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ISCR Case 20-03688 — CASE

ISCR Case 20-03688unknown

Case Headnote

ISCR Case No. 20-03688

Mar 2, 2023· Hon. Moira D. Modzelewski· appeal

Summary

An applicant, representing himself, faced a security clearance denial under Guideline F (Financial Considerations) due to significant unresolved debts. The applicant had 12 delinquent student loans totaling approximately $74,000, along with 10 other debts amounting to about $10,000. These financial issues were identified as disqualifying conditions under Adjudicative Guideline (AG) ¶ 19.

While mitigating conditions AG ¶ 20(b) and AG ¶ 20(e) were considered, the debts were ultimately found to be unresolved. Consequently, the appeal was remanded for further examination. This remand specifically focused on the Department of Education's actions concerning the applicant's student loans, as these actions could potentially influence the final determination of the allegations.

As of the current decision, no final outcome has been reached regarding the applicant's security clearance.

Conditions Referenced

Disqualifying

AG ¶ 19raisedFinancial Considerations

Mitigating

AG ¶ 20(b)appliedClear Victimization by Predatory Lending Practices
AG ¶ 20(e)appliedA Reasonable Basis to Dispute the Legitimacy of the Past-due Debt

Key Rule Quoted

“The evidence shows that for years, ITT’s leaders intentionally misled students about the quality of their programs in order to profit off federal student loan programs with no regard for the hardship this would cause.”
— DoE press release of August 16, 2022

Procedural Posture

SOR issuedJun 25, 2021
Answer filedDec 3, 2021Government's File of Relevant Material mailed to applicant.
Hearing heldDec 20, 2022Decision issued by Administrative Judge David M. White.
Decision dateMar 2, 2023Decision remanded for further examination.

Cite For

Remand for Further Examination of Financial Circumstances Under Guideline F
Impact of Department of Education's Actions on Student Loans
Application of Mitigating Conditions Related to Predatory Lending Practices.

Editorial summary generated for research. Not legal advice; not a prediction. Verify against the full decision before relying on any quoted language.

Appeal at a glance· Full written decision

Remanded

The appeal involved a denial of a security clearance based on financial considerations, specifically delinquent student loans and other debts. The applicant argued that the Judge did not adequately consider new evidence regarding the status of the loans and the Department of Education's actions. The Board remanded the case for further processing and consideration of this evidence.

Appealed bythe applicant

Applicant representationPro se (self-represented)

Judge belowDavid M. White — denied the clearance

Decided onthe written record

Guidelines belowGuideline F

What the Board reviewed

Decision arbitrary, capricious, or contrary to law — raised by the applicantError sustained
The Judge's decision was arbitrary and capricious in failing to consider the impact of the Department of Education's actions regarding the applicant's student loans.

Why the Board ruled this way

The Board found that the Judge failed to consider significant evidence regarding the applicant's student loans and the implications of the Department of Education's actions, necessitating a remand for further evaluation.

Ignored material evidence

On remand, the judge must

The Judge must determine the impact of the Department of Education's action on the applicant's student loans and re-evaluate the application of mitigating conditions.

Standard of review applied

Harmful-error gatekeeperSubstantial-evidence reviewArbitrary-and-capricious reviewProcedural complianceNo de-novo re-decisionNo new evidence on appeal

Appeal Board panel

James F. Duffy — Chair
Moira Modzelewski
Allison Marie

Descriptive structured reading of this decided, public Appeal Board decision — what the case says, not a prediction or advice.

Full decision

The complete, official text — footnotes and signatures included — is in the original PDF.

Decision text, by section

DEFENSE OFFICE OF HEARINGS AND APPEALS

APPEAL

APPEARANCES

_______________________________________________ ) In the matter of: )

)

----- )

ISCR Case No. 20-03688

)

) Applicant for Security Clearance ) _______________________________________) DEPARTMENT OF DEFENSE DEFENSE LEGAL SERVICES AGENCY DEFENSE OFFICE OF HEARINGS AND APPEALS APPEAL BOARD POST OFFICE BOX 3656 ARLINGTON, VIRGINIA 22203 (703) 696-4759 Date: March 2, 2023

