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               DEPARTMENT OF DEFENSE 
     DEFENSE OFFICE OF HEARINGS AND APPEALS 
 
 
 
 
In the matter of:  ) 
 ) 
  (Redacted)  )   ISCR Case No. 16-02343 
   ) 
Applicant for Security Clearance  ) 
 
 
Appearances 
 
For Government: Carroll J. Connelley, Esq., Department Counsel 
For Applicant: Pro se 
 
 
______________ 
 
Decision 
______________ 
 
 
MATCHINSKI, Elizabeth M., Administrative Judge: 
 
Applicant did not file a timely federal income tax return for tax year 2013. He 
estimated his tax debt at $5,000. He defaulted on his federal student loans because of 
insufficient income, but he made some payments on his private student loans. He has 
likely resolved a credit card collection debt, but a credit card judgment of $1,409 from 2012 
is still outstanding. Although Applicant is not required to fully resolve his debts, more 
documented progress is needed toward resolving his tax and student loan issues to fully 
mitigate the financial considerations security concerns. Clearance is denied. 
 
Statement of the Case 
 
 On August 29, 2016, 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 (EO) 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 for 
 
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Determining Eligibility for Access to Classified Information (AG) effective within the DOD on 
September 1, 2006. 
 
On September 20, 2016, Applicant answered the SOR allegations and requested a 
hearing before an administrative judge from the Defense Office of Hearings and Appeals 
(DOHA). On October 28, 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 Applicant. On November 1, 2016, I scheduled a hearing for 
December 1, 2016. 
 
I convened the hearing as scheduled. Three Government exhibits (GEs 1-3) and 
three Applicant exhibits (AEs A-C) were admitted into evidence without objection. Applicant 
testified, as reflected in a transcript (Tr.) received on December 13, 2016. 
 
I held the record open, initially until January 3, 2017, for post-hearing submissions 
from Applicant. On January 1, 2017, Applicant submitted an email clarifying his student 
loan accounts (AE D) and three documents from student loan lenders (AEs E-G), which 
were admitted without objection from the Government. 
 
While this case was pending a decision, Security Executive Agent Directive 4 was 
issued establishing National Security Adjudicative Guidelines (AG) applicable to all covered 
individuals who require initial or continued eligibility for access to classified information or 
eligibility to hold a sensitive position. The AG supersede the adjudicative guidelines 
implemented in September 2006 and are effective for any adjudication made on or after 
June 8, 2017.1 
 
On July 8, 2017, I informed Applicant of the applicability of the new AG to his case 
and provided him a copy of the new AG, directing his attention to the financial 
considerations guideline. I also reopened the record for a status update about his debts 
with a response date of July 21, 2017. On July 19, 2017, Applicant indicated that he had 
been overseas for his employment and did not have access to his records. On July 24, 
2017, Applicant submitted a statement summarizing his finances (AE H). I extended the 
record to July 28, 2017, for corroborating documentation. On July 28, 2017, Applicant 
submitted his response with enclosures, which was marked collectively as AE I. On August 
3, 2017, Department Counsel expressed no objection to AEs H and I. The documents were 
accepted into evidence. 
 
Applicant also indicated on July 28, 2017, that he intended to submit his tax return 
that evening by an email attachment. Not having received the document by August 7, 
2017, I advised Applicant that he had a final deadline of August 11, 2017, for evidentiary 
submissions. I received no response and so closed the record on that date. 
                                                 
1 Application of the AGs that were in effect as of the issuance of the SOR would not change my decision in this 
case. 
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Findings of Fact 
 
