ISCR Case 21-01983

Case Headnote

ISCR Case No. 21-01983

grantedMay 11, 2023· Hon. Roger C. Wesley· hearing

Summary

A 41-year-old defense contractor was granted a security clearance despite initial concerns under Guideline F (Financial Considerations) regarding over $93,000 in delinquent student loans. The Statement of Reasons detailed nine delinquent Department of Education student loans exceeding $40,000 and two other federally guaranteed delinquent student loans exceeding $53,000, accumulated between 2018 and 2021. These financial issues arose during recurrent periods of unemployment and medical inability to work, including a foot injury in 2019 and contracting COVID-19 in December 2021, which led to over three months of missed work.

The applicant's student loans were in forbearance through 2017 and early 2018, and once lifted in 2019, he was unable to address them financially, leading to collection status. However, by May 2021, rehabilitated student loans were returned to his servicing agent, and by December 2021, an Executive Order placed his outstanding loans in deferment. All but $38,763 of his accrued delinquent student loans have since been forgiven and discharged, with the remaining loans currently in good standing.

The administrative judge found that the applicant demonstrated a meaningful track record of debt reduction through loan rehabilitation. His financial difficulties were largely due to circumstances beyond his control, such as job loss and medical issues. With a job promotion and salary increase, the applicant expects to meet his student loan demands once the payment pause is lifted in October 2023. The clearance was granted, as he presented a credible plan to meet future obligations.

Why the Applicant Prevailed

The applicant demonstrated a meaningful track record of debt reduction through rehabilitation of student loans.
The applicant's financial difficulties were largely due to circumstances beyond his control, including job loss and medical issues.
The applicant's remaining student loans are currently in good standing and he has a credible plan to meet future obligations.

Conditions Referenced

Disqualifying

DC ¶ 19(a)raisedInability to Satisfy Debts
DC ¶ 19(c)raisedA History of Not Meeting Financial Obligations

Mitigating

MC ¶ 20(b)appliedThe Conditions That Resulted in the Financial Problem Were Largely Beyond the Person’s Control
MC ¶ 20(d)appliedThe Individual Has a Meaningful Track Record of Debt Reduction

Key Rule Quoted

“Eligibility for access to classified information may only be granted "upon a finding that it is clearly consistent with the national interest to do so."”
— Exec. Or. 10865, Safeguarding Classified Information within Industry § 2 (Feb. 20, 1960), as amended.

Procedural Posture

SOR issuedFeb 1, 2022
Answer filedApr 26, 2022
Hearing heldMar 10, 2023via Microsoft Teams Teleconference Services
Decision dateMay 11, 2023

Cite For

Demonstrating Financial Recovery Under Guideline F
Mitigating Financial Issues Due to Circumstances Beyond Control
Importance of a Meaningful Track Record in Debt Management