APPEAL BOARD DECISION

APPEARANCES

FOR GOVERNMENT James B. Norman, Esq., Chief Department Counsel FOR APPLICANT Pro se The Department of Defense (DoD) declined to grant Applicant a security clearance. On June 25, 2021, DoD issued a statement of reasons (SOR) advising Applicant of the basis of that decision―security concerns raised under Guideline F (Financial Considerations) of DoD Directive 5220.6 (January 2, 1992, as amended) (Directive). Applicant requested a decision on the written record. Department Counsel mailed the Government’s File of Relevant Material (FORM) to Applicant on December 3, 2021, and afforded him an opportunity to file objections or submit material in refutation, extenuation, or mitigation. Applicant responded to the FORM by providing additional comments for the Judge to consider. On December 20, 2022, after the record closed, Defense Office of Hearings and Appeals (DOHA) Administrative Judge David M. White denied Applicant’s request for a security clearance. Applicant appealed pursuant to Directive ¶¶ E3.1.28 and E3.1.30.

The SOR alleged that Applicant had 12 delinquent Department of Education (DoE) student loans totaling about $74,000 and that he had 10 other delinquent debts totaling about $10,000. The Judge found against Applicant on each of the SOR allegations. For reason stated below, we remand the Judge’s decision for corrective action. Applicant’s student loans arose from his attendance at ITT Technical Institute (ITT) between 2009 and 2013, from which he was awarded associate’s and bachelor’s degrees. In the decision, the Judge noted that Applicant supplied a letter from DoE stating that collection activity on his student loans was suspended pending further review. In his response to the FORM, Applicant stated his student loans would either be forgiven or he would begin a repayment plan as soon as possible to bring those loans into good standing. The Judge concluded that those loans remained unresolved. In ISCR Case No. 21-01688 (App. Bd. Jan. 30, 2023), the Appeal Board recently addressed the issue of a Judge taking administrative notice, sua sponte, of DoE’s action to discharge ITT student loans. In that decision, we took administrative notice of a DoE press release of August 16, 2022. See https://www.ed.gov/news/press-releases/education-department-approves-39-billion group-discharge-208000-borrowers-who-attended-itt-technical-institute. We again take admin istrative notice of that press release, in which the Secretary of Education is quoted as saying: It is time for student borrowers to stop shouldering the burden from ITT’s years of lies and false promises[.] . . . The evidence shows that for years, ITT’s leaders intentionally misled students about the quality of their programs in order to profit off federal student loan programs with no regard for the hardship this would cause. [Appeal Board Exhibit 1.] The Judge’s decision is remanded so that he may determine the impact of DOE’s action and the rationale for said action on Applicant’s student loans, which make up most of the alleged debt. In his appeal brief, Applicant provides new evidence, including a DoE document indicating that his student loan balance was $32,238 as of January 2, 2023, and that those loans are in forbearance. Applicant also presents new evidence regarding other alleged debts. In his reply brief, Department Counsel argues that the discharge, non-collectability, or unenforceability of a debt does not necessarily eliminate “concerns over an applicant’s poor judgment as evidenced by the manner in which an applicant accumulated and addressed [the] debt.” Reply Brief at 5. We do not find that argument convincing given the reasons why the ITT student loans were discharged. In the present case, the application of Mitigating Condition 20(b), which addresses “clear victimization by predatory lending practices,” Mitigating Condition 20(e), which addresses “a reasonable basis to dispute the legitimacy of the past-due debt[,]” as well as other mitigating conditions merit further examination in light of DoE’s action. See Directive, Encl. 2, App. A ¶¶ 20(a)–20(e). Based on the foregoing, we remand this case to the Judge for further processing consistent with the Directive. The Judge may reopen the record to receive additional evidence from the parties. On remand, the Judge is required to issue a new decision. Directive ¶ E3.1.35. The Board

retains no continuing jurisdiction over a remanded decision. However, a Judge’s decision issued after remand may be appealed pursuant to Directive ¶¶ E3.1.28. and E3.1.30.

ORDER

The decision is REMANDED. Signed: James F. Duffy James F. Duffy Administrative Judge Chairperson, Appeal Board Signed: Moira Modzelewski Moira Modzelewski Administrative Judge Member, Appeal Board Signed: Allison Marie Allison Marie Administrative Judge Member, Appeal Board