 The SOR alleges under Guideline F that Applicant failed to timely file his federal 
income tax return for 2013 (SOR ¶ 1.a) and that he owes approximately $5,000 in federal 
tax debt for 2013 (SOR ¶ 1.b). Additionally, Applicant allegedly owes, as of August 29, 
2016, a $1,409 judgment from 2012 (SOR ¶ 1.c), student loan collection debt totaling 
$46,956 on seven accounts (SOR ¶¶ 1.d-1.j), and credit card collection debts of $1,493 
(SOR ¶ 1.k) and $446 (SOR ¶ 1.l). When he responded to the SOR allegations, Applicant 
admitted the debts, but indicated that the credit card debt in SOR ¶ 1.k was an updated 
balance of the judgment in SOR ¶ 1.c, and that he had started repaying his credit card 
delinquencies. He expressed regret for his tax filing and payment issues, and explained 
that he was working with a tax expert to resolve them. Concerning his student loans, his 
income had not been enough to make “the crippling payment of more than $1,000 a month 
in student loan debts.” He was repaying private student loans not alleged in the SOR and 
had paid over $12,000 in the past year. Applicant admitted that the student loans in the 
SOR were still in delinquent status. Applicant expressed his intention to address the 
student loans in SOR ¶¶ 1.d-1.h through a loan rehabilitation program first and then the 
student loans in SOR ¶¶ 1.i and 1.j.  
 
 After considering the pleadings, exhibits, and transcript, I find that the judgment in 
SOR 1.c was obtained to collect the balance of the credit card delinquency in SOR ¶ 1.k 
(hereinafter SOR ¶ 1.c). Additional findings of fact are as follows. 
 
Applicant is a 34-year-old structural designer. He attended college from September 
2003 to May 2008. He completed sufficient credits for his degree in May 2008, but in 
November 2015, he learned that he had not been awarded his degree. He was told that a 
professor had died before he and his classmates were awarded a grade. He resolved that 
situation, but he has a $5,000 to $6,000 debt to the institution that must be paid for his 
degree to be awarded. (GEs 1-2; Tr. 33, 39-40.) 
 
Applicant has freelanced as a designer since May 2008 in addition to holding full-
time employment also as a designer. In December 2013, he left his job of more than five 
years and moved with his then cohabitant girlfriend to another state. He was unemployed 
until April 2014, when he began working in sheet-metal fabrication for a car restoration 
business. His take-home pay was $450 to $500 a week. (Tr. 24.) In July 2014, Applicant 
accepted an offer of employment with a defense contractor contingent on favorable 
adjudication of security clearance eligibility. Applicant continued to work for the car 
restoration company until March 2015, when he and his then girlfriend ended their 
relationship. Applicant found work in the city where he had attended college. He stayed at 
his brother’s residence during the work week and returned to his apartment in an adjacent 
state on the weekends. In November 2015, Applicant obtained his current job designing 
outdoor furniture. He would like to work for the defense contractor that is still sponsoring for 
security clearance eligibility.  (GE 1; Tr. 23-25, 27-28.) 
 
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Applicant struggled to meet all of his financial obligations because of insufficient 
income after finishing his college studies. (GEs 1, 2.) The delinquency history and status of 
the debts in the SOR follows. 
 
Federal income tax return (SOR ¶ 1.a) and tax debt for 2013 (SOR ¶ 1.b) 
 
 On August 22, 2014, Applicant completed and certified to the accuracy of a 
Questionnaire for National Security Positions (SF 86) for a secret clearance. In response to 
a financial record inquiry concerning whether he had failed to file or pay federal, state, or 
other taxes in the last seven years, Applicant disclosed that he had not filed his federal 
income tax return for tax year 2013 and that he owed approximately $5,000 in federal 
taxes.2 He explained, “[w]as not working enough to pay the bills and the tax account started 
to get used to pay the bills.” He indicated that he was working on bringing his tax issues up 
to date. (GE 1.) 
 
