MEMORANDUM OF CONSIDERATION

	IN THE CASE OF:   

	BOARD DATE:           7 November 2002
	DOCKET NUMBER:   AR2002075154

	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. Carl W. S. Chun		Director	
	Ms. Nancy L. Amos		Analyst	

  The following members, a quorum, were present:

	Mr. Raymond V. O’Connor, Jr.		Chairperson	
	Mr. Thomas B. Redfern, III		Member	
	Mr. Donald P. Hupman, Jr.		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 Army pay the interest on her school loan.

APPLICANT STATES:  That she enrolled in the Delayed Entry Program with the intention of enlisting for the Loan Repayment Program (LRP).  Her recruiter told her he would have everything ready for her when she arrived at the Military Entrance Processing Station (MEPS) in April 1999.  When she arrived at the MEPS, she was informed that her paperwork was not correct.  Her recruiter and the MEPS noncommissioned officer promised everything was going to get taken care of.  When she at the Reception Station, she was informed that the paperwork regarding her rank was incorrect (yet another recruiter problem).  Upon arriving at her first duty station, she was told that the paperwork regarding her enlistment bonus was incorrect.  That had to be corrected.  

She did not pay much attention to the repayments on her loans because she felt confident the Army was going to take care of them.  She could not get information on the Parent Plus Loan because it was in her father's name even though the loan was for her schooling.  She did notice repayments on her own Direct Loan.  Late in 2001, her father received a notice that the forbearance he had on the Parent Plus Loan was about to expire.  He noticed that not a single dime had been paid to the loan from the Army.  He told the Customer Service department to allow her to have information on the loan so she could get repayment from the Army.  It took a long time to settle this matter, then she learned that the Army would be paying the balance on the loan as it was in April of 1999.  She feels this is not fair.  Her father and she assumed the Army would be paying the loan in a timely manner.  The Army has since made a payment on the Parent Plus Loan in the amount of $2,089.93.  Her other student loan has been taken care of.

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

She was born on 6 February 1976.  She entered the Delayed Entry Program on 23 January 1999.  Her DA Form 3286-66, Statement of Understanding, United States Army Incentive Enlistment Program, shows that she enlisted for the LRP and for a cash enlistment bonus.  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.  She acknowledged that enlistment for the LRP ensured her, provided she met and maintained the prescribed prerequisites, that the portion or amount of the loan that could be repaid was 33 1/3 percent or 

$1,500, whichever was greater, of the unpaid principal balance for each year of service completed.  She acknowledged that repayment would be made only after each successful year of active duty that she performed commencing on the date of her enlistment in the Regular Army.  She acknowledged that she would lose entitlement to the LRP if she failed to complete training and receive the military occupational specialty (MOS) she enlisted for, if she did not remain qualified in her incentive MOS, or if she failed to complete her term of enlistment.  She enlisted in the Regular Army on 21 April 1999 for 3 years in pay grade E-3.

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.  

In the processing of this case, an advisory opinion was obtained from the U. S. Total Army Personnel Command (PERSCOM), Education Incentives and Counseling Branch.  PERSCOM noted that before the Army can make any loan repayments, additional loan verification information from both the LRP participant and current loan holder(s) must be provided to that office.  PERSCOM received verification for the applicant's Stafford Loan in January 2000.  Three payments totaling $3,625.20 were authorized within the applicant's first three years of active duty.  Verification of the Parent Loan for Undergraduate Students (PLUS) was received by PERSCOM in March 2002 for a total remaining original unpaid principal verified as $6,269.79.  Payments authorized under the LRP are taxable in the year they are paid.  The applicant verbally requested payments be authorized over a period of three years.  She was informed that she must make that request in writing.  In an effort to assist the applicant, PERSCOM authorized the first one-third payment of $2,089.93 on the PLUS account in March 2002 
without the written request to spread the payment over three years.  Since no 

request was ever received and to avoid additional interest accrual on the PLUS account, the remaining two-thirds payment of $4,179.86 was authorized            13 August 2002.  PERSCOM noted that the LRP has stringent criteria and Public Law 99-145, section 671(a)(1) precludes the authorization of payments toward interest and the reimbursement payments made.  There are no exceptions to the law.

A copy of the advisory opinion was provided to the applicant for comment or rebuttal.  The applicant responded by noting that the remaining two-thirds payment of $4,179.86 was paid to the wrong loan and that proves that the mishandling of her paperwork has continued.

On 8 October 2002, PERSCOM, Education Incentives and Counseling Branch confirmed that they make loan payments to the lending institution in accordance with the law.  It is the responsibility of the lending institution to apply the payment. PERSCOM would be willing to send a letter to the applicant's lending institution telling them which loan they intended the check to be applied against.

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, it is concluded:

1.  The Board notes that the applicant’s DA Form 3286-66 informed her that repayment would be made after each successful year of active duty that she performed.  It appears she took the proper actions to apply for repayment of her Stafford Loan in a timely manner.  She does not adequately explain why she did not take the same action to apply for repayment of her PLUS loan.  Considering she had already had three problems regarding her enlistment paperwork, a reasonably prudent person would have verified (by contacting the unit reenlistment counselor, for example) that the first (second and third) portions of her PLUS loan had been repaid as a sensible precaution in avoiding just what happened.  The inability to get direct information on that loan (because it was in her father's name) is not a valid reason since all she had to do was ask her father to get the information or, as he later did, authorize her to get it.

2.  When the applicant finally applied for repayment of her PLUS loan, PERSCOM properly and promptly sent two checks to her lending institution.  The Army cannot be faulted if her lending institution applied the second check to the wrong loan.  If she needs help in getting that issue resolved, she may contact PERSCOM for assistance.

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

__RVO__  __TBR  _  __DPH __  DENY APPLICATION 

		    Carl W. S. Chun
		    Director, Army Board for Correction
    of Military Records

INDEX

CASE ID	AR2002075154	
SUFFIX		
RECON		
DATE BOARDED	2002/11/07	
TYPE OF DISCHARGE		
DATE OF DISCHARGE		
DISCHARGE AUTHORITY		
DISCHARGE REASON		
BOARD DECISION	DENY	
REVIEW AUTHORITY		
ISSUES         1.	112.12	
2.		
3.		
4.		
5.		
6.