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              DEPARTMENT OF DEFENSE 
 DEFENSE OFFICE OF HEARINGS AND APPEALS 
 
 
 
 
In the matter of: ) 
) 
  )   ISCR Case No. 15-01694 
 ) 
Applicant for Security Clearance ) 
 
 
Appearances 
 
For Government: Robert J. Kilmartin, Esq., Department Counsel 
For Applicant: Pro se 
 
 
______________ 
 
Decision 
______________ 
 
 
MATCHINSKI, Elizabeth M., Administrative Judge: 
 
Applicant owes approximately $132,000 in defaulted private student loan debt. He 
has been making timely payments on his federal student loans obtained for $32,500, and 
he has made some payments toward one of his private student loans in response to court 
action. The financial considerations concerns are not adequately mitigated. Clearance is 
denied. 
 
Statement of the Case 
 
 On September 1, 2015, the Department of Defense Consolidated Adjudications 
Facility (DOD CAF) issued a Statement of Reasons (SOR) to Applicant, detailing the 
security concerns under Guideline F, Financial Considerations, and explaining why it was 
unable to find it clearly consistent with the national interest to grant or continue security 
clearance eligibility for him. The DOD CAF took the action 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 adjudicative guidelines (AG) effective 
within the DOD on September 1, 2006. 
 
 
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On September 18, 2015, Applicant answered the SOR allegations and requested a 
hearing before an administrative judge from the Defense Office of Hearings and Appeals 
(DOHA). On February 23, 2016, the case was assigned to me to conduct a hearing to 
determine whether it is clearly consistent with the national interest to grant or continue a 
security clearance for him. On February 25, 2016, I scheduled a hearing for March 23, 
2016. 
 
I convened the hearing as scheduled. Five Government exhibits (GEs 1-5) and two 
Applicant exhibits (AEs A-B) were admitted into evidence without objection. Applicant and 
a witness testified, as reflected in a transcript (Tr.) received on April 1, 2016. 
 
I held the record open until April 14, 2016, for post-hearing submissions from 
Applicant. On April 5, 2016, Applicant submitted a statement by email, which he later 
clarified on April 12, 2016. The emails were collectively marked and admitted without 
objection as AE C. The record closed on April 14, 2016, without any further submissions 
from Applicant. 
 
Findings of Fact 
 
 The SOR alleges under Guideline F that Applicant owes collection debts of $40,523 
(SOR ¶ 1.a), $19,585 (SOR ¶ 1.c), $242 (SOR ¶ 1.f), and $26,971 (SOR ¶ 1.g) and 
charged-off debts of $28,100 (SOR ¶ 1.b) and $18,675 (SOR ¶ 1.d). When he answered 
the SOR, Applicant denied the alleged $242 medical debt in SOR ¶ 1.f. He admitted the 
remaining debts without explanation. 
 
 After considering the pleadings, exhibits, and transcript, I find that SOR ¶¶ 1.b and 
1.g are the same debt. The account numbers are the same. Additional findings of fact 
follow. 
 
Applicant is a 29-year-old college graduate, who has been working for a defense 
contractor since late March 2014. He seeks his first DOD security clearance. (GE 1; AE B.) 
 
Financial 
 
Applicant attended college from August 2006 to May 2010. (GE 1.) He earned his 
bachelor’s degree in information technology. (Tr. 26.) He paid for his studies in part with 
student loans. Between August 2006 and August 2009, he obtained federal student loans 
of $34,125. He also took on private student loans of $21,300 (SOR ¶ 1.a), $24,671 (SOR ¶ 
1.b and ¶ 1.g), $19,585 (SOR ¶ 1.c), $14,915 (SOR ¶ 1.d), and $14,865 (SOR ¶ 1.e). (GEs 
3-4.) His mother completed and filed his loan applications for him electronically, and he 
was unaware of his total student loan debt. (Tr. 22-23.)  
 
