RECORD OF PROCEEDINGS IN THE CASE OF: BOARD DATE: 20 OCTOBER 2005 DOCKET NUMBER: AR20050001499 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. Ronald DeNoia Analyst The following members, a quorum, were present: Mr. John Meixell Chairperson Mr. James Gullick Member Ms. Jeanette McCants Member 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 that his student loans be repaid through the Student Loan Repayment Program (SLRP). 2. The applicant states, in effect, that his recruiter told him that his loans would be repaid upon enlistment. He also states that the recruiter never mentioned any loans which would not qualify for the SLRP. 3. The applicant provides a memorandum from US Army Human Resources Command; two DA Forms 2475 (DOD Educational Loan Repayment Annual Applications; and two student loan applications. CONSIDERATION OF EVIDENCE: 1. The applicant enlisted in the Army Reserve on 14 December 2002, for a period of 8 years under the Delayed Entry Program (DEP). On 22 July 2003 he requested discharge from the DEP for the purpose of enlisting in the Army with participation in the US Army Station/Unit/ Command/Area Enlistment Program (Option 9B) and the US Army Enlistment Program Cash Bonus and SLRP (Option 9C). 2. The DA Form 3286-59 (Statement for Enlistment, United States Army Enlistment Program) shows that the applicant enlisted for program 9B, U.S. Army Station/Unit/ Command/Area Enlistment Program and program 9C, U.S. Army Incentive Enlistment Program (US Army Loan Repayment Program). This form is signed by both the applicant and the counselor. 3. Item 32 (Specific Option/Program Enlisted for) of the applicants DD Form 1996 (Record of Military Processing) shows the entries "IAW AR 601-210, Program 9B United States Army Station/Unit/Command/Area Enlistment Program" and "9C United States Army Incentive Enlistment Program." There are no entries in the remarks section of this form relating to the Loan Repayment Program. This form is signed by both the applicant and the counselor. 4. On 7 May 2004, the applicant received notification from the Human Resources Command (HRC) informing him that his student loans did not qualify for payment under the SLRP because it was a Signature Loan, which is not made, insured or guaranteed under Title IV Part B, D, or E of the Higher Education Act. 5. The applicant was also notified by HRC that they had received the Department of Defense (DD) Form 2475 (DoD Educational Loan Repayment Program Annual Application), and they had determined the loan totaling $6,279.75 did not qualify for repayment under the LRP. 6. The applicant was further advised by HRC that in order to be eligible for repayment of their student loans, soldiers who have the LRP in their enlistment contract must meet certain standards and their loans must have been made, insured, or guaranteed under the Higher Education Act of 1965, Parts B, D, or E. 7. In addition, the applicant was informed that payment of loans that do not qualify would be in violation of the law governing the LRP and that there are no exceptions to the law. He was finally advised to apply to this Board if he believed he was improperly counseled or that an error or injustice had occurred. 8. Army Regulation 601-210 (Regular Army and Army Reserve Enlistment Program) prescribes eligibility criteria governing the enlistment of persons, with or without prior service (PS), into the Regular Army (RA) and the USAR. Chapter 9 (Enlistment Programs/Options) indicates that these programs/options are designed to merge valid Army requirements with personal desires. 9. AR 601-210, in pertinent part, contains guidance on enlistment option program 9C (Bonus/Army College Fund/Loan Repayment Program). It contains specific guidance pertaining to the LRP and indicates that the government will repay a designated portion of any loan incurred that was made, insured, or guaranteed under part B of the Higher Education Act of 1965 (Guaranteed Student Loan) or any loan under part E of such act (National Direct Student Loan) after 1 October 1975 and before enlistment into the Regular Army. 10. AR 601-210 also provides program processing procedures that require Army Guidance Counselors to accomplish specific counseling and administrative actions in connection with processing members enlisting with the LRP incentive. These actions include ensuring members are disenrolled from the GI Bill; verifying that members have qualifying loans; and advising members of any loan that is not eligible. 11. The regulation further states that Guidance Counselors are specifically required to confirm they accomplished all the processing procedures by making the appropriate entries in the DD Form 1966. This includes a statement advising members of any loan he or she has that is not eligible for repayment and ensuring the applicant’s acknowledgement of this fact is also recorded in the remarks section of the DD Form 1966. 12. 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. 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. 13. 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.” DISCUSSION AND CONCLUSIONS: 1. The applicant’s loan does not meet the criteria established by law; however, that is not the overriding factor in this case given the equity considerations and the resultant injustice. 2. A careful review of the evidence of record reveals that the DD Form 1966 and "Statement for Enlistment" clearly established a contractual agreement, between the applicant and the Army, that he would receive LRP benefits in connection with his active duty enlistment. 3. Although it is clear that the "Statement for Enlistment" specified the types of loans for which LRP benefits were authorized, there is no indication that the applicant was ever advised of these specific provisions of the LRP or of the specific criteria required for a loan to qualify for repayment under the law governing the LRP. 4. By regulation, Army Guidance Counselors are required to verify that a member enlisting for the LRP has qualifying loans and to advise those members if any loan is not eligible for repayment. Further, these service representatives must confirm these actions were accomplished by making the appropriate entries in the enlistment contract or associated documents. 5. Notwithstanding the fact that the "Statement for Enlistment" outlined the legal criteria for repayment under the LRP, the applicant’s enlistment contract and associated documents contain no entries verifying that he was ever properly counseled in regard to the legal loan repayment restrictions. 6. Further, the record gives no indication that an Army Guidance Counselor ever verified that the applicant’s loan did or did not qualify for repayment under the LRP. There is no evidence to show that this verification was ever made a part of the record with the required entries being made in the enlistment contract prior to the applicant entering active duty. 7. In view of the above it is determined that the applicant was improperly counseled in regard to LRP benefits and it that it would be appropriate to rectify this injustice at this time. Therefore, in the interest of justice and equity, it would be appropriate to provide the applicant the LRP benefits outlined in his enlistment contract as if his loan qualified for repayment under the law. 8. The applicant’s military records may be corrected to show his Statement for Enlistment 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 1965 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 institutions would have been paid under the LRP. BOARD VOTE: ____JM__ ___JG __ ___JM __ GRANT FULL RELIEF ________ ________ ________ GRANT PARTIAL RELIEF ________ ________ ________ GRANT FORMAL HEARING ________ ________ ________ DENY APPLICATION BOARD DETERMINATION/RECOMMENDATION: 1. The Board determined that the evidence presented was sufficient to warrant a recommendation for relief. As a result, the Board recommends that all Department of the Army records of the individual concerned be corrected by: amending the applicant’s enlistment contract to include the sentence, “If a student loan is accepted by the official 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 1965 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. As a result of the above correction the Defense Finance and Accounting Service (DFAS) shall remit payment to the applicant of the total amount of the loan, in the amount of $6,279.75, to which he is entitled as a result of this correction. The applicant will submit the appropriate evidence (promissory notes, etc.) to the DFAS to determine the amount due, if required. ______John Meixell__________ CHAIRPERSON INDEX CASE ID AR20050001499 SUFFIX RECON DATE BOARDED 20 OCTOBER 2005 TYPE OF DISCHARGE DATE OF DISCHARGE DISCHARGE AUTHORITY DISCHARGE REASON BOARD DECISION GRANT REVIEW AUTHORITY ISSUES 1. 100.0000.0000 2. 3. 4. 5. 6.