B-148397, MAY 1, 1962

B-148397: May 1, 1962

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AMOUNTS TOTALING THE SUM OF $159 WERE ADVANCED TO YOU FOR PURSUING AN ACCELERATED PROGRAM OF STUDY IN ENGINEERING AT THE ABOVE NAMED COLLEGE. INDICATES YOU WERE ADVISED BY THE DRAFT BOARD THAT YOUR CALL WOULD COME SOON AFTER ENTERING THE FALL TERM OF SCHOOL AND THAT YOU ASKED TO BE CALLED INTO SERVICE PRIOR TO BEGINNING OF THE SCHOOL TERM. ON WHICH DATE YOU WERE INDUCTED IN THE ARMY AND PLACED IN INACTIVE RESERVE UNTIL YOUR CALL TO ACTIVE DUTY ON JULY 2. YOUR STUDENT WAR LOAN WAS AUTHORIZED BY THE APPROPRIATION "LOANS TO STUDENTS IN TECHNICAL AND PROFESSIONAL FIELDS (NATIONAL DEFENSE)" UNDER THE HEADING "OFFICE OF EDUCATION" CONTAINED IN TITLE II OF THE LABOR- FEDERAL SECURITY APPROPRIATION ACT.

B-148397, MAY 1, 1962

TO MR. MELVILLE E. BLAKE, JR.:

YOUR LETTERS OF JANUARY 22, 1962, AND JANUARY 25, 1962, REQUESTED A REVIEW OF THE CLAIM OF THE UNITED STATES AGAINST YOU IN THE AMOUNT OF $159 PLUS ACCRUED INTEREST REPRESENTING THE AMOUNT OF A STUDENT WAR LOAN OBTAINED BY YOU WHILE ATTENDING MISSISSIPPI STATE COLLEGE IN1943.

THE RECORD INDICATES THAT UNDER A NOTE EXECUTED ON JANUARY 25, 1943, AMOUNTS TOTALING THE SUM OF $159 WERE ADVANCED TO YOU FOR PURSUING AN ACCELERATED PROGRAM OF STUDY IN ENGINEERING AT THE ABOVE NAMED COLLEGE. LATE IN APRIL 1943 YOU CONTACTED YOUR LOCAL DRAFT BOARD FOR THE PURPOSE OF ASCERTAINING APPROXIMATELY WHEN YOU COULD EXPECT TO BE INDUCTED. STATEMENT FROM THE FORMER CLERK OF LOCAL BOARD NO. 2, HOLMES COUNTY, MISSISSIPPI, INDICATES YOU WERE ADVISED BY THE DRAFT BOARD THAT YOUR CALL WOULD COME SOON AFTER ENTERING THE FALL TERM OF SCHOOL AND THAT YOU ASKED TO BE CALLED INTO SERVICE PRIOR TO BEGINNING OF THE SCHOOL TERM. YOU DISCONTINUED YOUR STUDIES AT MISSISSIPPI STATE COLLEGE ON MAY 21, 1943. INDUCTION ORDER NO. V-11, 752 DATED JUNE 7, 1943, ORDERED YOU TO REPORT FOR PHYSICAL EXAMINATION AND INDUCTION ON JUNE 17, 1943, ON WHICH DATE YOU WERE INDUCTED IN THE ARMY AND PLACED IN INACTIVE RESERVE UNTIL YOUR CALL TO ACTIVE DUTY ON JULY 2, 1943.

