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ISCR Case 21-02722 — CASE

ISCR Case 21-02722unknown

Case Headnote

ISCR Case No. 21-02722

Apr 6, 2023· Hon. Moira D. Modzelewski· appeal

Summary

This security clearance case, decided under Guideline F (Financial Considerations), involved an applicant representing herself who faced denial due to eight delinquent student loans totaling approximately $24,000. The initial decision cited Disqualifying Condition F.3, indicating a history of not meeting financial obligations.

However, the appeal board remanded the case for further review. The board found that the judge had overlooked the potential impact of a class action lawsuit on the applicant's student loans. This remand specifically requires a reassessment of the applicant's debts in light of actions taken by the Department of Education regarding loan discharges, which could significantly alter the status of her financial obligations.

While Mitigating Condition F.2 (the debt was not recent, or the applicant has initiated a good-faith effort to resolve the debt) was considered, the ultimate outcome was "None," as the case was sent back for additional consideration rather than a final determination.

Conditions Referenced

Disqualifying

F.3raisedInability or Unwillingness to Satisfy Debts

Mitigating

F.2rejectedThe Conditions That Resulted in the Financial Problem Were Largely Beyond the Person's ControlThe judge found the applicant's actions to address the debts were insufficient.

Key Rule Quoted

“The Judge may reopen the record to receive additional evidence from the parties.”

Procedural Posture

SOR issuedFeb 18, 2022
Answer filed—
Hearing heldFeb 14, 2023after the record closed
Decision dateApr 6, 2023remanded for corrective action

Cite For

Remand for Consideration of the Impact of Class Action Lawsuits on Student Loan Debts
Reassessment of Financial Considerations Under Guideline F
Impact of Department of Education Actions on Applicant's Debts

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. The Applicant argued that the Judge overlooked evidence related to a class action lawsuit affecting her debts. The Board found this oversight significant and remanded the case for further consideration of the evidence.

Appealed bythe applicant

Applicant representationPro se (self-represented)

Judge belowRichard A. Cefola — denied the clearance (split findings)

Decided ona hearing

Guidelines belowGuideline F

What the Board reviewed

Judge mis-weighed or ignored evidence — raised by the applicantError sustained
The Judge overlooked the impact of a class action lawsuit on the Applicant's student loan debts.

Why the Board ruled this way

The Judge failed to consider the impact of a class action lawsuit on the Applicant's student loan debts, which may affect the outcome of the case. The Board remanded the decision for corrective action to address this oversight.

Ignored material evidence

On remand, the judge must

The Judge must determine the impact of DOE’s action on Applicant’s student loans and may reopen the record to receive additional evidence from the parties.

Standard of review applied

Harmful-error gatekeeperSubstantial-evidence reviewNo 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. 21-02722

)

) 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: April 6, 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 February 18, 2022, 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 hearing. On February 14, 2023, after the record closed, Defense Office of Hearings and Appeals (DOHA) Administrative Judge Richard A. Cefola 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 eight delinquent Department of Education (DoE) student loans totaling about $24,000, two medical debts totaling about $970, and two other debts totaling about $4,400. The Judge found in favor of Applicant on the medical debts and against her

on the other allegations. For reason stated below, we remand the Judge’s decision for corrective action. Applicant’s student loan debt resulted from her attendance at two institutions. Tr. at 24-39. She began attending College A in 2009 but stopped after her first semester for personal reasons. Tr. at 25. Several years later, she began attending College B, but was again unable to complete her degree. Tr. at 25-26. In or around January 2020, she applied for a program to wipe away her student loan debt resulting from her attendance at College B (SOR ¶¶ 1.a, 1.d-1.f, 1.h, 1.i). Tr. at 34, 38; Government Exhibit 5. Applicant testified that she did not apply for discharge of the loans associated with her attendance at College A (SOR ¶¶ 1.cand 1.g.) and that she planned to enter a repayment plan for those accounts. Tr. at 32-34. Post-hearing, Applicant offered into evidence two documents that were cumulatively marked as Applicant’s Exhibit A. The first document is an excerpt from a DoE Loan Rehabilitation application dated October 11, 2022. Applicant Exhibit A at 1-2. The second document includes an August 18, 2022, notice from DoE informing Applicant that her class action lawsuit related to her student loan discharge application was pending a proposed settlement. Applicant Exhibit A at 3-10. The Judge found that Applicant submitted a loan rehabilitation request, noted she attended one of the schools more than a decade ago, and described her action as “too little, too late.” Decision at 2. The Judge appears to have inadvertently overlooked the second document included in Exhibit A regarding Applicant’s inclusion in the class action lawsuit pending settlement, and therefore failed to consider the impact of that action, if any, on some portion of Applicant’s student loan debts. On November 16, 2022, a Federal court approved a settlement in the class action lawsuit, which affects the processing of borrower defense applications filed on or before November 15, 2022, and identifies borrowers whose applications for borrower defense discharges were pending as of June 22, 2022, as “Class Members.” See https://studentaid.gov/announcements-events/sweet settlement. Appeal Exhibit 1. For members of that class action lawsuit, the DOE press release indicates that Federal student loans associated with the member’s attendance at the listed schools will be discharged, DoE will refund amounts paid on those loans, and credit tradelines for those loans will be deleted from the member’s credit report. In ISCR Case No. 21-01688 (App. Bd. Jan. 30, 2023), the Appeal Board took administrative notice of a DoE press release addressing the discharge of student loans and remanded the Judge’s decision so that he could consider the impact of DoE’s action on the alleged debts. See also ISCR Case No. 20-03688 (App. Bd. Mar. 2, 2023), a remand involving this same type of issue. We take that same action here. Based on the foregoing, the Judge’s decision is remanded so that he may determine the impact of DOE’s action on Applicant’s student loans, which make up most of the alleged debt. 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