ISCR Case No. 26-00716

______________ ______________ DEFENSE LEGAL SERVICES AGENCY DEFENSE OFFICE OF HEARINGS AND APPEALS In the matter of: Applicant for Security Clearance ) ) ) ) ) ) ISCR Case No. 26-00716 Appearances For Government: Karen Moreno Sayles, Esq., Department Counsel For Applicant: Pro se 09/29/2026 Decision LOKEY ANDERSON, Darlene D., Administrative Judge: Statement of Case On December 19, 2025, Applicant submitted a security clearance application (e- QIP). On May 15, 2026, the Defense Counterintelligence and Security Agency Consolidated Adjudication Services (DCSA CAS) issued Applicant a Statement of Reasons (SOR), detailing security concerns under Guideline F, Financial Considerations. The action was taken under Executive Order 10865, Safeguarding Classified Information within Industry (February 20, 1960), as amended; DoD Directive 5220.6, Defense Industrial Personnel Security Clearance Review Program (January 2, 1992), as amended (Directive); and the National Security Adjudicative Guidelines for Determining Eligibility for Access to Classified Information or Eligibility to Hold a Sensitive Position (AG), effective within the DoD after June 8, 2017. Applicant answered the SOR on June 16, 2026, and requested a hearing before an administrative judge. The case was assigned to me on August 25, 2026. The Defense Office of Hearings and Appeals issued a notice of hearing on August 27, 2026, and the hearing was convened as scheduled on September 10, 2026. The Government offered five exhibits, referred to as Government Exhibits 1 through 5, which were admitted without objection. Applicant offered no exhibits, however he testified on his own behalf. DOHA received the transcript of the hearing (Tr.) on September 21, 2026.

Findings of Fact Applicant is 32 years old. He is married with no children. He has a Bachelor’s degree and is close to finishing a Master’s degree in Engineering. He is employed as an Systems Engineer for a defense contractor. He is seeking to obtain a security clearance in connection with his employment. Guideline F - Financial Considerations The Government alleged that Applicant is ineligible for a clearance because he made financial decisions that indicate poor self-control, lack of judgment, or unwillingness to abide by rules and regulations, all of which raise questions about his reliability, trustworthiness, and ability to protect classified information. The SOR identified four delinquent student loan debts, three owed to Sallie Mae (the Department of Education), and one owed to a University he attended; taken together they total approximately $110,000. Credit reports of the Applicant dated September 17, 2025; February 12, 2026; and July 28, 2026, confirm the indebtedness listed in the SOR. (Government Exhibits 3, 4 and 5.) Applicant admits each of the allegations set forth in the SOR. Applicant has held a security clearance since 2021. Applicant stated that he was the first in his family to go to college, and was able to finance his education through a number of grants and student loans. He started receiving student loans in 2012, when he started college, which continued throughout his undergraduate education, until 2018. In total he borrowed approximately $110,000 in student loans. Applicant explained that his mother passed away during his first year of college. Her death, without him knowing it, had an effect on his ability to get his work done. Looking back, he realizes that he dragged out his school year more than he should have, and tacked on more student loans than were necessary. (Tr. p. 19.) In September 2018, after Applicant graduated with his Bachelor’s degree, he received an offer to continue his education in a related Master’s program at another University. This offer was a full-tuition-paid scholarship with a paid research assistant position. Applicant accepted the offer and worked the program, but procrastinated and never finished it. He stated that he did everything required, except he did not complete the thesis component of the Master’s Program. (Tr. pp. 19 and 25.) From May 2019 to November 2021, Applicant worked as a research assistant at the University he was attending for the Master’s Program. From May 2020 to September 2023, Applicant worked for a defense contractor as a Systems Engineer, and was paid between $85,000 and $90,000 annually. (Tr. p. 20.) In about 2022, Applicant learned that his student loans were coming due. The required monthly payments were between $1,100 and $1,200 monthly. Applicant stated that he made a few payments here and there of $25, $50, and $75 to show good faith, 2