 Applicant worked as a part-time security guard the summer after he graduated from 
college. From October 2010 to March 2012, he was employed as a customer service 
representative for a company. (GE 1; Tr. 28.) Applicant’s federal student loans were 
income based, so he was able to consolidate them for $37,415 in January 2011 and make 
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timely payments. His income was insufficient to make payments on his private student 
loans when they came due out of deferment in late 2010, and he defaulted on those loans. 
(Tr. 19-20.) 
 
Applicant was working 40-50 hours a week earning $11.50-$11.90 an hour and 
living with his parents. When his parents moved in April 2011, Applicant had to rent an 
apartment. He cohabited with his then girlfriend to reduce expenses, but their relationship 
ended after eight or nine months. (GE 1; Tr. 19.) He moved in with his brother, who was 
living in their parents’ home. Applicant and his brother split the $1,200 monthly mortgage 
payment. (Tr. 19-20, 28.) 
 
Applicant was employed full time as a customer account representative for about a 
year when he resigned in May 2013 following notice of unsatisfactory performance. His 
compensation was based on commission, and he was not meeting monthly sales quotas. 
(GEs 1, 5.) 
 
Applicant then worked as a mail handler from May 2013 to November 2013. In 
October 2013, he began a cohabitant relationship, and he and his girlfriend moved to a 
new locale where they shared an apartment, splitting their monthly rent of $1,075.
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 (GE 1; 
Tr. 29.) He was placed by a staffing agency in a contract position for his employer earning 
$13 an hour. In March 2014, he became a direct hire at an hourly wage of $16.30. (Tr. 20.) 
Needing a security clearance for his duties, he completed and certified to the accuracy of a 
Questionnaire for National Security Positions. In response to a financial record inquiry 
concerning any delinquency involving enforcement in the last seven years, Applicant 
indicated that court action had been taken against him by the creditor in SOR ¶ 1.e for 
about $23,000 in student loan debt, but that the matter had been resolved and that he was 
making monthly payments. He disclosed no other financial issues. (GE 1.) 
 
 As of May 15, 2014, Applicant’s federal student loans were rated as current with a 
balance of $37,775. The private student loan in SOR ¶ 1.g had been placed in collection 
because of nonpayment since February 2011. A second loan with the lender of $21,300 
had been charged off and placed in collection, possibly with the lender in SOR ¶ 1.a. The 
credit bureaus reported that his student loan in SOR ¶ 1.c was in collection for $19,585. 
His student loan in SOR ¶ 1.d was in collection with a past-due balance of $18,675. His 
loan in SOR ¶ 1.e had a collection balance of $22,851. A medical debt of $242 from May 
2011 was also in collection (SOR ¶ 1.f). Applicant testified that he now believes that it 
might be a hospital bill, but he is not certain. (Tr. 31-32.) (GE 4.) 
 
 On May 28, 2014, Applicant was interviewed by an authorized investigator for the 
Office of Personnel Management (OPM) about his previously disclosed student loan (SOR 
¶ 1.e). Applicant indicated that he started repaying the debt in April 2014 in no set amount. 
He pays what he can afford. He explained that he fell behind on payments originally 
because of insufficient income. When confronted, Applicant did not dispute that he also 
                                                 
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Applicant testified that he and his girlfriend began living together in their current apartment in October 2014 
[sic]. (Tr. 29.) He reported on his e-QIP in April 2014 that they began cohabiting in their current apartment in 
October 2013. (GE 1.) 
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owed the student loan debt in SOR ¶ 1.g (same debt in SOR ¶ 1.b). He admitted taking on 
the debt around 2007 or 2008, but he was not certain about the current balance or past 
due amount. He indicated that he would satisfy all current and future debts. (GE 5.) 
 
