RECORD OF PROCEEDINGS

	IN THE CASE OF:  

	BOARD DATE:           1 April 2004       
	DOCKET NUMBER:   AR2003087870

	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. Wanda L. Waller		Analyst	

  The following members, a quorum, were present:

	Mr. Fred N. Eichorn		Chairperson	
	Mr. Walter T. Morrison		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).

THE APPLICANT'S REQUEST, STATEMENT, AND EVIDENCE:  

1.  The applicant requests, in effect, that the Army repay a student loan under the Loan Repayment Program (LRP).

2.  The applicant states that he was assured by his recruiter that all of his student loans would be paid.

3.  The applicant provides copies of promissory notes and loan applications; copies of his enlistment contract; a DD Form 2475 (DOD Education Loan Repayment Program (LRP) Annual Application), dated 12 April 2001; an undated note from his recruiter; a letter, dated 11 March 2003, from a Member of Congress; and a letter, dated 30 October 2002, from the Acting Chief, Education Incentives and Counseling Branch, dated 8 May 2001. 

CONSIDERATION OF EVIDENCE: 

1.  The applicant entered the delayed entry program on 24 April 2000.  His DA Form 3286-66 (Statement of Understanding, United States Army Incentive Enlistment Program) shows he enlisted for the LRP up to a maximum repayment of $65,0000.  On this form, he acknowledged that under the LRP the government would repay a designated portion of any loan he incurred that was made, insured or guaranteed under Part B of the Higher Education Act of 1975 or any loan under Part E of such act after 1 October 1975 and before he enlisted into the Regular Army.  He also acknowledged that he understood that he must disenroll from the GI Bill in order to qualify for the LRP.    

2.  The applicant enlisted in the Regular Army on 24 May 2000 for a period of 
5 years.  At the time the applicant submitted his application to the Army Board for Correction of Military Records, he was serving on active duty in pay grade E-4.

3.  On 8 May 2001, the U.S. Total Army Personnel Command disapproved the applicant's Signature Student Loan.  

4.  In support of his claim, the applicant provided an undated note from his recruiter.  This note indicates that the applicant gave his promissory notes to his recruiter prior to his entry on active duty and that the applicant was given instructions pertaining to the promissory notes so that the Army would pay them. 
    
5.  During the processing of his application, an advisory opinion was prepared by the Chief, Education Incentives and Counseling Branch of the U.S. Army Human Resources Command.  The advisory opinion recommended disapproval of the applicant's request.  It was noted the applicant had a loan that qualified for repayment under the LRP in the amount of $2,625.  That office recommended that, if the Board decided to grant compensation, that the computation of any payment be based on the information provided in the applicant's case paperwork (DD Form 2475).  The combined total outstanding balance on the non-qualifying Signature Student Loan is $16,109.20.  A copy of the advisory opinion was provided to the applicant for comment.  He did not respond within the given time frame.

6.  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, 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.
  
7.  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.

8.  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 to 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."

DISCUSSION AND CONCLUSIONS:

1.  The evidence of record shows the applicant enlisted for the LRP incentive on 24 April 2000.  It appears he had obtained two student loans prior to his entry on active duty and they were not in default prior to his entry on active duty.  The recruiter's note indicates that the applicant showed all of his promissory notes (plural) to him prior to the applicant's enlistment and the recruiter conveyed to the applicant that the Army would pay them.  The applicant disenrolled from the GI Bill and enlisted in the Regular Army in good faith for 5 years believing all of his 

loans qualified for repayment under the LRP.  He has since been informed that one of his loans did not qualify under the LRP for repayment.  The Human Resources Command indicated the non-qualifying loan is for the amount of 
$16,109.20. 

2.  The applicant's military records should be corrected to show his DA Form 3286-66 was amended 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 the student loan accepted actually is eligible under the Higher Education Act of 1975 and such failure results in nonpayment of the loan by the LRP or the repayment or default of the loan, 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."  This would allow the Board to invoke that provision and pay him the amount his lending institution would have been paid under the LRP.

BOARD VOTE:

FNE____  WTM____  JTM_____  GRANT RELIEF 

________  ________  ________  GRANT FORMAL HEARING

________  ________  ________  DENY APPLICATION

BOARD DETERMINATION/RECOMMENDATION:

1.  That the applicant's DA Form 3286-66 (Statement of Understanding, U.S. Army Incentive Enlistment Program) be amended 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 the student loan accepted actually is eligible under the Higher Education Act of 1975 and such failure results in nonpayment of the loan by the LRP or the repayment or default of the loan, 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."  

2.  That as a result of the foregoing correction the Defense Finance and Accounting Service shall remit in payment to the applicant $16,109.20, the total amount of his loan to which he is entitled as a result of this correction.

		_Fred N. Eichorn__________
		        CHAIRPERSON

INDEX

CASE ID	AR2003087870	
SUFFIX		
RECON		
DATE BOARDED	20040401	
TYPE OF DISCHARGE		
DATE OF DISCHARGE		
DISCHARGE AUTHORITY		
DISCHARGE REASON		
BOARD DECISION	GRANT	
REVIEW AUTHORITY		
ISSUES         1.	112.1200	
2.		
3.		
4.		
5.		
6.