but was not able to pay the amount required to service his loans. (Tr. pp. 27-28, and Government Exhibit 2, pp. 12-13.) Applicant explained that around this time he was in transition, and moving to California. The expense of the move depleted his savings. His priorities at that time were to find a safe and affordable apartment, make his car payments, and related expenses, pay for utilities, phone, food, and any other general living expenses. (Tr. p. 29.) He stated that he did not take his financial situation seriously until he moved to California. (Tr. p. 32.) In September 2023, Applicant was hired by another defense contractor with whom he is currently employed. He now earns approximately $130,000 annually, but continued to ignore his student loan debts and has not done anything to service them. (Tr. p. 22.) In 2024, Applicant got married, and paying his student loans were not a priority. In fact, Applicant avoided the student loan debt. Initially after the move, he started falling behind on his bills, and had to lean on credit cards to pay many of his bills. He stated that for the past couple of years, he and his wife have been trying to pay their bills, mainly their consumer debt, including credit card debt, a car repossession, and other loans that Applicant obtained. Applicant stated that he believes he paid off about $26,000 in delinquent debt over the past few years. (Tr. p. 49.) Applicant also explained that he moved his sister from one state to another to live with him and his wife. His sister, who struggles with alcoholism, was in a bad relationship and she needed to be forced to get out of it. Her partner was abusing her physically, mentally, and sexually. To get her out of the situation, Applicant took on the responsibility of taking care of her and providing all of her financial support for about a year and a half. Ironically, the day Applicant moved his sister, the partner died. During the period his sister lived with him, his household expenses increased by 50 percent, and the cost of food doubled. His sister has now moved out, and his expenses have dropped. (Tr. pp. 29, 38-40.) It appears that between 2017 and 2022, Applicant paid about $2,200 towards his student loans totaling approximately $110,000. (Government Exhibit 2, pp. 12-13.) He has made no student loan payments since November 2022. Each of his student loan debts are currently in default. To get out of default, he must make the required lump sum payment to each of the creditors. One of his creditors is requiring a lump sum payment of $12,000 to get out of default. The other creditor is requiring a lump sum payment of $6,000 to get out of default. Once this lump sum payment is made, the debt will then be removed from default status and placed into rehabilitation, which means that a payment plan will be established that Applicant will be allowed to follow. Until then, Applicant’s student loans will remain in default. (Tr. pp. 35-37.) The following delinquent debts are of security concern: 1.a. Applicant is indebted to Sallie Mae (Department of Education) for a student loan, account #5852500030162108, that was charged off in the approximate amount of 3

$40,072. The student loan was opened during Applicant’s undergraduate education and was used for that purpose. Applicant has not made a payment since November 2022. The student loan is currently in default. 1.b. Applicant is indebted to Sallie Mae (Department of Education) for a student loan account #5852500035613873 that was charged off in the approximate amount of $30,377. The student loan was opened during Applicant’s undergraduate education and was used for that purpose. Applicant has not made a payment since November 2022. The student loan is currently in default. 1.c. Applicant is indebted to Sallie Mae (Department of Education) for a student loan account #5852500036802012 that was charged off in the approximate amount of $27,176. The student loan was opened during Applicant’s undergraduate education and was used for that purpose. Applicant has not made a payment since November 2022. The student loan is currently in default. 1.d. Applicant is indebted to a University for a student loan account that was placed for collection in the approximate amount of $13,124. The student loan was opened during Applicant’s undergraduate education and was used for that purpose. Applicant has not made a payment since November 2022. The student loan is currently in default. Applicant stated that he and his wife’s current combined monthly salary take home is $9,200. They use this to pay their rent, car payments, utilities, food and household expenses. Their net remainder is about $3,452, which they use to pay other outstanding debts and loans. He stated that he is now in good standing with these other creditors. Applicant stated that he has no savings account. He does have a 401k with about $40,000 in it. (Tr. p. 44.) Applicant stated that he plans to address his student loans soon. On September 1, 2026, just a week before the hearing, he contacted the Department of Education to find out if he could make payments to them until he reaches the lump sum amount required to have his accounts removed from default status. He was told by a gentleman on the phone that he could not. Applicant is still hoping to get a different answer. He stated that if that solution is not available, he will be forced to take the money out of his 401K, but he has kept that as a last resort. (Tr. pp. 53-59.) Policies When evaluating an applicant’s suitability for a security clearance, the administrative judge must consider the adjudicative guidelines (AG). In addition to brief introductory explanations for each guideline, the adjudicative guidelines list potentially disqualifying conditions and mitigating conditions, which are to be used in evaluating an applicant’s eligibility for access to classified information. 4