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

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant allegedly accumulated nine delinquent Department of Education (DoE) student loans exceeding $40,000 and two other federally guaranteed delinquent student loans exceeding $53,000. Allegedly, Applicant’s student loans remain unresolved and outstanding. $93,000	For Applicant	Student Loan Debt	Denied	—	(d) good-faith effort to repay or otherwise resolve debts	Claimed Debt Paid in Full Documented Rehabilitation Evidence
1.b	Allegedly, Applicant’s student loans remain unresolved and outstanding.	For Applicant	Student Loan Debt	Denied	—	(d) good-faith effort to repay or otherwise resolve debts	Claimed Debt Paid in Full Documented Rehabilitation Evidence
1.c	Between 2018 and 2021, Applicant accumulated delinquent student loans exceeding $93,000. $93,000	For Applicant	Student Loan Debt	Denied	—	(d) good-faith effort to repay or otherwise resolve debts	Claimed Debt Paid in Full Documented Rehabilitation Evidence
1.d	He accrued these student loan deficiencies during recurrent periods of unemployment when he could not work.	For Applicant	Student Loan Debt	Denied	—	(d) good-faith effort to repay or otherwise resolve debts	Claimed Debt Paid in Full Documented Rehabilitation Evidence
1.e	Applicant’s student loan records document that his loans were in forbearance throughout the 2017 calendar year and early 2018.	For Applicant	Student Loan Debt	Denied	—	(d) good-faith effort to repay or otherwise resolve debts	Claimed Debt Paid in Full Documented Rehabilitation Evidence
1.f	Once the forbearance was lifted in 2019, he was not financially able to address them.	For Applicant	Student Loan Debt	Denied	—	(d) good-faith effort to repay or otherwise resolve debts	Claimed Debt Paid in Full Documented Rehabilitation Evidence
1.g	Applicant injured his foot (causing a stress fracture) and could not work for at least six months.	For Applicant	Student Loan Debt	Denied	—	(d) good-faith effort to repay or otherwise resolve debts	Claimed Debt Paid in Full Documented Rehabilitation Evidence
1.h	While unable to address his student loans for lack of monetary resources, Applicant’s student loans were placed in collection status by the DoE.	For Applicant	Student Loan Debt	Denied	—	(d) good-faith effort to repay or otherwise resolve debts	Claimed Debt Paid in Full Documented Rehabilitation Evidence
1.i	Records document that in May 2021, Applicant’s rehabilitated student loans were returned to his servicing agent in December 2020 for administering and collection if necessary.	For Applicant	Student Loan Debt	Denied	—	(d) good-faith effort to repay or otherwise resolve debts	Claimed Debt Paid in Full Documented Rehabilitation Evidence
1.j	By White House Executive Order, Applicant’s still outstanding student loans were placed in deferment status in December 2021, and are tentatively scheduled to be returned to active enforcement status October 2023.	For Applicant	Student Loan Debt	Denied	—	(d) good-faith effort to repay or otherwise resolve debts	Claimed Debt Paid in Full Documented Rehabilitation Evidence
1.k	At this time, all but $38,763 of his accrued delinquent student loans have been forgiven and discharged. $38,763	For Applicant	Student Loan Debt	Denied	—	(d) good-faith effort to repay or otherwise resolve debts	Claimed Debt Paid in Full Documented Rehabilitation Evidence
1.l	In December 2021, Applicant contracted COVID-19 and did not return to work until March 2022.	For Applicant	Student Loan Debt	Denied	—	(d) good-faith effort to repay or otherwise resolve debts	Claimed Debt Paid in Full Documented Rehabilitation Evidence
1.m	For most of his COVID-19 absences, he received short-term disability payments while being treated for his COVID symptoms.	For Applicant	Student Loan Debt	Denied	—	(d) good-faith effort to repay or otherwise resolve debts	Claimed Debt Paid in Full Documented Rehabilitation Evidence
1.n	Records document that Applicant was approved for short-term disability and missed over three months of work.	For Applicant	Student Loan Debt	Denied	—	(d) good-faith effort to repay or otherwise resolve debts	Claimed Debt Paid in Full Documented Rehabilitation Evidence
1.o	With his job promotion and salary increase (from $26 to $33 an hour), Applicant fully expects to be able to meet his student loan demands once the payment pause is expectedly lifted in October 2023.	For Applicant	Student Loan Debt	Denied	—	(d) good-faith effort to repay or otherwise resolve debts	Claimed Debt Paid in Full Documented Rehabilitation Evidence
1.p	His remaining student loans are currently in good standing.	For Applicant	Student Loan Debt	Denied	—	(d) good-faith effort to repay or otherwise resolve debts	Claimed Debt Paid in Full Documented Rehabilitation Evidence
1.q	While he has personal loans to repay (two from financial institutions exceeding $16,000) along with advances from his brother and friends exceeding $1,400. $17,000	For Applicant	Personal Loan Debt	Denied	—	(d) good-faith effort to repay or otherwise resolve debts	Claimed Debt Paid in Full Documented Rehabilitation Evidence

Allegation

Finding

Type

Response

Disqualifying (¶19)

Mitigating applied (¶20)

Mitigation

1.a

Applicant allegedly accumulated nine delinquent Department of Education (DoE) student loans exceeding $40,000 and two other federally guaranteed delinquent student loans exceeding $53,000. Allegedly, Applicant’s student loans remain unresolved and outstanding.

$93,000

For Applicant

Student Loan Debt

Denied

—

(d) good-faith effort to repay or otherwise resolve debts

Claimed

Debt Paid in Full

Documented

Rehabilitation Evidence

1.b

Allegedly, Applicant’s student loans remain unresolved and outstanding.

For Applicant

Student Loan Debt

Denied

—

(d) good-faith effort to repay or otherwise resolve debts

Claimed

Debt Paid in Full

Documented

Rehabilitation Evidence

1.c

Between 2018 and 2021, Applicant accumulated delinquent student loans exceeding $93,000.

$93,000

For Applicant

Student Loan Debt

Denied

—

(d) good-faith effort to repay or otherwise resolve debts

Claimed

Debt Paid in Full

Documented

Rehabilitation Evidence

1.d

He accrued these student loan deficiencies during recurrent periods of unemployment when he could not work.

