MEMORANDUM OF CONSIDERATION

	IN THE CASE OF:       

	BOARD DATE:            24 March 1999
	DOCKET NUMBER:   AC98-12904

	I certify that hereinafter is recorded the record of consideration of the Army Board for Correction of Military Records in the case of the above-named individual.

	Mr. Loren G. Harrell		Director	
	Mr. Paul A. Petty		Analyst	

  The following members, a quorum, were present:

	Mr. James E. Vick		Chairperson	
	Mr. Roger W. Able		Member	
	Mr. Allen L. Raub		Member	

	The Board, established pursuant to authority contained in 10 U.S.C. 1552, convened at the call of the Chairperson on the above date.  In accordance with Army Regulation 15-185, the application and the available military records pertinent to the corrective action requested were reviewed to determine whether to authorize a formal hearing, recommend that the records be corrected without a formal hearing, or to deny the application without a formal hearing if it is determined that insufficient relevant evidence has been presented to demonstrate the existence of probable material error or injustice.

	The applicant requests correction of military records as stated in the application to the Board and as restated herein.

	The Board considered the following evidence:

	Exhibit A - Application for correction of military 
                records
	Exhibit B - Military Personnel Records (including
	            advisory opinion, if any)

APPLICANT REQUESTS:  That the interest amount of his student loan be paid under the Loan Repayment Program (LRP).

APPLICANT STATES:  That he enlisted in the Army for the LRP enlistment incentive but he was not informed that he was not eligible for loan deferment.  When he was at the MEPS, he gave them his promissory notes and they told him that it would be taken care of.  Paragraph 3-4 of a LRP information sheet states that the recruiters will assist applicants awarded the LRP to secure a deferment from the lender.  He did not know that he was not eligible for deferment of his loan and the recruiters did not inform him of this ineligibility.  To date, the Army has made two annual payments on the applicant's student loan principal.

EVIDENCE OF RECORD:  The applicant's military records show:

That he enlisted in the Regular Army on 28 August 1996 with the Loan Repayment Program enlistment incentive.  The applicant signed a DA Form 3286-66, Statement of Understanding on Incentive Enlistment Program, which states that the LRP pays a soldier's outstanding student loan(s) principal (but not interest) incurred before enlistment at the rate of one third per year at the end of each of three successive years as long the soldier remains otherwise eligible.  In paragraph 4d of this statement signed by the applicant it states, "I fully understand that I must secure a military deferment or maintain my account in good standing until such time as repayment is started."  The information sheet that the applicant referred to on his DD Form 149 states in paragraph 3-5, "Enrollment in the LRP does not exempt a soldier from the obligation to repay the loan.  The soldier remains responsible to secure a deferment from the lender.  The letter (provided by the recruiter) by itself does not secure deferment.  The lender must acknowledge and approve all requests for deferment."

Student loan "deferment" is deferment of payments on the principal and accrual of further interest during the deferment period.  Loan deferment provisions were discontinued on 30 June 1993 and replaced by loan forbearance beginning 
1 July 1993.  Loan "forbearance" defers payments on the principal during the period of forbearance but does not defer accrual of interest on the loan.  Since 
1 July 1993, the LRP pays the soldier's student loan principal over three years but the soldier must pay the interest.  In either case, LRP pays only for loan principal and the soldier is responsible for paying any interest.

ADVISORY OPINION:  The Army Personnel Command Education Incentives Office was asked for an advisory opinion on the applicant's issues.  The Education Incentives Office recommended disapproval of the applicant's request on the basis that requests for deferment or forbearance are the sole responsibility of the borrower (applicant) and that public law precludes the authorization of payments toward interest and the reimbursement of payments made.  This opinion was forwarded to the applicant by letter on 29 January 1999 with a 30 day suspense for receipt at this agency of rebuttal or comment.  As of 17 March 1999, a response from the applicant had not been received.

DISCUSSION:  Considering all the evidence, allegations, and information presented by the applicant, together with the evidence of record, applicable law and regulations, and advisory opinion(s), it is concluded:

1.  That the soldier is responsible for obtaining approval of loan deferment and that the applicant signed the DA Form 3286-66 that he understood this requirement.  The information paper on the LRP and deferment that the applicant received also states that securing the deferment is the responsibility of the soldier and that recruiters only assist the soldier by providing a letter certifying that the soldier is eligible for deferment.  The fact that the applicant was not eligible for deferment and only eligible for forbearance has no bearing on the fact that in either case, the applicant is responsible to secure approval from the loan institution and is responsible to pay what ever interest accrues.

2.  There is no provision for paying student loan interest or compensating for interest paid.

3.  In view of the foregoing, there is no basis for granting the applicant's request.

DETERMINATION:  The applicant has failed to submit sufficient relevant evidence to demonstrate the existence of probable error or injustice.

BOARD VOTE:

________  ________  ________  GRANT

________  ________  ________  GRANT FORMAL HEARING

__JEV___  _RWA___  _ALR___  DENY APPLICATION

						Loren G. Harrell
						Director

INDEX

CASE ID	AC98-023904/AR1999015776	
SUFFIX		
RECON	YYYYMMDD	
DATE BOARDED	19990324	
TYPE OF DISCHARGE	(HD, GD, UOTHC, UD, BCD, DD, UNCHAR)	
DATE OF DISCHARGE	YYYYMMDD	
DISCHARGE AUTHORITY	AR .  .  .  .  .  	
DISCHARGE REASON		
BOARD DECISION	DENY	
REVIEW AUTHORITY		
ISSUES         1.		
2.		
3.		
4.		
5.		
6.