RECORD OF PROCEEDINGS

	IN THE CASE OF:       

	BOARD DATE:            29 JANUARY 2004                  
	DOCKET NUMBER:   AR2003087457

	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. Kenneth H. Aucock		Analyst	

  The following members, a quorum, were present:

	Mr. Raymond V. O'Connor, Jr.		Chairperson	
	Mr. Walter T. Morrison		Member	
	Ms. Karen Y. Fletcher		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).

THE APPLICANT'S REQUEST, STATEMENT, AND EVIDENCE:  

1.  In effect, the applicant requests that all her student loans be paid.  

2.  The applicant states that her [enlistment] contract indicates that all her college loans would be repaid, including her Gate and signature loans; however, this was not the case.  She wants the loans repaid or receive compensation for those loans.  She states that recruiters and active duty members at the Fort Dix Military Entrance Processing Station (MEPS) assured her that the loans would be repaid under the loan repayment program.  Because she believed that the loans would be repaid, and they were not, some went into default.  She had to get a second job in order to pay those loans before being medically discharged.  

3.  In a separate statement, dated 1 December 2002, the applicant provides information concerning the circumstances of her enlistment, to include the assurance from recruiters and a MEPS representative that all her loans would be repaid.  Because she was told that she could not defer her Gate loans and that she would have to pay them until DOD (Department of Defense) made the first payment (about one year after she enlisted), she did so only to find out that the Gate loans were not part of the loan repayment program.  By that time she was receiving calls from collection agencies.  Because of her medical problems, she was unable to immediately take care of her problem.  She underwent a Physical Evaluation Board (PEB) and was medically discharged. 

•	After her discharge, she began paying her federal loans that the Army was paying.  Representatives of Sallie Mae told her that the money DOD sent was dispersed into both her federal and private signature loan accounts; however, DOD was only sending enough for the federal loans.  She states that the DOD has not paid $13,630.25, the total amount of her Gate loans and her signature loan.  She states that had she known that a large amount of her loans would not be paid, she would not have enlisted.

•	She was forced to work a second job to pay the bills, which did not help her medical condition.  She was forced to quit her second job, and unable to pay her bills, her credit took a downward slide.  Being discharged left her unemployed until recently.  She was able to get forbearance on her federal loans, but not her private loans.     

4.  The applicant provides statements from her recruiters who indicated they were led to believe that her loans would be paid, a copy of her enlistment contract, and a copy of another soldier's contract also indicating loan coverage.  She provides:

•	A copy of cancelled checks in the amount of $2.00 and $150.00, both dated 27 June 2002, from her to a law agency.

•	Copy of a transcript from Beaver College showing that the applicant received a BA degree on 19 May 2000.

•	A copy of her 15 November 2002 DD Form 214 (Certificate of Release or Discharge from Active Duty), and a copy of reassignment orders directing her discharge on that date because of her physical disability. 

•	A 20 July 2002 letter from a law agency informing her of their intent to deposit her post-dated check as a payment to be applied to the outstanding indebtedness owed to their client. 

•	A 21 November 2002 notice from the American Education Services (AES) informing her that a one-time debit in the amount of $161.94 was added to her student loan account.

•	A 19 November 2002 past due notice from Sallie Mae concerning her student loans - a Federal Family Education Loan Program (FFELP), and a signature loan.  

•	A 10 January 2003 monthly billing statement from Sallie Mae indicating a past due amount on her loans.

•	A 15 February 2003 document, "American Deferment/Forbearance Loan Declaration," showing the amount and the owner of her loans.

•	A 10 January 2003 document indicating a repayment schedule for her loans.  

•	A 19 January 2000 enlistment contract of another Soldier to show that Soldier's contract and her contract were similar.

•	Her enlistment contract showing she enlisted in the Army Reserve Delayed Entry Program (DEP) for eight years on 29 March 2000 and that she enlisted for a cash bonus.

•	A copy of her enlistment document indicating her discharge from the DEP upon her enlistment in the Regular Army on 23 June 2000 for three years. 

•	A DA Form 3286-66 (Statement of Understanding - United States Army Incentive Enlistment Program) in which she stated that she acknowledged and understood that she was enlisting for a cash bonus and the Loan Repayment Program.  That form contained a number of statements, to include, "If the incentive … is for the … LOAN REPAYMENT PROGRAM (LRP), I understand that I must DISENROLL from the GI Bill in order to qualify for the program.…If I fail to complete the disenrollment portion of the DD Form 2366, I will not be eligible for the LRP and will become automatically enrolled in the GI Bill," and, "I understand that under the 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 Act of 1975 (Guaranteed Student Loan) or any loan under Part E of such act … after 1 October 1975 and before I enlist into the Regular Army."  She and her counselor signed that form on 23 June 2000.

•	A copy of a 9 November 2000 certificate showing her successful completion of a unit supply specialist course.  

•	Copies of enlistment documents.

•	A copy of a DD Form 2366 (Montgomery GI Bill Act of 1984) indicating that she understood that she was enlisting for the LRP and therefore was disenrolling from the MGIB.  The form was unsigned by the applicant but witnessed by a noncommissioned officer (NCO) on 23 June 2000. 

•	A copy of an information paper concerning the loan repayment program. 

•	A copy of correspondence from AFSA Data Corporation dated 22 June 2000, indicating that her loan was in forbearance from 28 May 2000 through 28 April 2001, that her interest rate was a variable rate at 7.98 percent, and that her principal balance on the loan was $4380.13.

•	A copy of a 22 January 2000 statement from the Student Loan Servicing Center, a division of the Pennsylvania Higher Education Assistance Agency (PHEAA) showing the status of her student loans.  A copy of a statement from that same center showing the total payoff amount of her student loans.  

