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An entry level performance separation under Chapter 11 would not stop someone from getting VA assistance for a service connected injury. They just couldn't get overall medical coverage. So, I think you've got some bad information there.
For her to be able to fight this, she has to complete whatever separation process the Army is going through, making her written complaints during each phase of that separation. She hasn't been in long enough to be entitled to a board hearing, so there really isn't any forum for her to argue at right now. Unfortunately, her real ability to fight this takes places after she is separated. She can then file a DD Form 293 with the discharge review board, a separate entity that reviews separations for legal sufficiency and injustice. There she could get a discharge status overturned and, more importantly, her reenlistment code overturned so that she could go to basic.