IN THE CASE OF: BOARD DATE: 28 July 2020 DOCKET NUMBER: AR20180014925 APPLICANT REQUESTS: payment of the remaining $44,083.02 of his existing principle loan balance from the Health Professional Loan Repayment (HPLR) Program. APPLICANT'S SUPPORTING DOCUMENTS CONSIDERED BY THE BOARD: * DD Form 149 (Application for Correction of Military Record) * HPLRP Contract * email correspondence regarding HPLRP * two HPLRP Inquiries * HPLRP Payment Ledger * HPLRP Principle Paid * four Loan Repayment Program Applications * two documents entitled Soldier Information * Lender Verification * HPLRP regulation excerpt * Reserve Pay Digest excerpt FACTS: 1. The applicant states: a. Taxes were withheld from his HPLRP annual payments and were counted as principal payments to the lenders. His beginning student loan principal balance was $149,708.87 and his HPLRP payments to lenders was $105,625.85. He should have approximately $44,083.02 in remaining principal benefit for his student loans. b. His current remaining principal balance is less than $41,515.25 as he has been making payments. He had $101,231.20 remaining out of the original $250,000 benefit. he's been told the amount could not be used towards any remaining principal due to the HPLRP Payment Center records showing the original principal amount had been paid in full. c. They calculated the entire pre-tax disbursement as being a principal payment for each year he received the benefit. No documentation had been presented that stated the withheld taxes were counted towards the principal payment. He would like the remaining overall benefit to apply to his existing principal balance. d. He is very thankful for the benefit he received, but he found it misleading that his principal balance was not paid in full as he contracted. His interpretation was that the withheld taxes were to be counted against the overall loan repayment incentive and not as part of the principal payments to the lenders. e. There is no document or regulation stating specifically that the withheld taxes are counted towards principal payment but there are examples that the entire annual disbursement counts against the overall incentive. f. He began his inquiry through the web enabled education benefit system portal. he spoke with an employee at the HPLRP Payment Center who directed him to contact US Army Human Resources Command (HRC). They recommended contesting the matter with the Board due to the lack of defined regulation or document that clarifies the matter. 2. The applicant’s available service records contain the following documents for the Board's consideration: a. A memorandum from HRC, dated 1 November 2013 appointing the applicant as a Reserve Commissioned officer effective 1 November 2013. b. A DA Form 71 (Oath of Office - Military Personnel) which shows the applicant took the oath of office and appointed as a Reserve commissioned officer in the US Army as a Captain (CPT)/ O-3 on 25 November 2013. c. The applicant’s service record is void of: (1) his enrollment in the HPLR Program (2) documentation on his loans, their amounts and or payments previously made (3) communication with HRC regarding HPLR and no entitlement distributions 3. The applicant provides the following documents for the Board's consideration: a. Pages 1 through 5 of 9 pages of his Statement for Commissioning Army Medical Department United States Army Reserve, dated 25 November 2013, which shows: (1) he applied for and was accepted for the HPLRP incentive in the Area of Concentration 63A – General Dentistry (2) taxes were not withheld from payments made to the institution (3) individuals incurred a tax debt as the payments were considered income that had to be reported (4) payments were made to the principle balance only (5) repayment cannot exceed the outstanding balance and if declared in default by the lender he/she will not be eligible for loan repayment. (6) payments already made cannot be reimbursed (7) the total payment he could get on loans per year was $40,000 per year for six years and the 7th year he would receive $10,000 (8) the total payments for the program would not exceed $250,000 b. A self-authored email to the HPLRP Incentives branch, dated 19 January 2018, which reiterates what the applicant stated in his application. c. A help ticket to the HPLRP Team wherein the response was dated 11 January 2018 and states: (1) for his first loan the unpaid principal was $86,817.86, which was paid (2) for his second loan the unpaid principal was $61,950.91, which was paid (3) any payments the lender received, taxes were withheld (4) loan fees and interest was not repayable under HPLRP d. A consolidated Principal Disbursement Record, which shows the payments of his HPLRP which shows the entire disbursement was counted as principal payment prior to the taxes being withheld. e. A loan ledger which shows he received a total of $86,817.86 repayment on one loan. The loan ledger reflects the entire annual payments were applied to principal when, in fact, after tax dollars were applied to principal. f. Four DD Forms 2475 (Loan Repayment Program Annual Application), all dated 3 November 2017 requesting payment on his loans. g. Two documents entitled Soldier Information, which show the applicant received the HPLRP in the amount of $250,000. h. A help ticket to the HPLRP Team wherein the applicant requests further information regarding the taxes on his repayments. The team member responded on 12 January 2018 attaching a document entitled HPLRP amounts and Army Reserve Pay Digest Taxes Withheld. i. The document received from the HPLRP Team regarding HPLRP amounts, which states HPLRP payments are taxable; therefore, the total amount paid against an officer's loans will never equal the total amount authorized since taxes are deducted from each payment prior to sending the payment to the lender. j. A document entitled Reserve Pay Digest, which states the Defense Finance and Accounting Service began to withhold federal and state taxes from HPRLP payments disbursed after 17 June 2012. The withholding of taxes results in less money paid towards loans. For example if $250 in taxes was withheld from a $1,500 HPLRP payment only $1,250 would be sent to the lender although the remaining HPLRP would be reduced by $1,500. 