 As of November 2014, Applicant had delinquent student loan accounts on his credit 
report with outstanding balances of $40,523 (SOR ¶ 1.a), $28,100 (SOR ¶¶ 1.b and 1.g), 
$19,585 (SOR ¶ 1.c), and $18,675 (SOR ¶ 1.d). His student loan account in SOR ¶ 1.e 
showed a zero balance after it had been sold. Applicant’s cousin was making timely 
payments of $309 per month on a car loan Applicant obtained in June 2011 for $13,686 
(balance $7,743). Applicant’s cousin took the car and assumed responsibility for the 
payments around the fall of 2012 when Applicant could no longer afford the car. (Tr. 29-30, 
44.) Applicant was making the monthly minimum payments on five credit cards with 
balances totaling $3,865. (GE 3.) 
 
 As of December 2015, Equifax was reporting three delinquent student loans. 
Applicant was past due $8,589 on his student loan in SOR ¶ 1.b (same debt in SOR ¶ 1.g) 
on an outstanding balance of $30,523. The $19,585 balance of SOR ¶ 1.c was reported to 
have been in collection since December 2013. The $18,675 student loan in SOR ¶ 1.d had 
a last payment of April 2011. Applicant’s consolidated federal student loan with a balance 
of $37,775 was rated as current with a monthly scheduled payment of $188. (GE 2.)  
Applicant pays $59 toward his federal student loans every two weeks. (Tr. 43.) His credit 
card accounts were rated as current with an aggregate balance of $5,269. His cousin had 
paid down Applicant’s car loan to $4,961. (GE 2.) 
 
Applicant testified that he has been making payments of $107 a month toward one 
of the two student loans held by the creditor identified in SOR ¶ 1.c and ¶ 1.e.
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 (Tr. 21, 33, 
37.) Applicant presented no documentation showing his payments, although evidence 
suggests that he began repaying the loan in SOR ¶ 1.e in April 2014. (GE 1.) In addition to 
his $118 monthly federal student loan payment, Applicant pays almost $540 in rent, $150 
for cable services, and $150 for his cell phone each month. (Tr. 35.) As of March 2016, 
Applicant was driving an older model vehicle. He sold another car for $1,800, which 
covered the cost of the vehicle he acquired at an auction. (Tr. 44.) Applicant indicated in 
April 2016 that he hopes to continue to chip away at his student loan debt. A security 
clearance is very important to him and his future with his employer. (AE C.)  
                                                 
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Neither the student loan in SOR ¶ 1.e nor the collection agency identified by Applicant appears on Applicant’s 
credit record as of December 2015. His credit report shows the student loan in SOR ¶ 1.c with a collection 
balance of $19,585. (GE 2.) 
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Work and Character References 
 
A longtime friend of Applicant’s parents testified to his belief that Applicant would not 
have been able to afford college without student loans. Applicant’s father was a chef and 
his mother worked in human services. (Tr. 59-60.) Applicant’s witness, who previously 
worked in city government, believes that given the opportunity, Applicant will address his 
student loans. Applicant has a record of civic engagement since he was a junior in college. 
Applicant has aided charitable activities for low-income residents and advised at-risk youth 
against gang involvement. He found Applicant to be honest, trustworthy, and focused. (Tr. 
51-60.) 
 
Applicant proved to be a quick learner and valuable contributor to his defense 
contractor employer. He has received at least five impact awards from his employer. He 
was recognized in April 2014 for professional and persistent support to security personnel; 
in April 2015 for being part of a total team effort to insure customer deliveries; in June 2015 
for outstanding performance, teamwork, and dedication to the logistics department; in 
August 2015 for going “above and beyond” to ensure that a program met its monthly 
customer commitments; and in September 2015 for outstanding performance and 
dedication in several aspects with professionalism, patience, and initiative. (AE A.) 
 
Applicant’s manager gave him a rating of “high performance” for his hard work and 
dedication in 2015. Citing Applicant’s receipt of several impact awards, the manager 
commented in Applicant’s annual review that he had nothing but good reviews and praise 
for Applicant’s work ethic and ability to perform his job. The need for Applicant to pursue a 
security clearance was specifically noted in his review. (AE B.) 
 