These guidelines are not inflexible rules of law. Instead, recognizing the complexities of human behavior, administrative judges apply the guidelines in conjunction with the factors listed in AG ¶ 2 describing the adjudicative process. The administrative judge’s overarching adjudicative goal is a fair, impartial, and commonsense decision. The entire process is a conscientious scrutiny of a number of variables known as the whole- person concept. The administrative judge must consider all available, reliable information about the person, past and present, favorable and unfavorable, in making a decision. The protection of the national security is the paramount consideration. AG ¶ 2(b) requires that “[a]ny doubt concerning personnel being considered for national security eligibility will be resolved in favor of the national security.” In reaching this decision, I have drawn only those conclusions that are reasonable, logical and based on the evidence contained in the record. Likewise, I have avoided drawing inferences grounded on mere speculation or conjecture. Under Directive ¶ E3.1.14, the government must present evidence to establish controverted facts alleged in the SOR. Under Directive ¶ E3.1.15, the applicant is responsible for presenting “witnesses and other evidence to rebut, explain, extenuate, or mitigate facts admitted by the applicant or proven by Department Counsel.” The applicant has the ultimate burden of persuasion to obtain a favorable clearance decision. A person who seeks access to classified information enters into a fiduciary relationship with the government predicated upon trust and confidence. This relationship transcends normal duty hours and endures throughout off-duty hours. The government reposes a high degree of trust and confidence in individuals to whom it grants access to classified information. Decisions include, by necessity, consideration of the possible risk the applicant may deliberately or inadvertently fail to safeguard classified information. Such decisions entail a certain degree of legally permissible extrapolation as to potential, rather than actual, risk of compromise of classified information. Section 7 of EO 10865 provides that adverse decisions shall be “in terms of the national interest and shall in no sense be a determination as to the loyalty of the applicant concerned.” See also EO 12968, Section 3.1(b) (listing multiple prerequisites for access to classified or sensitive information). Analysis Guideline F - Financial Considerations The security concern for Financial Considerations is set out in AG ¶ 18: Failure to live within one's means, satisfy debts, and meet financial obligations may indicate poor self-control, lack of judgment, or unwillingness to abide by rules and regulations, all of which can raise questions about an individual's reliability, trustworthiness, and ability to 5

