PROCEEDINGS

	IN THE CASE OF: 

	BOARD DATE:           29 August 2000
	DOCKET NUMBER:   AR1999029760

	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. David H. Keller		Analyst	

  The following members, a quorum, were present:

	Mr. John D. Miller		Chairperson	
	Mr. Roger Able		Member	
	Mr. Charles Gainor		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 that his enlistment contract be honored and his student loan be paid under the terms of the Loan Repayment Program (LRP).

3.  The applicant states that he decided to enlist upon his graduation from college because of the LRP.  He contends that his recruiter told him that his $21,446.82 student loan from the Corning (New York) Credit Union qualified for the LRP and even contacted his creditor to verify that the loan qualified.  He adds that he has fulfilled his obligation by completing basic and advanced training.  He has been assigned to the Center for Health Promotion and Preventive Medicine-Europe for 1 year and is a valuable asset to that organization.  He asks that the Army honor its obligation to him.

4.  In support of his request, the applicant submits copies of his enlistment contract; documents from the Education Incentives Branch, Total Army Personnel Command (PERSCOM), consisting of forms and rules for the LRP; his application for the LRP (DA Form 2475); a 26 May 1999 PERSCOM memorandum denying his application; and a 25 August 1997 record of telephone conversation between his recruiter and his credit union.

5.  The applicant’s military records show that he enlisted in the Army Reserve Delayed Entry Program on 25 August 1997.  At that time, he completed a DA Form 3286-66, Statement of Understanding, United States Army Incentive Enlistment Program, enlisting for the LRP.  His enlistment contract specified that the government would repay a designated portion of any student loan he incurred so long as it 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 (National Direct Student Loan) after 1 October 1975.”  

6.  On 26 May 1999, the applicant was advised by PERSCOM that his loan did not qualify for repayment under the LRP because it was not made, insured, or guaranteed under the appropriate portion of the Higher Education Act; his loan was through the Corning Credit Union.

7.  A 25 May 1997 conversation record submitted by the applicant indicates that the credit union representative was informed by the recruiter that the applicant would be getting $1100.00 pay per month and that for each year the applicant serves, the military would pay one-third of the school loan for up to 3 years.

8.  The LRP is an educational enlistment incentive which provides for payment of 33 1/3 percent or $1500.00, whichever is greater, of the unpaid principal of eligible student loans for each year of active duty a soldier completes.  The repayment is limited to $65,000.  Title 10, US Code, section 2171, limits repayment to those loans made, insured or guaranteed under the Higher Education Act of 1965.

CONCLUSIONS:

1.  The applicant enlisted in the Regular Army in order to repay his student loan with the Corning Credit Union.  He provided his recruiter with all pertinent information concerning his loan and his creditor.  The recruiter contacted the creditor and stated that the loan would be repaid.  This is verified by the conversation record between the recruiting office and the credit union.

2.  The recruiter should have known that the applicant’s loan was not qualifying under the conditions established by the Higher Education Act of 1975 and should have advised the applicant of this fact.

3.  The applicant fulfilled the terms of his enlistment contract by completing all training and reporting for duty in Germany.  The Army refused to repay his student loan, citing the provisions of the Higher Education Act of 1975.

4.  The applicant’s military records may be corrected to show that paragraph 4a of his DA Form 3286-66 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 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 10 USC 1552.”

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

RECOMMENDATION:

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

	a.  Showing that paragraph 4a of the DA Form 3286-66 completed by the individual concerned is altered 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 10 USC 1552.”

b.  Showing that this Board has invoked its prerogative under the altered LRP addendum and Title 10, U.S.C., section 1552 to pay to the individual concerned the principal amount of his student loan, notwithstanding whether that loan was made, insured, or guaranteed under the Higher Education Act of 1965, or whether it has been repaid or is in default; and

c.  Indicating that as a result of the foregoing correction and in accordance with 10 USC 1552, the Defense Finance and Accounting Service (DFAS) shall remit payment to the applicant of the total amount of his loan to which he is entitled as a result of this correction at the appropriate rate and time.  The applicant will be required to submit the appropriate evidence (promissory notes, etc.) to DFAS to determine the amount due.

BOARD VOTE:  

__jdm___  __ra____  __cg____  GRANT AS STATED IN RECOMMENDATION

________  ________  ________  GRANT FORMAL HEARING

________  ________  ________  DENY APPLICATION

		        _John D. Miller__
		        CHAIRPERSON

INDEX

CASE ID	AR1999029760	
SUFFIX		
RECON		
DATE BOARDED	20000829	
TYPE OF DISCHARGE		
DATE OF DISCHARGE		
DISCHARGE AUTHORITY		
DISCHARGE REASON		
BOARD DECISION	GRANT	
REVIEW AUTHORITY	DASA	
ISSUES         1.	112.0400	
2.	128.0500	
3.		
4.		
5.		
6.