YOUR STUDENT WAR LOAN WAS AUTHORIZED BY THE APPROPRIATION "LOANS TO STUDENTS IN TECHNICAL AND PROFESSIONAL FIELDS (NATIONAL DEFENSE)" UNDER THE HEADING "OFFICE OF EDUCATION" CONTAINED IN TITLE II OF THE LABOR- FEDERAL SECURITY APPROPRIATION ACT, 1943, 56 STAT. 576, WHICH PROVIDES IN PERTINENT PART:

"LOANS HEREUNDER SHALL BE MADE IN AMOUNTS NOT EXCEEDING TUITION AND FEES PLUS $25 PER MONTH AND NOT EXCEEDING A TOTAL OF $500 TO ANY ONE STUDENT DURING ANY TWELVE-MONTH PERIOD, SAID LOANS TO BE EVIDENCED BY NOTES EXECUTED BY SUCH STUDENTS PAYABLE TO THE TREASURER OF THE UNITED STATES AT A RATE OF INTEREST AT 2 1/4 PERCENTUM PER ANNUM. REPAYMENTS OF SUCH LOANS SHALL BE MADE THROUGH THE COLLEGES, UNIVERSITIES, OR OTHER AGENCIES NEGOTIATING THE LOANS AND COVERED INTO THE TREASURY AS MISCELLANEOUS RECEIPTS: PROVIDED, THAT INDEBTEDNESS OF STUDENTS WHO, BEFORE COMPLETING THEIR COURSES, ARE ORDERED INTO MILITARY SERVICE DURING THE PRESENT WARS UNDER THE SELECTIVE TRAINING AND SERVICE ACT OF 1940, AS AMENDED, OR WHO SUFFER TOTAL AND PERMANENT DISABILITY OR DEATH, SHALL BE CANCELED. THE FOREGOING LOAN PROGRAM SHALL BE ADMINISTERED IN ACCORDANCE WITH REGULATIONS PROMULGATED BY THE COMMISSIONER OF EDUCATION WITH THE APPROVAL OF THE CHAIRMAN OF THE WAR MANPOWER COMMISSION.'

SECTION 3.8 (D) OF THE REGULATIONS, PROMULGATED BY THE COMMISSIONER OF EDUCATION WITH THE APPROVAL OF THE CHAIRMAN OF THE WAR MANPOWER COMMISSION PURSUANT TO THE FOREGOING PROVISION OF LAW AND PUBLISHED ON AUGUST 26, 1942, (7 F.R. 6747, 6748), PROVIDES:

"CANCELLATION OF LOANS. IF ANY BORROWER BEFORE COMPLETING HIS COURSE OF STUDY IS ORDERED INTO MILITARY SERVICE DURING THE PRESENT WARS UNDER THE SELECTIVE TRAINING AND SERVICE ACT OF 1940, AS AMENDED, THE TOTAL UNPAID PRINCIPAL AMOUNT OF HIS LOANS AND INTEREST SHALL BE CANCELLED. IF ANY BORROWER SUFFERS TOTAL AND PERMANENT DISABILITY OR DEATH THE UNPAID PRINCIPAL AMOUNT OF HIS LOANS AND INTEREST THEREON SHALL BE CANCELLED. THE INSTITUTION OR AGENCY SHALL REPORT TO THE COMMISSIONER ALL STUDENTS ENTITLED TO SUCH CANCELLATION.'

IN AN UNDATED MEMORANDUM, WHICH WE UNDERSTAND WAS ISSUED BY THE OFFICE OF EDUCATION ON MARCH 17, 1943, IT WAS STATED:

"IT SHOULD BE ESPECIALLY NOTED THAT STUDENTS WHO ENTERED ANY RESERVE PROGRAM OF THE ARMY OR NAVY PRIOR TO THEIR ACCEPTANCE OF A STUDENT WAR LOAN AND ARE SUBSEQUENTLY CALLED TO ACTIVE DUTY ARE DEEMED TO HAVE ENTERED THE SERVICE VOLUNTARILY AND ARE THEREFORE ENTITLED ONLY TO DEFERMENT OF THEIR OBLIGATIONS. IN THE SAME MANNER STUDENTS WHO ENTERED A RESERVE PROGRAM AFTER ACCEPTANCE OF A LOAN AND WHO ARE CALLED TO ACTIVE DUTY ARE ENTITLED ONLY TO DEFERMENT. LIKEWISE, STUDENTS WHO VOLUNTEER FOR INDUCTION IN ORDER TO ENTER OFFICERS CANDIDATE SCHOOLS OR OTHER PROGRAMS ARE ENTITLED ONLY TO DEFERMENT. ONLY STUDENTS WHO ARE INDUCTED (DRAFTED) UNDER THE SELECTIVE TRAINING AND SERVICE ACT OF 1940 BEFORE COMPLETING THEIR COURSES OR WHO SUFFER DEATH OR PERMANENT DISABILITY AT ANY TIME ARE UNDER THE LAW ENTITLED TO CANCELLATION OF THEIR OBLIGATIONS. * * *"

