PROCEEDINGS

	IN THE CASE OF:  

	BOARD DATE:           13 June 2000                   
	DOCKET NUMBER:   AR1999032286

	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.  

	Mrs. Nancy Amos		Analyst	

  The following members, a quorum, were present:

	Ms. Elizabeth Buchanon		Chairperson	
	Mr. John H. Kern		Member	
	Ms. Barbara J. Ellis		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 payment of her student loan the same as her other loans.

3.  The applicant states that when she joined the Army her incentive was the Loan Repayment Program (LRP) since her recruiter told her she could not enlist directly for Officer Candidate School.  She was never told that certain loans did not qualify.  In fact, her loan officer did tell her that the loan did not qualify but the recruiter told the loan officer she did not know what she was talking about and that the Army would pay the loan.

4.  The applicant’s military records show that she enlisted in the Regular Army on 22 September 1998.  Her DA Form 3286-66, Statement of Understanding, United States Army Incentive Enlistment Program, shows that she enlisted for the Loan Repayment Program.  On this form, she acknowledged that under the LRP the government would repay a designated portion of any loan she incurred that was made, insured or guaranteed under Part B of the Higher Education Act of 1965 or any loan under Part E of such act after 1 October 1975 and before she enlisted into the Regular Army.  

5.  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.  

6.  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.

7.  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.”

8.  In the processing of this case, an advisory opinion was obtained from the Chief, Education Incentives Branch, U. S. Total Army Personnel Command.  That office recommended disapproval of the applicant’s request.  The loan for which she is requesting payment is not authorized under the Higher Education Act of 1965.  There are no exceptions to the law so payment cannot be made toward her student loan.  To date, she has received payment of $5,708.33 towards her qualifying loans.

9.  This advisory opinion was provided to the applicant for comment/rebuttal.  She responded with a copy of a letter from the Collection Officer, Student Loan Office, Stetson University.  The Collection Officer stated that she informed both the applicant and her recruiter that the loan would not be paid by the Army because it was not a federally funded loan.  The recruiter was rude to her, told her she did not know what she was talking about and that if he said the Army would pay, they would pay.  She gave a copy of the promissory note, with a principal balance of $9,100.00, to the recruiter at that time.  She felt the recruiter intentionally misled the applicant and that it had happened to several other former students from the University.

CONCLUSIONS:

1.  The evidence of record shows that the applicant enlisted in the Regular Army, in good faith, for the LRP incentive on 22 September 1998.  She had obtained student loans prior to her entry on active duty.  She provides evidence to show that her recruiter deliberately misled her into believing this loan qualified.  Had he not done so the Board concludes that the applicant, who was already disappointed in not being able to enlist to attend Officer Candidate School, would not have enlisted.

2.  The applicant served the Army in good faith thinking she was entitled to the LRP incentive because her recruiter told her so.  She was denied that entitlement through no fault of her own.

3.  The applicant’s military records may be corrected to show her DA Form  3286-66, Statement of Understanding, US Army Incentive Enlistment Program, 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 all student loans accepted actually are eligible under the Higher Education Act of 1965 and such failure results in nonpayment of the loan by the LRP, 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 her the amount her lending institution would have been paid under the LRP.

4.  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 the DA Form 3286-66, Statement of Understanding, US 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 all student loans accepted actually are eligible under the Higher Education Act of 1965 and such failure results in nonpayment of the loan by the LRP, 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 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 her loans to which she 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, etc.) to DFAS to determine the amount due.

BOARD VOTE:  

__eb____  __jhk___  __bje___  GRANT AS STATED IN RECOMMENDATION

________  ________  ________  GRANT FORMAL HEARING

________  ________  ________  DENY APPLICATION

			Elizabeth Buchanon
		______________________
		        CHAIRPERSON

INDEX

CASE ID	AR1999032286	
SUFFIX		
RECON		
DATE BOARDED	20000613	
TYPE OF DISCHARGE		
DATE OF DISCHARGE		
DISCHARGE AUTHORITY		
DISCHARGE REASON		
BOARD DECISION	(GRANT)	
REVIEW AUTHORITY		
ISSUES         1.	128.00	
2.		
3.		
4.		
5.		
6.