Applicant testified that he filed his federal income tax return for 2013 when his return 
for 2015 was filed.3 He paid a tax preparer to complete the returns. (Tr. 61-63.) He 
indicated that his income tax refund for 2015 of $1,200 to $1,300 was withheld and applied 
to his federal tax debt for 2013. He reduced his tax exemptions to zero on his W-2 to 
ensure that he had sufficient taxes withheld from his income to cover any remaining tax 
liability for 2013. (Tr. 30, 64.) As of his hearing in December 2016, Applicant did not recall 
his actual tax liability for 2013. (Tr. 63.-64) He testified, “I know there is going to be a big 
bill.” He was not on any repayment plan with the IRS. (Tr. 66.) 
 
In a post-hearing update of July 24, 2017, Applicant discrepantly indicated that he 
had filed his 2013 federal income tax return with his 2016 (versus 2015) tax return, and that 
his refund for 2016 was taken and applied to his taxes owed for 2013. (AE H.) He had an 
opportunity to provide his income tax return, an IRS account transcript, or other evidence 
that could shed light on the discrepancy about the filing date for his 2013 federal income 
tax return. He indicated on July 28, 2017, that he would submit his 2013 tax filing for the 
record. (AE I.) No tax return was received. 
 
                                                 
2 Applicant clarified at his hearing that he was working freelance and issued a 1099 form. He was not familiar 
with reporting 1099 income and was living paycheck to paycheck. (Tr. 29, 61-62.) 
 
3 Applicant testified that his federal income tax return for 2013 was filed “shockingly late. They got filed with 
’15.” Applicant then discrepantly responded “Yes” when asked by Department Counsel whether he filed his tax 
return for 2013 with his 2014 tax return in 2015. (Tr. 62.) Other evidence suggests that Applicant did not file 
his 2013 federal income tax return before 2016. In a post-hearing submission of July 2017, Applicant 
discrepantly indicated that his 2013 tax return had been “done with [his] 2016 taxes.” (AE H.) His income tax 
return for tax year 2016 would not yet have been due as of his hearing in December 2016, so either Applicant 
misspoke and meant that his tax return for 2013 was filed in 2016 with his 2015 income tax return or he falsely 
testified at his hearing about his 2013 tax return having been filed. 
  
5 
 
Student Loans (SOR ¶¶ 1.d-1.j) 
 
 Applicant obtained student loans in his name to pay for college. His mother also 
obtained loans in her name to pay for his schooling. Available credit information shows that 
Applicant obtained five federal student loans totaling $29,142 (likely SOR ¶¶ 1.d-1.h)4 and 
two private student loans of $18,000 and $19,138 (not alleged in the SOR). (GEs 2-3; AEs 
A-B, E-F.) In November 2009, Applicant’s federal student loans in SOR ¶¶ 1.d-1.h were 
placed for collection. Applicant’s June 2016 credit report shows two additional state-
guaranteed student loan collection debts with respective balances of $4,401 and $3,301 
(SOR ¶¶ 1.i and 1.j).5 (GE 3.) 
 
On October 7, 2014, Applicant was interviewed by an authorized investigator for the 
Office of Personnel Management (OPM). When discussing his education and financial 
record, Applicant disclosed that he had issues with his private student loans that he began 
repaying in late 2008 or early 2009. He explained that he had a history of late payments of 
up to six months because of insufficient income. Applicant estimated that he owed 
approximately $80,000 in private and federal student loan debt. He explained that some of 
his student loans had been consolidated and some were in his mother’s name. He was 
unable to identify which loans had been co-signed or were in his mother’s name. Applicant 
stated that he was making $250 monthly payments to a private student loan lender and 
that he was also giving his mother $300 a month when he could afford to do so to repay a 
student loan in her name for his education. (GE 2.) 
 