Policies 
 
The U.S. Supreme Court has recognized the substantial discretion the Executive 
Branch has in regulating access to information pertaining to national security,  emphasizing 
that “no one has a ‘right’ to a security clearance.” Department of the Navy v. Egan, 484 
U.S. 518, 528 (1988). When evaluating an applicant’s suitability for a security clearance, 
the administrative judge must consider the adjudicative guidelines. In addition to brief 
introductory explanations for each guideline, the adjudicative guidelines list potentially 
disqualifying conditions and mitigating conditions, which are required to be considered in 
evaluating an applicant’s eligibility for access to classified information. These guidelines 
are not inflexible rules of law. Instead, recognizing the complexities of human behavior, 
these guidelines are applied in conjunction with the factors listed in the adjudicative 
process. The administrative judge’s overall adjudicative goal is a fair, impartial, and 
commonsense decision. According to AG ¶ 2(c), 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 access to classified 
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information will be resolved in favor of 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. 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 applicant or proven by Department Counsel. . . .” The applicant 
has the ultimate burden of persuasion to obtain a favorable security 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 
that the applicant may deliberately or inadvertently fail to safeguard classified information. 
Such decisions entail a certain degree of legally permissible extrapolation about potential, 
rather than actual, risk of compromise of classified information. Section 7 of Executive 
Order 10865 provides that 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 concerns about financial considerations are set forth in AG ¶ 18: 
 
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 classified information. An individual who is financially overextended is 
at risk of having to engage in illegal acts to generate funds. 
 
 The evidence establishes that Applicant obtained federal and private student loans 
for college between August 2006 and August 2009. When his federal student loans came 
out of deferment, he consolidated them for $37,415 in January 2011. He has been making 
timely payments on his federal student loan, but his private student loans became seriously 
delinquent and are charged off or in collection status. A comparatively small medical debt 
of $242 (SOR ¶ 1.f) from May 2011 was also reportedly in collection. Applicant does not 
recognize the debt, but the DOHA Appeal Board has held that a credit report can be 
sufficient to meet the substantial evidence standard for the government’s burden of 
producing evidence of alleged delinquent debts. See ISCR 14-03612 (App. Bd. Aug. 2015). 
Security concerns arise because of Applicant’s defaulted private student loans and his lack 
of knowledge about those financial obligations. At his security clearance hearing, he was 
unaware of his private student loan balances or who currently holds the debts. He had 
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started paying $107 a month to a collection agency, but could not identify which of the two 
accounts (SOR ¶¶ 1.c or 1.e) was being repaid. Two disqualifying conditions, AG ¶ 19(a), 
“inability or unwillingness to satisfy debts,” and AG ¶ 19(c), “a history of not meeting 
financial obligations,” apply. 
 
 Mitigating condition 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,” cannot 
reasonably apply. Although he obtained the student loans more than five years ago, his 
default is ongoing with respect to his private student loans, excepting perhaps the loan 
(likely SOR ¶ 1.e) on which he made some payment after the creditor brought him to court. 
Applicant indicated on his e-QIP that the lender brought a judgment claim against him in 
court for nonpayment of a $23,000 balance, but that the matter was resolved in April 2014 
in that he now makes monthly payments. 
 
 AG ¶ 20(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,” has some applicability in that his student loans can be attributed 
in substantial part to insufficient income. When his private student loans came out of 
deferment, Applicant was living with his parents, but he was earning only $11.50-$11.90 an 
hour. He was unable to find a job in his degree field. In April 2011, rent understandably 
took priority, although he exacerbated his financial stress by taking on a car loan in June 
2011. In February 2012, Applicant moved back into his parents’ home, and his brother 
counted on him to pay half of their parents’ $1,200 monthly mortgage payment. Applicant 
began working in a commission-based job in April 2012, but he failed to meet sales quotas 
so he did not earn enough to pay his student loans. In October 2013, Applicant was placed 
as a contract employee with his present employer at $13 an hour. When he became a 
direct hire of the company in late March 2014, his hourly wage increased to only $16.50, 
although his cousin had already taken over his car payment, so he should have been in a 
better position financially to address his student loans. 
 
