the Army's program.  She states that she was told that all her student loans (amounting to over $48,000) would be paid under the LRP.  She continues by stating that her decision to join the Army as an enlisted member was based on this incentive verses any cash bonus she qualified for since she had been informed that she could choose only one or the other, the LRP or cash bonus.  At the time, the LRP, worth $48,000 to her for repayment of college loans, seemed to be her best option.  She points out that she also considered enlisting for OCS (officer candidate school) as she met all the requirements, to include having a BA (Bachelor of Arts Degree) in political science; however, she opted for becoming an enlisted service member because the lucrative LRP is not available to commissioned officers.  Now, a year later, she is told that her College Access Loans (CAL) do not qualify when all six of the promissory notes are clearly marked, in big letters, in the upper right hand corner, "CAL."  To now tell her that over $22,000 of her loan amount will not be paid is an injustice to her and a material misrepresentation by recruiting and the EIB (Educations Incentive Counseling Branch).

4.  In support of her application, the applicant provides a two-page self-authored statement detailing her contentions; a copy of a USAREC (US Army Recruiting Command) Form 1150-R-E, Statement of Understanding – Army Policy, USAREC Addendum to DD Form 1966 Series, dated 8 January 2002; a copy of an e-Mail, Subject Loan Repayment Information, she sent to the EIB, PERSCOM, on 3 December and replied to on 9 December 2002; a copy of a letter from the Chief, EIB, PERSCOM, dated 12 February 2003; six CAL Forms 101, Application and Promissory Note for a College Access Loan Administered by the Texas Higher Education Coordinating Board; a College Access Loan Program Disclosure Statement/Warrant Release, for the period ending 31 May 1999; a copy of a DD Form 1966/1 through 4, Record of Military Processing – Armed Forces of the United States, dated 7 January 2002; a copy of a DA Form 3286-66, Statement of Understanding, United States Army Incentive Enlistment Program, dated 9 April 2002; a copy of a DA Form 3286-59, Statement for Enlistment, United States Army Enlistment Program, US Army Delayed Enlistment Program, dated 8 January 2002; and a copy of page 99, from Army Regulation (AR) 601-210.

5.  The applicant’s military records show that on 8 January 2002, she enlisted in the Army Reserve, US Army Delayed Enlistment Program, for 8 years.  On 9 April 2002, the applicant enlisted in the Regular Army for 4 years with enlistment options 9B (US Army Station/Unit/Command/Area Enlistment Program-UNCO (Uncommitted, Continental United States Only) and 9C (US Army Incentive Enlistment Program – LRP up to $65,000).  The applicant was also assured of attending the school course for MOS/CMF (military occupational specialty/career management field) 27D, Paralegal Specialist.

6.  A DA Form 3286-66 confirms the options and incentive the applicant contracted for during her enlistment process.  "Loan Repayment Program" is shown as the incentive and the applicable LRP terms are listed in paragraph 4.  On this form, the applicant 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 (RA).  She initialed the form in the appropriate spaces to indicate her acknowledgement of the criteria.

7.  The above referenced form also contained an acknowledgement that enlistment for the LRP ensured her, provided she met and maintained the prescribed prerequisites, that the portion or amount of her student loan that could be repaid was 33 1/3 percent or $1,500, whichever was greater, of the unpaid principal balance for each year of service completed, not to exceed $65,000.  

8.  The applicant and guidance counselor authenticated this document on the date she entered active duty, 9 April 2002.  There is no indication in this Annex that any question was raised with regard to her eligibility for the LRP based on her enlistment for the options listed.  There is no indication that the applicant was advised that any of her loans did not qualify for payment under the LRP.

9.  Concerned that she would be penalized for failing to send in whatever she had to send to the EIB, PERSCOM, to have her loans paid for under the term of her enlistment contract, the applicant sent that office an e-Mail on 3 December 2002, inquiring about the status of her loans and if anything was required of her at this point.  In the same e-Mail, she advised them of her pay entry date and her current address.

10.  A representative of the EIB, PERSCOM, replied to her e-Mail on 9 December 2002.  She was provided information about the process and laws and policy related to military deferments or forbearance of student loans for soldiers in the LRP.

11.  On 12 February 2003, the applicant was notified by the EIB, PERSCOM, that based on information provided by the Texas Higher Education Coordinating Board (TXHECB), it was determined that her loan did not qualify for repayment under the LRP.  She was advised that her loan was a College Access Loan and as such, it was not made, insured, or guaranteed, under Title IV, Part B, D, or E, of the Higher Education Act.