4. See applicable regulatory guidance below under REFERENCES. BOARD DISCUSSION: After reviewing the application and all supporting documents, the Board found that relief was not warranted as there is insufficient evidence of error or injustice. Per DoDI 6000.13 (Accession and Retention Policies, Programs, and Incentives for Military Health Professions Officers (HPOs)), HPRLP payments are subject to tax withholding and the total amount of monies paid cannot exceed the loan amount. Therefore, there is no basis on which to grant the applicant’s request. BOARD VOTE: Mbr 1 Mbr 2 Mbr 3 : : : GRANT FULL RELIEF : : : GRANT PARTIAL RELIEF : : : GRANT FORMAL HEARING : : : DENY APPLICATION BOARD DETERMINATION/RECOMMENDATION: The evidence presented does not demonstrate the existence of a probable error or injustice. Therefore, the Board determined the overall merits of this case are insufficient as a basis for correction of the records of the individual concerned. I certify that herein is recorded the true and complete record of the proceedings of the Army Board for Correction of Military Records in this case. REFERENCES: 1. Title 10 United States Code 16302 states that the Health Professionals Loan Repayment Program (HPLRP) is designed to repay designated loans secured by eligible health professions officers serving in Selected Reserve with wartime critical medical skill shortages. Loans that are considered eligible for repayment are loans that were secured for the first qualifying degree that qualified the officer for the area of concentration which they were commissioned. With the exception of certain Physician Assistant programs, undergraduate and prerequisite courses for admittance into a qualifying degree program, like medical and dental school is not authorized for repayment. Health professional critical specialties will be identified and authorized for the HPLRP in annual HQDA policy guidance. 2. Army Regulation 621-202 (Army Educational incentives and Entitlements) states that the HPLRP will repay outstanding loan(s) that were secured according to 10 USC 16302, to finance health professional education approved by the Secretary of Defense as a critical specialty needed to meet wartime, combat medical skill shortages. Paragraph 8-5 (Entitlement) states that on each anniversary date, any authorized loan will be considered eligible for repayment that: * has an outstanding balance on the principal * has been secured for at least 1 year prior to the current anniversary date * the designated amount of repayment to be made on the anniversary date of those agreements are established as follows: (1) The maximum gross aggregate per year the amount authorized in the annual SRIP guidance for that component, or the remaining balance of the loan(s), whichever is less. (2) Total program repayment for all years will not exceed the statutory lifetime cap listed in the AMEDD incentives policy at the time the contract is signed. (3) The designated amount of repayment to be made on the anniversary date of eligible loan(s) (the maximum aggregate per year) is the amount authorized in the annual SRIP guidance for that component or the remaining balance of the loan(s), whichever is less. * The following repayment restrictions apply: (1) The repayment cannot exceed the outstanding balance. (2) The agreement, DA Form 5536, does not change the officer's obligation to the lender or holder of the note(s). (3) Refunds of payments on previous loans made by the Service member will not be reimbursed. 3. DoDI 6000.13 (Accession and Retention Policies, Programs, and Incentives for Military Health Professions Officers (HPOs)) establishes policy, assign responsibilities, and prescribe procedures for Military Department payment of incentives and bonuses to HPOs. For Reserve Component (RC) HPLRP (RCHPLRP) it states: a. Qualified loans to participants are for the actual costs paid for tuition and other reasonable educational expenses and reasonable living expenses relating to the attainment of a degree in a health profession eligible for the RCHPLRP. Qualified loans must have documentation that indicates the loan was incurred concurrently with the training received in a health professions school. If health professions educational loans are refinanced, the original documentation of the loan(s) will be submitted to the Secretary concerned to establish the simultaneous nature of such loans. The loan must have been secured at least 1 year before the repayment date. b. A RCHPLRP loan repayment may consist of payment of the principal, interest, and related expenses of a loan obtained by an eligible person for reasonable educational expenses and reasonable living expenses incurred during attendance at an accredited educational institution. c. The amount of repayment of any loan on behalf of any officer will be determined on the basis of each complete year of satisfactory service as an officer in the SELRES and performed by the officer after the date on which the loan was made. d. The annual maximum award amount that the Secretary concerned may grant a program participant will be issued in the HPS&I pay plan. The repayment will not exceed the outstanding balance. The borrower will not be reimbursed for payments already made on loans. e. The loan repayments will be paid to the lending institution on behalf of the officer. Loans in default are not authorized for repayment. f. Loan repayment benefits are taxable, requiring that a portion of the annual benefit be withheld for tax and not be paid to the lending institution. The officer is responsible for paying the portion of the benefit representing taxes withheld to the lending institution. This provision is to be applied in accordance with current tax authority. //NOTHING FOLLOWS// ABCMR Record of Proceedings (cont) AR20180014925 6 ARMY BOARD FOR CORRECTION OF MILITARY RECORDS RECORD OF PROCEEDINGS 1