THE DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE, BY LETTER OF NOVEMBER 14, 1957, INFORMED US THAT---

"IT WAS FELT, ON THE BASIS OF THE LEGISLATIVE HISTORY OF THE PROGRAM,THAT THE CONGRESS DID NOT INTEND TO CANCEL THE LOANS OF THOSE WHO VOLUNTARILY ENLISTED IN THE RESERVE CORPS, THROUGH WHICH THEY WERE SUBJECT TO CALL TO ACTIVE DUTY AT ANY TIME, OR ADVANCED THE DATE OF THEIR INDUCTION BY VOLUNTEERING. OTHERWISE, A STUDENT COULD REAP ALL OF THE BENEFITS OF THE PROGRAM BUT INTENTIONALLY EVADE REPAYMENT OF HIS LOAN BY VOLUNTARILY ENTERING THE ARMED FORCES JUST BEFORE HIS COURSE WAS COMPLETED.'

THE ORIGINAL STUDENT WAR LOAN PROGRAM PROPOSED TO THE CONGRESS BY THE BUREAU OF THE BUDGET CONTAINED A VERY BROAD CANCELLATION PROVISION. THE HOUSE COMMITTEE ON APPROPRIATIONS REJECTED THE ENTIRE STUDENT WAR LOAN PROGRAM, ONE OF THE REASONS GIVEN BEING THAT THE PROGRAM WAS MORE OF A GIFT THAN A LOAN PROGRAM. HOUSE REPORT 2200, 77TH CONGRESS, P. 18. THE COMMITTEE REPORT STATED ,IT IS EXTREMELY DOUBTFUL WHETHER ANY OF THE SO- CALLED LOANS WOULD EVER BE REPAID AS EACH STUDENT WOULD BE ABLE TO SECURE CANCELLATION OF HIS NOTE BY ENTERING THE ARMED FORCES OR ACCEPTING CERTAIN TYPES OF EMPLOYMENT.' ALSO, SEE CONGRESSMAN HARE'S STATEMENT IN 88 CONG.REC. 5806 THAT "THE OTHER REASON ADVANCED WAS THAT MUCH OF THE MONEY PROBABLY WOULD NOT BE REPAID.' A MODIFIED VERSION OF THE ORIGINAL LANGUAGE WAS INTRODUCED BY SENATOR MCCARRAN ON THE FLOOR OF THE SENATE DURING CONSIDERATION OF THE LABOR-FEDERAL SECURITY APPROPRIATION ACT, 1943, WHICH CONTAINED THE CANCELLATION PROVISION AS FINALLY ENACTED. EXPLAINING THE CANCELLATION PROVISION ON THE SENATE FLOOR, SENATOR MCCARREN STATED "IF THE STUDENT IS CALLED INTO THE MILITARY SERVICE OF THE UNITED STATES, THE OBLIGATION WILL BE ENTIRELY LIQUIDATED.' 88 CONG.REC. 5599. AFTER THIS PROVISION PASSED THE SENATE AND DURING ITS CONSIDERATION ON THE FLOOR OF THE HOUSE, CONGRESSMAN HARE STATED "AND LET ME SAY THAT UNDER THIS NO LOAN WILL BE CANCELED UNLESS THE MAN IS CALLED INTO THE SERVICE BEFORE HE COMPLETES HIS COURSE IN MEDICINE, ENGINEERING, PHARMACY, AND SO FORTH; THAT IS THE ONLY CONDITION UPON WHICH IS LOAN WILL BE CANCELED.' 88 CONG.REC. 5807. HE SUBSEQUENTLY STATED FURTHER "THE ONLY TIME HIS OBLIGATION IS CANCELED IS IF HE HAS PURSUED HIS COURSE 1 OR 2 YEARS AND HAS NOT COMPLETED HIS COURSE AND HE IS CARRIED INTO THE SERVICE, THEN HIS NOTE IS CANCELED.' 88 CONG.REC. 5808. WITH THIS UNDERSTANDING, THE HOUSE OF REPRESENTATIVES FINALLY AGREED TO A MODIFIED STUDENT LOAN PROGRAM.