protect classified or sensitive information. Financial distress can also be caused or exacerbated by, and thus can be a possible indicator of, other issues of personnel security concern such as excessive gambling, mental health conditions, substance misuse, or alcohol abuse or dependence. An individual who is financially overextended is at greater risk of having to engage in illegal or otherwise questionable acts to generate funds. Affluence that cannot be explained by known sources of income is also a security concern insofar as it may result from criminal activity, including espionage. The guideline notes several conditions that could raise security concerns under AG ¶ 19. Three are potentially applicable in this case: (a) inability to satisfy debts; (b) unwillingness to satisfy debts; and (c) a history of not meeting financial obligations. Applicant took out student loans totaling approximately $110,000 to pay for his undergraduate education. These student loans became due sometime in 2022. He made a few nominal payments between 2017-2022, but he has not made any payments since November 2022. Each of the four student loans set forth in the SOR are currently in default. Applicant’s actions or inactions demonstrate poor judgment and unreliability. The evidence is sufficient to raise the above disqualifying conditions. The following mitigating conditions under the Financial Considerations guideline are potentially applicable under AG ¶ 20. (a) the behavior happened so long ago, was so infrequent, or occurred under such circumstances that it is unlikely to recur and does not cast doubt on the individual’s current reliability, trustworthiness, or good judgment; (b) the conditions that resulted in the financial problem were largely beyond the person’s control (e.g. loss of employment, a business downturn, unexpected medical emergency, or a death, divorce, or separation), and the individual acted responsibly under the circumstances; (c) the individual has received or is receiving financial counseling for the problem from a legitimate and credible source, such as a non-profit credit counseling service, and there are clear indications that the problem is being resolved or is under control; (d) the individual initiated and is adhering to a good faith effort to repay overdue creditors or otherwise resolve debts; and 6

(e) the individual has a reasonable basis to dispute the legitimacy of the past-due debt which is the cause of the problem and provides documented proof to substantiate the basis of the dispute or provides evidence of actions to resolve the issue. In 2024, Applicant took care of his sister for a year and a half which obviously contributed to his financial problems. However, the real problem here is not his sister’s expenses, it is the fact that the Applicant has ignored his student loan debt since November 2022. Applicant began working for his current employer in 2023, and earns $130,000 annually. He has addressed other credit card debt and other loans, representing that he has paid a about $26,000 in debt, but he has not made any payments toward resolving his student loans. Applicant’s student loans are now all in default status, and he claims that he does not have the money to make the required lump sum payments to get them out of default. Even after receiving the SOR, Applicant has done little to nothing to show that he is addressing his student loans. He has not made a good faith effort to resolve these loans, nor has he taken any reasonable steps to address them in any significant manner, and there is no evidence that he will. His student loan debt is clearly not under control. Applicant has a lot of work to do in order to show the Government that he can be financially responsible. None of the mitigating conditions are applicable. There is insufficient evidence in the record to show that the Applicant has carried his burden of proof to establish mitigation of the government security concerns under Guideline F. Whole-Person Concept Under the whole-person concept, the administrative judge must evaluate an applicant’s eligibility for a security clearance by considering the totality of the applicant’s conduct and all relevant circumstances. The administrative judge should consider the nine adjudicative process factors listed at AG ¶ 2(d): (1) the nature, extent, and seriousness of the conduct; (2) the circumstances surrounding the conduct, to include knowledgeable participation; (3) the frequency and recency of the conduct; (4) the individual’s age and maturity at the time of the conduct; (5) the extent to which participation is voluntary; (6) the presence or absence of rehabilitation and other permanent behavioral changes; (7) the motivation for the conduct; (8) the potential for pressure, coercion, exploitation, or duress; and (9) the likelihood of continuation or recurrence. Under AG ¶ 2(c), the ultimate determination of whether to grant eligibility for a security clearance must be an overall commonsense judgment based upon careful consideration of the guidelines and the whole-person concept. Applicant has failed to show financial responsibility and is not found to be sufficiently reliable or trustworthy to properly protect and access classified information. 7

I considered the potentially disqualifying and mitigating conditions in light of all relevant facts and circumstances surrounding this case. I conclude Applicant has not mitigated the Financial Considerations security concern. Formal Findings Formal findings for or against Applicant on the allegations set forth in the SOR, as required by ¶ E3.1.25 of Enclosure 3 of the Directive, are: Paragraph 1, Guideline F: AGAINST APPLICANT Subparagraphs 1.a. through 1.d. Against Applicant Conclusion In light of all of the circumstances presented by the record in this case, it is not clearly consistent with the national interest to grant or continue Applicant’s eligibility for a security clearance. Eligibility for access to classified information is denied. Darlene Lokey Anderson Administrative Judge 8