12.  The applicant was advised that if she thought she had not been properly counseled or an error or an injustice had occurred, she should apply to this Board for a corrective action.

13.  Army Regulation (AR) 601-210 (Regular Army and Army Reserve Enlistment Program), Chapter 6, MEPS [Military Entrance Processing Stations] Processing Phase, provides policy and guidance for those functions that are administered at MEPS by MEPCOM [Military Entrance Processing Command] personnel and guidance counselors.  Section II, Guidance Counselor Processing Phase, prescribes the duties of the guidance counselor and provided the procedures to be followed in the enlistment process.  Paragraph 6-5.g. states that the guidance counselor "counsels applicants who failed to meet specific qualifications for options for which they applied; advises them of other available options."

14.  Table 9-4, line 7d, states that guidance counselors will a.) complete the required entries on the DD Form 1966; b.) if enlisting for the LRP [Loan Repayment Program], disenroll the applicant or soldier from the GI Bill; and c.) verify that the applicant has qualifying loans if enlisting for the LRP.  Advise applicant if any loan is not eligible and have the applicant acknowledge same in the remarks section of the DD Form 1966 series.

15.  The procedures, outlined in paragraphs 13 and 14 above, are also contained in USAREC Regulation 601-96, Appendix N, paragraphs N-3.d.; N-3.d.(4); and N-3.f.

16.  Forms included in the DD Form 1966 series were reviewed for any indication or remarks that any of the applicant's loans was not eligible for repayment under the LRP.  None was found.

17.  The applicant's official military personnel record is void of a DD Form 2366, Montgomery GI Bill Act of 1984 (MGIB).  The guidance counselor is required to disenroll LRP participants from the MGIB when the LRP is the incentive for which the individual enlisted.

18.  AR 601-210 also provides specific direction to Guidance Counselors to confirm that they accomplished all processing procedures by making the 

appropriate entries in the DD Form 1966-series and DA Form 3286-66.  This includes a statement regarding the applicant’s eligibility for the LRP, which is to include any factors that may disqualify them from receiving the LRP benefit, and ensuring that the applicant’s acknowledgement of this fact is also recorded in the remarks section of the appropriate form of the DD Form 1966-series.

19.  In the processing of this case, a staff advisory opinion was obtained from the Human Resources Command – Alexandria, Virginia, Education Incentives Counseling Branch.  In the opinion, the Chief, Education Incentives Counseling Branch, opines that the applicant's College Access Loans in the amount of $28,088.34 do not qualify under the SLRP; however, her loans from the Sallie Mae Servicing Corporation (both PLUS and Stafford Loans) and the Nelnet (Stafford) loan do qualify for repayment and appropriate payments are being authorized towards repayment of these loans.  The Chief, Education Incentives Counseling Branch also states in his opinion that should the Board decide to grant compensation, he recommends that payment for the combined total outstanding balance of $28,088.34 be made directly to the soldier.

20.  The opinion was provided to the applicant for comment.  In her rebuttal, the applicant repeats, in effect, that she was not properly counseled nor did the personnel required to review her promissory notes possess the understanding or the knowledge about which loans qualified for the Student Loan Repayment Program and which did not.  The applicant states that it is her understanding that as a result of her complaint and those of other applicants that the Recruiting Command is studying this matter and taking action to prevent future acts of misrepresentation of incentives under the Student Loan Repayment Program through education and use of an appropriate checklist.  The applicant asks for the Board's consideration and its understanding that there is a flaw in the system.  She states that she has lived up to her contractual commitment and expects the Army to do the same.  She was told that her loans would be paid and she cannot afford to pay the $28,088.34 plus accumulating interest on her current salary.

21.  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.  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.  The Government will not make any payments to the soldier or reimburse a soldier if he or she pays off a student loan.  The Government will only pay the lending institution.

22.  Title 10, US 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 Board concedes that the applicant’s College Access Loans did not meet the LRP criteria established by law and regulation; however, it finds this is not the overriding factor in this case, given the equity considerations and the resultant injustice to the applicant.

2.  A DA Form 3286-66 [identified as Annex D] confirms the options and incentive the applicant contracted for during the recruitment and enlistment process.  "Loan Repayment Program" is shown as the incentive and the applicable LRP terms are listed in paragraph 4.  The applicant acknowledged the incentive by initialing the applicable spaces and the form was signed by both the applicant and the guidance counselor thus establishing a contractual agreement, between the applicant and the Army.  This contractual agreement established that the applicant would receive LRP benefits.

