BNUMBER: B-261017
DATE: October 10, 1995
TITLE: Sergeant Paul S. Ferguson-Claim for Reimbursement of
Student Loan Payments
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Matter of:Sergeant Paul S. Ferguson-Claim for Reimbursement of Student
Loan Payments
File: B-261017
Date: October 10, 1995
DIGEST
A member with outstanding student loans enlisted in the National Guard
under an agreement which provided for repayment of his loans. He was
then erroneously advised that he was not eligible for the loan
repayment program and was forced to repay the loans himself. He was
later advised that he was eligible for the program. He may be
reimbursed for the payments he made, up to the maximum allowed.
DECISION
This is in response to an appeal from a Claims Group settlement which
denied the claim of Sergeant Paul S. Ferguson, United States Army
Reserve National Guard, for reimbursement of student loan payments he
made after the National Guard erroneously refused to make the payments
on his behalf. We allow the claim.
In 1985 Sergeant Ferguson enlisted in the National Guard for 8 years
under an agreement which provided for repayment of college loans under
10 U.S.C. 2171. Sergeant Ferguson also enrolled in the Army Reserve
Officer Training Corps (ROTC) in 1985, but resigned soon afterwards
and resumed his enlisted status. On September 6, 1987, he completed
training in his job specialty as required for the loan repayment
program. He was informed in 1987 that his enrollment in ROTC had
terminated his entitlement to student loan repayments. In 1993 it was
determined that Sergeant Ferguson's enrollment in ROTC should not have
caused the termination of his entitlement to loan repayment.
When college loan payments came due, Sergeant Ferguson was obligated
to pay them. He had paid $6,802.44 in principle and interest himself
before he learned in 1993 that his termination from the loan repayment
program in 1987 had been erroneous. In 1993 the National Guard agreed
to make loan payments on behalf of Sergeant Ferguson, but refused to
reimburse Sergeant Ferguson for the payments he himself made.
Under 10 U.S.C. 2171 the Secretary of Defense may repay a portion of
certain student loans of qualified enlisted members. The statute
prohibits refunding of amounts already repaid.
The legislative history of Pub. L. No. 99-145, Title VI, 671(a)(1),
which is the source of 10 U.S.C. 2171, indicates that the purpose of
the statute is to attract high quality personnel to enlist in the
uniformed services through the offer of repayment of student loans.
Therefore, it is our view that 10 U.S.C. 2171(d), the provision
which prohibits the refund of amounts already repaid, pertains to
those who have already repaid their student loans when they enlist and
who then learn of the program and request refund of the loans they
have already repaid.
Sergeant Ferguson had outstanding student loans when he enlisted in
the National Guard in 1985. When the National Guard erroneously
advised Sergeant Ferguson in 1987 that he was not eligible for loan
repayment, loan payments continued to fall due, and he was forced to
make the payments himself.[1] It is our view that the prohibition
against refund of repayment does not apply to a member in Sergeant
Ferguson's situation because he was already entitled to repayment when
an error by the National Guard forced him to make the payments
himself.
Accordingly, to the extent that Sergeant Ferguson has not been
reimbursed for the loan payments he has made, he may be reimbursed up
to the maximum to which he is entitled under the statute, if his claim
is otherwise proper.
/s/Seymour Efros
for Robert P. Murphy
General Counsel
1. Since Sergeant Ferguson's claim was not barred in 1989 when the
regulations were amended to allow filing of claims with the agency
involved as well as with General Accounting Office for the purposes of
the Barring Act, the Claims Group properly determined that his filing
of his claim with the National Guard in 1993 prevented it from being
barred under the Barring Act.