For Applicant

Student Loan Debt

Denied

—

(d) good-faith effort to repay or otherwise resolve debts

Claimed

Debt Paid in Full

Documented

Rehabilitation Evidence

1.e

Applicant’s student loan records document that his loans were in forbearance throughout the 2017 calendar year and early 2018.

For Applicant

Student Loan Debt

Denied

—

(d) good-faith effort to repay or otherwise resolve debts

Claimed

Debt Paid in Full

Documented

Rehabilitation Evidence

1.f

Once the forbearance was lifted in 2019, he was not financially able to address them.

For Applicant

Student Loan Debt

Denied

—

(d) good-faith effort to repay or otherwise resolve debts

Claimed

Debt Paid in Full

Documented

Rehabilitation Evidence

1.g

Applicant injured his foot (causing a stress fracture) and could not work for at least six months.

For Applicant

Student Loan Debt

Denied

—

(d) good-faith effort to repay or otherwise resolve debts

Claimed

Debt Paid in Full

Documented

Rehabilitation Evidence

1.h

While unable to address his student loans for lack of monetary resources, Applicant’s student loans were placed in collection status by the DoE.

For Applicant

Student Loan Debt

Denied

—

(d) good-faith effort to repay or otherwise resolve debts

Claimed

Debt Paid in Full

Documented

Rehabilitation Evidence

1.i

Records document that in May 2021, Applicant’s rehabilitated student loans were returned to his servicing agent in December 2020 for administering and collection if necessary.

For Applicant

Student Loan Debt

Denied

—

(d) good-faith effort to repay or otherwise resolve debts

Claimed

Debt Paid in Full

Documented

Rehabilitation Evidence

1.j

By White House Executive Order, Applicant’s still outstanding student loans were placed in deferment status in December 2021, and are tentatively scheduled to be returned to active enforcement status October 2023.

For Applicant

Student Loan Debt

Denied

—

(d) good-faith effort to repay or otherwise resolve debts

Claimed

Debt Paid in Full

Documented

Rehabilitation Evidence

1.k

At this time, all but $38,763 of his accrued delinquent student loans have been forgiven and discharged.

$38,763

For Applicant

Student Loan Debt

Denied

—

(d) good-faith effort to repay or otherwise resolve debts

Claimed

Debt Paid in Full

Documented

Rehabilitation Evidence

1.l

In December 2021, Applicant contracted COVID-19 and did not return to work until March 2022.

For Applicant

Student Loan Debt

Denied

—

(d) good-faith effort to repay or otherwise resolve debts

Claimed

Debt Paid in Full

Documented

Rehabilitation Evidence

1.m

For most of his COVID-19 absences, he received short-term disability payments while being treated for his COVID symptoms.

For Applicant

Student Loan Debt

Denied

—

(d) good-faith effort to repay or otherwise resolve debts

Claimed

Debt Paid in Full

Documented

Rehabilitation Evidence

1.n

Records document that Applicant was approved for short-term disability and missed over three months of work.

For Applicant

Student Loan Debt

Denied

—

(d) good-faith effort to repay or otherwise resolve debts

Claimed

Debt Paid in Full

Documented

Rehabilitation Evidence

1.o

With his job promotion and salary increase (from $26 to $33 an hour), Applicant fully expects to be able to meet his student loan demands once the payment pause is expectedly lifted in October 2023.

For Applicant

Student Loan Debt

Denied

—

(d) good-faith effort to repay or otherwise resolve debts

Claimed

Debt Paid in Full

Documented

Rehabilitation Evidence

1.p

His remaining student loans are currently in good standing.

For Applicant

Student Loan Debt

Denied

—

(d) good-faith effort to repay or otherwise resolve debts

Claimed

Debt Paid in Full

Documented

Rehabilitation Evidence

1.q

While he has personal loans to repay (two from financial institutions exceeding $16,000) along with advances from his brother and friends exceeding $1,400.

$17,000

For Applicant

Personal Loan Debt

Denied

—

(d) good-faith effort to repay or otherwise resolve debts

Claimed

Debt Paid in Full

Documented

Rehabilitation Evidence

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Case Profile

Summary

Why the Applicant Prevailed

Conditions Referenced

Key Rule Quoted

Procedural Posture

Cite For

Full decision

DEFENSE OFFICE OF HEARINGS AND APPEALS

HEARING

APPEARANCES

STATEMENT OF CASE

FINDINGS OF FACT

POLICIES

ANALYSIS

FORMAL FINDINGS

CONCLUSION