•	Additional copies of enlistment documents and enlistment processing forms.

•	Copies of DA Forms 2475 (DOD Educational Loan Repayment Program [LRP] requesting payment to the Student Loan Servicing Center of her Gate loan.

•	Copy of a document, "Signature Education Loan Program" from Sallie Mae for the loan period 19 January 2000 to 9 May 2000 for an approved amount of $3000.00.

•	Copies of application and promissory notes for federal Stafford loans.

•	Copy of a letter from PHEAA to Beaver College providing information showing the applicant's eligibility for a subsidized Stafford loan.

•	Copy of a Gate student loan application and multi-disbursement notes.   

•	A copy of an 8 May 2001 letter from the Total Army Personnel Command (PERSCOM) Education Incentives and Counseling Branch informing her that her Gate loans did not qualify for repayment.

CONSIDERATION OF EVIDENCE: 

1.  The applicant enlisted in the Army Reserve DEP on 29 March 2000 for an area enlistment program and a $3000.00 cash bonus.  She was discharged from the DEP upon her enlistment in the Regular Army for three years on 23 June 2000.  Her DA Form 3286-66 shows that she enlisted for a cash bonus in the amount of $11,000.00 and for the LRP in an amount not to exceed         $65,000.00.  As indicated in the enlistment documents provided, she stated that she understood under the LRP that the government would pay a designated portion of loans she incurred that were made, insured, or guaranteed under certain provisions of law.  She and a counselor both signed that form.

2.  The Station Commander of Blackwood Recruiting Station in Clementon, New Jersey stated that the applicant enlisted on 29 March 2000 with the understanding that her student loans were going to be paid.  He stated that he was led to believe that all her loans would be paid because prior to leaving for basic training she was informed that all she needed was her promissory notes for all her loans.  She provided them to MEPS.  While in basic training, he was contacted by the Army Recruiting Command (USAREC) liaison on a promissory note for her Gate loan.  He provided the note the next day, and understood everything was fine.  Another soldier enlisted in the Army and had taken the same loans as the applicant.  That soldier never indicated that the Army did not take care of her loans.  The field recruiter at the same station made a similar      statement on behalf of the applicant.    

3.  The applicant was discharged on 15 November 2002 and awarded a            10 percent disability rating.  She received $8559.50 in severance pay.   

4.  In the processing of this case an advisory opinion was obtained from the Human Resources Command Education Incentives and Counseling Branch.  That office recommended disapproval of the applicant's request, stating that the applicant duly completed the DA Form 3286-66, and that her signature private loan and Gate loan did not qualify for repayment under the LRP – that there were no exceptions to the law.  That office indicated that she borrowed money for her education and then joined the Army to have qualifying loans repaid.  It indicated that she did have loans that qualified for repayment under the LRP, and that appropriate payments have been authorized toward her qualifying loans.  It also indicated that an additional prorated payment would be authorized under the LRP for her third year of active duty.

•	That branch indicated that if the Board did decide to grant compensation, it recommended that the computation of any payment be based on the information provided in the applicant's case paperwork – that an amount authorized be based on a prorated amount of $12,079.59, and sent directly to the applicant.

5.  On 18 November 2003 the applicant was furnished a copy of the advisory opinion for her information and possible rebuttal.  She failed to respond.

6.  The LRP is an educational enlistment incentive, which provides for payment of a percentage of the unpaid principal of eligible student loans for each year of active duty a soldier completes.  Title 10, United States 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.

DISCUSSION AND CONCLUSIONS:

1.  Notwithstanding the applicant's contention, her enlistment contract which she signed, did not indicate that all her college loans, including her Gate and signature loans, would be repaid by the government.  The contract is explicit concerning the loans that would be repaid.   

2.  Nonetheless, it appears that the applicant was made to understand that all her college loans would be repaid, as indicated by the statements from the station commander and a field recruiter at the Blackwood Recruiting Station.  Her statement and the statements of those two Soldiers indicate that officials at the MEPS also caused her to understand that all her loans would be repaid.    

3.  Therefore, and despite the advisory opinion recommending disapproval of the applicant's request, it appears that an injustice has occurred.  She was misinformed and made to understand that all her college loans would be repaid.  Consequently, in order to correct this inequity all her loans should be repaid.
4.  The applicant states that the total amount of her Gate and signature loans is $13,630.25; however, an exact amount cannot be determined by the documents that she submits with her request.  The amount calculated by the Human Resources Command, $12,079.59, as indicated by the applicant's case paperwork maintained by the Education Incentives and Counseling Branch, and as prorated by that branch, is the probable amount of her Gate and signature loans that should be repaid.  That amount should be paid to her as recommended by that branch.      
   
BOARD VOTE:

__RVO __  __WTM  _  ___KYF _  GRANT RELIEF 

________  ________  ________  GRANT FORMAL HEARING

________  ________  ________  DENY APPLICATION

BOARD DETERMINATION/RECOMMENDATION:

1.  The Board determined that the evidence presented was sufficient to warrant a recommendation for partial relief.  As a result, the Board recommends that the individual concerned be paid an amount of $12,079.59, as full payment for her Gate and signature loans

2.  The Board further determined that the evidence presented is insufficient to warrant a portion of the requested relief.  As a result, the Board recommends denial of so much of the application that pertains to payment of her Gate and signature loans in excess of $12,079.59.  

		Raymond V. O'Connor, Jr.
		        CHAIRPERSON

INDEX

CASE ID	AR2003087457	
SUFFIX		
RECON	YYYYMMDD	
DATE BOARDED	20040129	
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.	112.12	
2.		
3.		
4.		
5.		
6.