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                           DEPARTMENT OF DEFENSE
         DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
)
----------------------------------- ) ADP Case No. 14-00395
)
Applicant for Public Trust Position )
Appearances
For Government: Jeff A. Nagel, Esq., Department Counsel
For Applicant: Pro se  
                     
           
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Decision
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LEONARD, Michael H., Administrative Judge:
Applicant contests the Defense Department’s intent to deny her eligibility for a
public trust position. The evidence shows Applicant has a history of financial problems
or difficulties consisting of delinquent student loans and delinquent consumer debts, all
of which are unresolved. Applicant did not present sufficient evidence to explain and
mitigate the concern stemming from her unfavorable financial history. Accordingly, this
case is decided against Applicant.
Statement of the Case
On March 26, 2014, the Department of Defense (DOD) sent Applicant a
statement of reasons (SOR) detailing a trustworthiness concern under Guideline F for
financial considerations. The action was taken under Executive Order 10865,
Safeguarding Classified Information with Industry (Feb. 20, 1960), as amended;
 The AG  were published in the Federal Register and codified in 32 C.F.R. § 154, Appendix H (2006). The1
AG replace the guidelines in Enclosure 2 to the Directive.    
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Department of Defense Directive 5220.6, Defense Industrial Personnel Security Review
Program (Jan. 2, 1992), as amended (Directive); Department of Defense Regulation
5200.2-R, Personnel Security Program (Jan. 1987), as amended (Regulation); and the
adjudicative guidelines (AG)  implemented by the DOD on September 1, 2006. The1
SOR recommended submission of Applicant’s case to an administrative judge to
determine her eligibility to occupy an automated data processing (ADP) position to
support a DOD contract. Applicant answered the SOR on April 7, 2014, and then she
requested a hearing on April 24, 2014. 
The case was assigned to me May 8, 2014. The hearing was held May 29, 2014.
At the hearing, Department Counsel presented Exhibits 1–3, which were admitted.
Likewise, Applicant presented Exhibits A–C, which were admitted, and she testified on
her own behalf. The transcript (Tr.) was received June 9, 2014.
The record was kept open until June 13, 2014, to allow Applicant to submit
additional documentary evidence. Those matters were timely received, and they are
marked and admitted without objections as Exhibit D–letter of recommendation, dated
June 4, 2014, and Exhibit E–letter from federal student loan guarantor, dated May 29,
2014.   
Findings of Fact
The SOR alleged a history of financial problems or difficulties consisting of: (1)
eight federal student loans that were past due or in collection for a total of about
$16,459; (2) two medical collection accounts for a total of about $5,700; and (3) seven
consumer accounts in collection for a total of about $3,384. In her answer to the SOR,
Applicant denied responsibility or ownership of three consumer accounts, but otherwise
admitted the SOR allegations. Her admissions are accepted and adopted and
incorporated herein as findings of fact. In addition, the following findings of fact are
supported by substantial evidence.
Applicant is a 34-year-old employee who is seeking to obtain eligibility to occupy
a position of public trust for her job as an intake representative doing data processing
for a managed-care support contractor for the Defense Department. She is a temporary
employee assigned to work for the contractor by a staffing/employment agency. She
earns $15.50 per hour; she has no other sources of income; and, aside from $200 in
cash savings, she has no financial assets. 
Applicant has had this job since October 2013. Before that, she was unemployed
(but received unemployment compensation) from August 2012 to September 2013.
Before that, she worked as a medical assistant for a doctor’s office from May 2010 to
July 2012, when she was terminated.  
 AG ¶¶ 18, 19, and 20 (setting forth the concern and the disqualifying and mitigating conditions). 2
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Applicant is about eight-months pregnant with her first child, and she planned to
be on disability from June 18, 2014, to approximately August 27, 2014, due to
pregnancy. (Exhibit C) Her boyfriend, and father of the child, attended the hearing but
did not otherwise participate. He is suffering from a back injury and is unable to work.  
The available documentary evidence shows that Applicant has eight federal
student loans in the amounts of $154, $5,384, $5,355, $120, $1,764, $1,505, $1,162,
and $1,015, all of which are in collection or past due. (Exhibits B and C) Applicant
obtained the student loans during 2008–2010 when she was earning an associate’s
degree in medical assisting. Other than a recent intercept of her 2013 federal income
tax refund, Applicant has made no payments on the student loans. At the hearing, she
estimated the balance due on the student loans was about $28,000. (Tr. 38) After the
hearing, she presented a May 29, 2014 letter from the guarantor of the student loans
stating that her loans are about to default. (Exhibit E) There are handwritten notations
on the letter suggesting that the default will occur on July 24, 2014, and that Applicant
was making arrangements to establish a repayment plan before that date. 
The available documentary evidence shows that Applicant has two medical
collection accounts for a total of about $5,700. (Exhibits B and C) Those debts are the
direct result of uninsured medical expenses that Applicant incurred for necessary
medical care due to an episode of diverticulitis. (Tr. 40–42) Applicant has been unable
to make any payments on those debts.
 