3.  AR 601-210, Table 9-4, includes specific requirements that guidance counselors must accomplish.  Guidance counselors are obligated to advise applicants on any option they agreed to, but are not eligible for, and provide them guidance on any available alternative(s).  Counselors are then required to add entries on the enlistment documents, the DA Form 1966-series and the DA Form 3286-66, to confirm this verification of options and incentives.

4.  The DA Form 1966-series and the DA Form 3286-66 were reviewed to determine if there were any factors that were identified that might disqualify the applicant from participating in the LRP and receiving the LRP benefits she was 

guaranteed before enlistment.  No entries were found which indicates that promissory notes were not reviewed as required or that all loans were deemed to meet the requirement for payment under the provisions of the LRP by the guidance counselor.

5.  The applicant's official military personnel record is void of a DD Form 2366, Montgomery GI Bill Act of 1984 (MGIB).  LRP participants are required to be disenrolled from the MGIB.  The guidance counselor is required to complete the disenrollment portion of this form and prepare a cover sheet showing, in bold letters, "Disenrolled from the GI Bill (LRP Participant)."  The guidance counselor failed to follow this specific guidance in AR 601-210.

6.  The evidence of record shows that these obligations were not accomplished in accordance with established policy and procedures in effect at the time of the applicant's recruitment and enlistment.

7.  In view of the facts of this case, the Board finds that the applicant entered into an erroneous contract with the Army, through no fault of her own, based on the failure of the recruiter and guidance counselor to strictly follow established regulatory guidelines and procedures in connection with her recruitment and enlistment processing.  Given the failure by the recruiter and guidance counselor to follow clearly established policies and procedures, the Board concludes that it would be appropriate to rectify the resultant injustice to the applicant at this time.  The Board finds that it would be equitable and in the interest of justice to provide the applicant the LRP benefits committed to in her enlistment contract at the time of her enlistment.

8.  Wide discretions are available to this Board under Title 10, US Code, Section 1552, which includes the authority to amend the applicant’s DA Form 3286-66 to include the sentence, “If a student loan is accepted by the officials processing you for enlistment as payable under the LRP and the government fails to verify that all student loans accepted actually are eligible, under the Higher Education Act of 1965, and such failure results in nonpayment of the loan by the LRP, the Army Board for Correction of Military Records may pay the loan, at its sole discretion, in accordance with Title 10, US Code, section 1552;”  This amendment of the DA Form 3286-66 allows the Board to invoke that provision and pay the lending institutions, in behalf of the applicant, the amount that would have been paid towards satisfaction of outstanding student loan(s), verified at the time of her enlistment.

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

RECOMMENDATION:

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

a.  amending the DA Form 3286-66 to include the statement,  “If a student loan is accepted by the officials processing you for enlistment, as payable under the LRP, and the government fails to verify that all student loans accepted actually are eligible under the Higher Education Act of 1965, and such failure results in nonpayment of the loan by the LRP, the Army Board for Correction of Military Records may pay the loan, at its sole discretion, in accordance with Title 10, U.S. Code, section 1552;” 

b.  directing that the applicant submit the appropriate evidence, in the form of promissory notes, etc. to DFAS to determine the amount due on the loans addressed by these proceedings; and

c.  directing that in accordance with Title 10, US Code, section 1552, the Defense Finance and Accounting Service to make payment to the lending institution(s) for the total amount of loans to which the applicant is entitled, based on time served, at the appropriate rate, and at the appropriate time, as a result of this correction.

BOARD VOTE:  

kan_____  lmb_____  jtm_____  GRANT AS STATED IN RECOMMENDATION

________  ________  ________  GRANT FORMAL HEARING

________  ________  ________  DENY APPLICATION

		___Kathleen A. Newman___
		        CHAIRPERSON

INDEX

CASE ID	AR2003087287	
SUFFIX		
RECON		
DATE BOARDED	20040108	
TYPE OF DISCHARGE		
DATE OF DISCHARGE		
DISCHARGE AUTHORITY		
DISCHARGE REASON		
BOARD DECISION	GRANT	
REVIEW AUTHORITY		
ISSUES         1.  23	103.0000	
2.  1018	103.0100	
3.		
4.		
5.		
6.