RECORD OF PROCEEDINGS

	IN THE CASE OF:  

	BOARD DATE:           27 January 2004              
	DOCKET NUMBER:   AR2003086767

	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	
	Mrs. Nancy L. Amos		Analyst	

  The following members, a quorum, were present:

	Mr. Arthur A. Omartian		Chairperson	
	Mr. Lester Echols		Member	
	Ms. Yolanda Maldanado		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).

THE APPLICANT'S REQUEST, STATEMENT, AND EVIDENCE:  

1.  The applicant requests payment of her private college loan in the amount of about $10,000.

2.  The applicant states that her contract provided for the payment of her CitiAssist loan; however, she has a letter from Citibank stating it will not be paid.  

3.  The applicant provides the letter as supporting evidence.

CONSIDERATION OF EVIDENCE: 

1.  The applicant's military records show she entered the Delayed Entry Program on 24 August 2001.  Her DA Form 3286-66 (Statement of Understanding, United States Army Incentive Enlistment Program) shows that she enlisted for the LRP up to a maximum repayment of $65,000.  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.  

2.  The applicant annotated her DD Form 1966/4 (Record of Military Processing – Armed Forces of the United States) indicating she had read and understood the Statement of Understanding on the Army Incentive Enlistment Program as outlined on the DA Form 3286-66 and if she had any more questions regarding her educational enlistment [incentive] she would ask her guidance counselor prior to or on her scheduled active duty date.

3.  The applicant's DA Form 3286-59 (United States Army Enlistment Program  U. S. Army Delayed Enlistment Program indicates she had shown "promissory notes" (unidentified) to recruiting officials.

4.  The applicant enlisted in the Regular Army on 23 October 2001 for 4 years.  

5.  On 6 June 2003, the U. S. Total Army Personnel Command (PERSCOM) informed the Board analyst that the applicant had applied for repayment of one qualifying Stafford loan in the amount of $25,125.00.  One-third of that loan has been approved for repayment.  On 9 June 2003, PERSCOM informed the Board analyst that the applicant had not applied for repayment of the CitiAssist Loan; however, PERSCOM stated that sometimes the lending institution itself will inform the member that their loan does not qualify.  

6.  In the processing of this case, on 10 November 2003 an advisory opinion was obtained from the U. S. Army Human Resources Command (formerly PERSCOM).  That command recommended disapproval of the applicant's request, noting that her CitiAssist Loan does not qualify for repayment under the LRP.  That command opined that if the Board decides to grant compensation, they recommended that the computation of any payment be based on the information provided in her case paperwork (DD Form 2475 (DOD Educational Loan Repayment Program (LRP) Annual Application)).  The combined total outstanding balance on the non-qualifying CitiAssist Loan is $9,033.36.

7.  A copy of the advisory opinion was provided to the applicant for comment or rebuttal.  She responded by stating she provided her loans to her recruiter and he promised her they were all good.  Knowing that, she forfeited her right to the Montgomery GI Bill.  Even as the Army drew up her contract, they promised her that all her loans would be paid off.

8.  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.  

9.  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.

10.  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.”

DISCUSSION AND CONCLUSIONS:

1.  The evidence of record shows that the applicant enlisted for the Loan Repayment Program incentive.  It appears she had obtained two student loans prior to her entry on active duty and they were not in default prior to her entry on active duty.  She has applied for repayment of one of those loans and it was approved for repayment.  The other lending institution informed her prior to her first anniversary on active duty, however, that the CitiAssist Loan did not qualify for repayment.

2.  The applicant's DA Form 3286-59 shows that she showed " promissory notes" (plural) to recruiting officials prior to her enlistment.  Despite the wording on her DD Form 1966/4 relegating the responsibility for bringing up questions regarding the LRP incentive to her, it is presumed her recruiting officials saw both promissory notes, as she indicated in her rebuttal to the advisory opinion, and failed to inform her the CitiAssist loan did not qualify for repayment under the LRP.  It is not reasonable for a nonprior service enlistee to be knowledgeable enough to know what is or is not a qualifying loan.  It appears the applicant enlisted in the Regular Army in good faith believing both her student loans qualified for repayment under the LRP.  

3.  The applicant’s military records may be corrected to show her DA Form  3286-66 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 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 Title 10, U.S. Code, section 1552.”  This would allow the    Board to invoke that provision and pay her the amount ($9,033.36) her lending institutions would have been paid under the LRP.

BOARD VOTE:

__aao___  __le____  __ym____  GRANT RELIEF 

________  ________  ________  GRANT FORMAL HEARING

________  ________  ________  DENY APPLICATION

BOARD DETERMINATION/RECOMMENDATION:

The Board determined that the evidence presented was sufficient to warrant a recommendation for relief.  As a result, the Board recommends that all Department of the Army records of the individual concerned be corrected by  amending her DA Form 3286-66 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 Title 10, U.S. Code, section 1552.”

2.  That as a result of the foregoing correction the Defense Finance and Accounting Service shall remit payment to the applicant of the total amount of her CitiAssist loan, in the amount of $9,033.36, to which she is entitled as a result of this correction at the appropriate rate and time.  

		__Arthur A. Omartian__
		        CHAIRPERSON

INDEX

CASE ID	AR2003086767	
SUFFIX		
RECON		
DATE BOARDED	20040127	
TYPE OF DISCHARGE		
DATE OF DISCHARGE		
DISCHARGE AUTHORITY		
DISCHARGE REASON		
BOARD DECISION	GRANT	
REVIEW AUTHORITY	Mr. Schneider	
ISSUES         1.	112.12	
2.		
3.		
4.		
5.		
6.