The available documentary evidence also shows that Applicant has seven
consumer accounts in collection for a total of about $3,384. (Exhibits B and C) Applicant
has not paid, settled, entered into repayment agreements, disputed, or otherwise
resolved the consumer accounts, which were addressed individually during the hearing.
(Tr. 42–49) Likewise, she did not present any documentation to support her denial of
the collection accounts in SOR ¶¶ 1.m, 1.n, and 1.p. 
Applicant presented a simplified monthly budget. (Exhibit A) It shows a positive
net remainder of about $200, but the budget does not account for all living expenses
(e.g., groceries). She explained that she is currently living with her parents and they
make up for any shortfall. Her parents also submitted a letter of recommendation on
their daughter’s behalf. (Exhibit D) I found the letter to be both thoughtful and
informative. Her parents observed that Applicant’s biggest flaw is her big heart, which
has resulted in her being taken advantage of without understanding the consequences
of her actions. Their observation is consistent with Applicant’s explanations for some of
the consumer accounts.   
Discussion
Under Guideline F for financial considerations,  the suitability of an applicant may2
be questioned or put into doubt when that applicant has a history of excessive
 ISCR Case No. 95-0611 (App. Bd. May 2, 1996) (It is well settled that “the security suitability of an applicant3
is placed into question when that applicant is shown to have a history of excessive indebtedness or recurring
financial difficulties.”) (citation omitted); and see ISCR Case No. 07-09966 (App. Bd. Jun. 25, 2008) (In
security clearance cases, “the federal government is entitled to consider the facts and circumstances
surrounding an applicant’s conduct in incurring and failing to satisfy the debt in a timely manner.”) (citation
omitted). 
 AG ¶ 18.  4
 AG ¶ 19(a).  5
 AG ¶ 19(c). 6
 AG ¶¶ 20(a)–(f). 7
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indebtedness or financial problems or difficulties.  The overall concern under Guideline3
F is: 
Failure or inability 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
protect [sensitive] information.  4
Similarly, an individual who is financially irresponsible may also be irresponsible,
unconcerned, or negligent in handling and safeguarding sensitive information within the
defense industry.   
The evidence supports a conclusion that Applicant has a history of financial
problems or difficulties. The delinquent student loans and the delinquent consumer
debts indicate inability or unwillingness to satisfy debts  and a history of not meeting5
financial obligations  within the meaning of Guideline F. The facts are sufficient to6
establish these two disqualifying conditions, and the facts also suggest a degree of
financial irresponsibility.
With that said, I attach little security significance to the medical collection
accounts. Applicant incurred those debts for necessary medical care without the luxury
of health insurance as opposed to high-living or frivolous expenditures, and they do not
indicate poor self-control, questionable judgment, unreliability, or untrustworthiness. On
that basis, the debts in SOR ¶¶ 1.j and 1.k are decided for Applicant.   
 
Based on the available evidence, none of the six mitigating conditions under
Guideline F are sufficient to fully mitigate the concern stemming from the delinquent
student loans and the delinquent consumer debts.  In reaching this conclusion, my7
primary concern is the student loans, which are delinquent and near default. I consider
a student loan to be a high-priority debt, paying it back is not optional (e.g., the general
rule is that a student loan cannot be discharged in bankruptcy), and failure to repay a
student loan comes with serious consequences. And I am afraid that the decision here
 ISCR Case No. 09-02160 (App. Bd. Jun. 21, 2010). 8
 ISCR Case No. 07-06482 at 3 (App. Bd. May 21, 2008) (citations and quotations omitted). 9
 AG ¶ 2(a)(1)–(9).10
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is one of those consequences, because Applicant has done very little to resolve her
delinquent student loans. Her last-minute effort to contact the guarantor of the loans and
make payment arrangements are, at this point, simply a promise to take action in the
future, a circumstance that is not entitled to much weight. She has not acted with
reasonable diligence expected from someone under similar circumstances. It is too
soon to tell if Applicant will follow through on the payment arrangements for her
delinquent student loans as well as make a good-faith effort to resolve the delinquent
consumer debts.  
Of course, the purpose of this case is not aimed at collecting debts.  Rather, the8
purpose is to evaluate an applicant’s judgment, reliability, and trustworthiness
consistent with the guidelines in the Directive. In evaluating Guideline F cases, the
Appeal Board has established the following standard:
The Board has previously noted that the concept of meaningful track
record necessarily includes evidence of actual debt reduction through
payment of debts. However, an applicant is not required, as a matter of
law, to establish that he has paid off each and every debt listed in the
SOR. All that is required is that an applicant demonstrate that he has
established a plan to resolve his financial problems and taken significant
actions to implement that plan. The Judge can reasonably consider the
entirety of an applicant’s financial situation and his actions in evaluating
the extent to which that applicant’s plan for the reduction of his
outstanding indebtedness is credible and realistic. There is no requirement
that a plan provide for payments on all outstanding debts simultaneously.
Rather, a reasonable plan (and concomitant conduct) may provide for the
payments of such debts one at a time. Likewise, there is no requirement
that the first debts actually paid in furtherance of a reasonable debt plan
be the ones listed in the SOR.9
Here, the evidence does not support a conclusion that Applicant has established a plan
and taken steps to implement that plan sufficient to mitigate the concern. 
To conclude, the evidence leaves me with doubt about Applicant’s eligibility and
suitability for a public trust position. In reaching this conclusion, I weighed the evidence
as a whole and considered if the favorable evidence outweighed the unfavorable
evidence or vice versa. I gave due consideration to the whole-person concept.  For all10
these reasons, I conclude Applicant did not mitigate the financial considerations
concern.
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Formal Findings
The formal findings on the SOR allegations are as follows:
Paragraph 1, Guideline F: Against Applicant 
Subparagraphs 1.a–1.i: Against Applicant
Subparagraphs 1.j and 1.k: For Applicant
Subparagraphs 1.l–1.q: Against Applicant
Conclusion
In light of the record as a whole, it is not clearly consistent with the interests of
national security to grant Applicant eligibility for an ADP position. Eligibility for access to
sensitive information is denied.
        
Michael H. Leonard
Administrative Judge