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.