THUS IT IS CLEAR THAT THE CONGRESS INTENDED TO PERMIT CANCELLATION OF A STUDENT WAR LOAN, EXCEPT FOR DEATH OR DISABILITY, ONLY IN THE CASE WHERE THE STUDENT WAS INVOLUNTARILY ORDERED INTO MILITARY SERVICE UNDER THE SELECTIVE TRAINING AND SERVICE ACT OF 1940, AS AMENDED. CONSIDERING THE LEGISLATIVE HISTORY AS A WHOLE AND THAT, IF THE LAW WAS OTHERWISE CONSTRUED, A STUDENT COULD INTENTIONALLY EVADE REPAYMENT OF HIS LOAN BY VOLUNTARILY ENTERING THE MILITARY SERVICE BEFORE COMPLETING HIS COURSE, WE FEEL THAT THE ADMINISTRATIVE INTERPRETATION OF THE LAW AND THE REGULATIONS THEREUNDER ARE PROPER.

THE RECORD IN YOUR CASE INDICATES THAT YOU APPEARED BEFORE YOUR LOCAL DRAFT BOARD VOLUNTARILY AND, AFTER ASCERTAINING THE APPROXIMATE DATE OF YOUR CALL IN ACCORDANCE WITH YOUR ORDER NUMBER, YOU REQUESTED AN EARLIER CALL IN ORDER TO AVOID AN INVOLUNTARY CALL UP DURING A SCHOOL SEMESTER. THUS YOU ADVANCED YOUR INDUCTION BY SEVERAL MONTHS BY YOUR APPEARANCE BEFORE THE LOCAL DRAFT BOARD. UNDER REGULATIONS OF THE SELECTIVE SERVICE SYSTEM IN EFFECT AT THAT TIME, IT WAS NECESSARY FOR YOU TO FILE AN APPLICATION FOR VOLUNTARY INDUCTION IN ORDER TO BE INDUCTED AT AN EARLIER DATE. UNDER THESE REGULATIONS THE DRAFT BOARD WAS REQUIRED TO INSERT THE LETTER "V" IN FRONT OF YOUR ORDER NUMBER WHICH WAS REFLECTED IN YOUR ORDER TO REPORT FOR INDUCTION. UNDER THE CIRCUMSTANCES IT MUST BE CONCLUDED THAT YOUR EARLY INDUCTION WAS THE RESULT OF VOLUNTARY ACTION ON YOUR PART AND THUS DOES NOT MEET THE REQUIREMENTS FOR CANCELLATION OF SUCH STUDENT LOANS WITHIN THE MEANING OF THE PROVISIONS OF THE LAW QUOTED ABOVE.

THE PRINCIPAL AMOUNT DUE ON YOUR LOAN IS $159 AND THE INTEREST COMPUTED THROUGH APRIL 30, 1962, IS $76.40. AT THAT TIME A TOTAL OF $235.40 WILL BE REQUIRED TO PAY YOUR LOAN IN FULL. PAYMENT SHOULD BE MADE AS DIRECTED IN OFFICE LETTER OF NOVEMBER 2, 1961.