PROCEEDINGS

	IN THE CASE OF: 

	BOARD DATE:  7 September 2000
	DOCKET NUMBER:  AR1999029572

	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. Lee Tinsley		Analyst	

  The following members, a quorum, were present:

	Ms. Celia L. Adolphi		Chairperson	
	Mr. Thomas B. Redfern		Member	
	Mr. Walter T. Morrison		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 by the Army of his student loans in the amount of $28,314.11, under the Loan Repayment Program (LRP) based on assurances from his recruiter and Military Entrance Processing Station (MEPS) counselor.

3.  The applicant states that he submitted his loan statements along with any balance statements and other correspondence that he had accumulated regarding his loans to his recruiter and again to the Army counselor at the MEPS in Troy, Michigan.  Both the recruiter (under the supervision of an experienced recruiter) and MEPS counselor used this paperwork to tell him his loans would be paid.  The applicant also states that the counselor compared loan information to a list of qualifying loans that were printed in a book.  The applicant was notified 8 months later, while attending Advanced Individual Training (AIT), by a letter of denial from UNIPAC Service Corporation that most of his loans were private and could not be paid under the Higher Education Act of 1965 and therefore not payable under the LRP.

4.  In support of his application he submits copies of the loans in question, a detailed letter explaining the events that happened, a letter from his mother, letters from the two recruiters who interviewed him before going to the MEPS and memorandums concerning the LRP to recruiters in the field.  The MEPS counselor did not provide a statement after several requests by the applicant’s counsel.

5.  The applicant’s military records show that he enlisted in the USAR Delayed Entry Program on 7 May 1998.  At that time he and the guidance counselor completed a DA Form 3286-66, Statement of Understanding, United States Army Incentive Enlistment Program, for the LRP incentive.

6.  The applicant enlisted in the Regular Army for 4 years in pay grade E-2 on 
22 May 1998.  On the date the applicant submitted his application to the Board he was serving on active duty in pay grade E-3.  He also submitted two statements from the recruiters who enlisted him supporting his contentions but also stating that they never saw the loan paperwork.  One of the recruiters had stated to him that his loan documents would be checked at the MEPS for LRP eligibility.

7.  The applicant currently has three outstanding loans; UNIPAC-MILOAN in the amount of $9,756.45; UNIPAC-MILOAN in the amount of $3,497.22; and KEY ALTERNATIVE LOAN in the amount of $8,544.13.  The UNIPAC-STAFFORD LOAN in the amount of $6,516.31 is already being paid by the Army.

8.  The LRP is an educational enlistment incentive which provides for payment of 33 1/3 percent or $1,500.00 of the unpaid principle of eligible student loans for each year of active duty a soldier completes.  Only Guaranteed Student Loans (GSL)/Stafford loans, Federally Insured Student Loans (FISL), National Direct Student Loans (NDSL)/Perkins Loans, or any loan covered under Title IV, Part B or E of the Higher Education Act of 1965 are authorized payment under the Department of the Army LRP.

9.  In accordance with USAREC MSG 98-006, dated 22 January 1998, when arriving at the MEPS station it was the guidance counselor’s responsibility to ensure the applicant’s loan documents met enlistment option eligibility.  If the applicant’s documents did not meet the enlistment option eligibility, then they should not be shipped to basic training

10.  Title 10, U.S. 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.

11.  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.”

CONCLUSIONS:

1.  The Board accepts that the personnel effecting the applicant’s enlistment did not tell him that his student loans were not covered under the LRP, and that the MEPS counselor did not insure that all of his student loans were payable.  Therefore, the Board accepts that the applicant was led to believe that all his student loans would be paid under the LRP.

2.  The applicant’s military records may be corrected to show his DA Form 3286-66, US Army Incentive Enlistment Program, paragraph 4a, was altered to include the sentence “If a student loan is accepted by the officials processing you for enlistment as payable under the LRP and it is later discovered that it is not payable due to it not being made or insured under the Higher Education Act of 1965 (Guaranteed Student Loan) or because the loan has been paid off, the Army Board for Correction of Military Records may pay the loan, at its sole discretion, in accordance with Title 10, U.S.C., 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.

3.  In view of the foregoing, it would be in the interest of justice to correct the applicant’s records as recommended below.

RECOMMENDATION:

1.  That all of the Department of the Army records related to this case for the individual concerned be corrected by:

a.  directing that the DA Form 3286-66, U.S. Army Incentive Enlistment Program, paragraph 4a, be altered to include the sentence “If a student loan is accepted by the officials processing you for enlistment as payable under the LRP and it is later discovered that it is not payable due to it not being made or insured under the Higher Education Act of 1965 (Guaranteed Student Loan) or because the loan has been paid off, the Army Board for Correction of Military Records may pay the loan, at its sole discretion, in accordance with Title 10, U.S.C., section 1552.”

	b.  showing that the ABCMR has invoked its prerogative under the altered LRP addendum to pay the individual concerned the principal amount of his student loans; UNIPAC-MILOAN in the amount of $9,756.45; UNIPAC-MILOAN in the amount of $3,497.22; and KEY ALTERNATIVE LOAN in the amount of $8,544.13, notwithstanding whether these loans were insured under the Higher Education Act of 1965 or whether they are outstanding under Title 10, U.S.C., section 1552.

2.  That as a result of the foregoing correction and in accordance with 
Title 10, U. S. Code, section 1552, the Defense Finance and Accounting Service (DFAS) shall remit payment to the applicant of the total amount of his loans to which he is entitled as a result of this correction at the appropriate rate and at the appropriate time.  The applicant will be required to submit the appropriate evidence (promissory notes, current billings, etc.) to DFAS to determine the amount due.

3.  That so much of the application as is in excess of the foregoing be denied.

BOARD VOTE:  

__ca__  __tr____  __wm____  GRANT AS STATED IN RECOMMENDATION

________  ________  ________  GRANT FORMAL HEARING

________  ________  ________  DENY APPLICATION

		__Celia L. Adolphi__
		        CHAIRPERSON

INDEX

CASE ID	AR1999029572	
SUFFIX		
RECON	20000907	
DATE BOARDED		
TYPE OF DISCHARGE		
DATE OF DISCHARGE		
DISCHARGE AUTHORITY		
DISCHARGE REASON		
BOARD DECISION	GRANT	
REVIEW AUTHORITY		
ISSUES         1.  112.12	Loan Repayment	
2.		
3.		
4.		
5.		
6.