 Applicant has been repaying his federal student loans at $59 every two weeks since 
his latest deferment ended. Around April 2014, he commenced repayment of his private 
student loan in SOR ¶ 1.e after the creditor sought a judgment. He told an OPM 
investigator that he was required to make monthly payments in no set amount. I held the 
record open after Applicant’s security clearance hearing for him to provide documentation 
that could shed light on the amounts and dates of payments for that debt and on the 
balances of his other private student loans in default. In April 2016, Applicant confirmed 
that the collection debt in SOR ¶ 1.a was an updated collection balance of one of the 
student loans obtained from the lender identified in SOR ¶ 1.g. He also indicated that he 
was currently paying what he could afford toward his student loans, and he expressed his 
“hope” to be able to continue to chip away at his debt. Some consideration is warranted of 
both AG ¶ 20(c), “the person has received or is receiving counseling for the problem and/or 
there are clear indications that the problem is being resolved or is under control,” and AG ¶ 
20(d), “the individual initiated a good-faith effort to repay overdue creditors or otherwise 
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resolve debts,” assuming as he testified that he has made some payments on the private 
student loan in SOR ¶ 1.e. However, Applicant has not presented a personal budget or 
other financial information from which I could reasonably conclude that he is doing what he 
can within his means to address his student loan debt. It is difficult to find that Applicant 
has acted responsibly with regard to the student loans in SOR ¶¶ 1.a-1.d without proof of 
reasonable and necessary expenses that could justify his ongoing inattention to those 
debts. He indicated that he was paying $150 for cable and $150 for his cell phone. Both 
expenses are difficult to justify when he is making no effort toward resolving the student 
loans in SOR ¶¶ 1.a-1.d. The financial considerations concerns are not fully mitigated 
under the adjudicative guidelines. 
 
Whole-Person Concept 
 
Under the whole-person concept, the administrative judge must consider the totality 
of an applicant’s conduct and all relevant circumstances in light of the nine adjudicative 
process factors in AG ¶ 2(a).
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 The analysis under Guideline F is incorporated in my whole-
person analysis. Some of the factors in AG ¶ 2(a) were addressed under that guideline, but 
some warrant additional comment. 
 
 The DOHA Appeal Board has held that an applicant is not required to establish that 
he has paid each debt in the SOR, or even that the first debts paid be those in the SOR. 
However, an applicant needs to show that he has a plan to resolve his debts and that he 
has taken significant steps to implement his plan. See ISCR 07-06482 (App. Bd. May 21, 
2008). Applicant has not been sufficiently proactive about resolving the issues of concern 
to the DOD. He understands that he is legally liable for repayment of student loans 
obtained in his name by his mother and yet has not educated himself about his private 
student loans. His outstanding performance at work for the defense contractor and his civic 
involvement weigh in his favor. Yet, it is well settled that once a concern arises regarding 
an applicant’s security clearance eligibility, there is a strong presumption against the grant 
or renewal of a security clearance. See Dorfmont v. Brown, 913 F.2d 1399, 1401 (9th
 
Cir. 
1990). Perhaps at some future date, Applicant may be able to rehabilitate his student loans 
to where their status no longer presents an unacceptable security risk. After considering all 
the facts and circumstances, it is not clearly consistent with the national interest to grant 
Applicant security clearance eligibility at this time. 
                                                 
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The factors under AG ¶ 2(a) are as follows: 
 
(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. 
 
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Formal Findings 
 
Formal findings for or against Applicant on the allegations set forth in the SOR, as 
required by section E3.1.25 of Enclosure 3 of the Directive, are: 
 
Paragraph 1, Guideline F:  AGAINST APPLICANT 
 
Subparagraphs 1.a-1.f: Against Applicant 
Subparagraph 1.g:  For Applicant
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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 Applicant eligibility for a security 
clearance. Eligibility for access to classified information is denied. 
 
_____________________ 
Elizabeth M. Matchinski 
Administrative Judge 
                                                 
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SOR ¶ 1.g is found for Applicant because it is the same debt as alleged in SOR ¶ 1.b and does not represent 
an additional debt.