Applicant informed an OPM investigator when re-contacted on October 28, 2014, 
that the collection entity in SOR ¶¶ 1.i and 1.j may have bought some of his student loans. 
He reviewed his credit report on Credit Karma and noticed the loans, but he did not 
recognize the creditor. On November 26, 2014, he informed the OPM investigator that he 
was late two or three days making his private student loan payments about four or five 
times a year. (GE 2.) Available credit information from June 2016 shows that Applicant’s 
private student loans had been 120 days or more past due in September 2014. (GE 3.) 
Since then, he has made significant progress in repaying his private student loans. A 
student loan interest statement for 2014 shows that he paid $945 in interest in 2014 (AE A) 
and $12,328 in interest in 2015 (AE B). Applicant prioritized repayment of his private 
student loans over his federal student loans because his grandparents had co-signed one 
of his private student loans for his last year in college. His parents had separated and could 
not afford to take on the debt, and he did not want his student loan debt to adversely affect 
his grandparents’ credit. (Answer.) As of June 2016, Applicant was current in his student 
loan payments on the private loans with balances of $24,467 and $23,888. He was paying 
the loan servicer between $320 (the monthly minimum) and $500, depending on whether 
                                                 
4 The principal balances of Applicant’s loans with the Department of Education match those held by the 
creditor in SOR ¶¶ 1.d-1.h. 
 
5 Applicant’s credit report also includes a student loan that originated in December 2003 for $6,125 that was 
transferred for collection. It is unclear whether that student loan is one of the five federal loans now in 
collection with the entity in SOR ¶¶ 1.d-1.h. Applicant indicated that his loan was transferred to the entity 
collecting the federal student loans. (AE D.) 
 
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he could afford more than the standard payment to reduce the principal. (Tr. 31.) Between 
January 2016 and November 2016, Applicant paid $3,172 toward his private student loans. 
(AE F.) 
 
On February 6, 2015, Applicant was re-interviewed in person by an OPM 
investigator about his student loans. He expressed his intention to make payment 
arrangements for his delinquent federal student loans. (GE 2.) On August 26, 2016, 
Applicant was notified that he owed a balance of $37,774 on his five federal student loans 
(SOR ¶¶ 1.d-1.h) because of interest.6 Applicant was informed that he could pay the total 
amount due or could enter into a repayment arrangement within 60 days to rehabilitate his 
loans. Otherwise, the Department of Education could take one or more collection actions, 
including reporting his loans in default status to the credit bureaus and taking forced 
collection action, such as garnishment or U.S. Treasury offset. (AE E.) Applicant indicated 
in September 2016 that when he reached one year in his current job in November 2016, he 
would enter into a loan rehabilitation program for his federal student loans and then work 
on resolving the two state-guaranteed student loans in SOR ¶¶ 1.i and 1.j. (Answer.) 
Applicant testified at his hearing in early December 2016 that he was giving his mother 
$300 a month for a parent-plus student loan in her name for his education. (Tr. 75.) He 
presented no proof of those payments, and the evidence sheds no light on how many 
payments he made to his mother before January 2017.  
 
The collection entity identified in SOR ¶¶ 1.d-1.h issued an administrative wage 
garnishment against Applicant’s mother in January 2017 for student loan debt exceeding 
$40,000. According to Applicant, he and his mother had been trying to arrange repayment, 
but they were “forced to finally deal with it.” Applicant’s mother arranged to repay the debt 
at $400 a month starting in February 2017. (AE H.) A handwritten entry on a billing 
statement to Applicant’s mother indicates that a $400 payment was made on February 10, 
2017, and that subsequent payments of $400 per month would be made by automatic 
deduction. Applicant provided documentation showing the payments for May, June, and 
July 2017 from his mother’s checking account. He explained that he pays his mother $300, 
and she is covering $100 of the monthly payment. As of June 14, 2017, the loan balance 
was $43,162, inclusive of interest and collection fees. Applicant indicated that he and his 
mother recently rehabilitated the loan as a result of the payments. (AE I.) It may well be a 
consolidated balance of Applicant’s federal student loans in SOR ¶¶ 1.d-1.h, although it 
could be a parent-plus or other loan that his mother obtained for his education. The 
collection entity assigned its own account number, and there is no documentation showing 
that Applicant’s federal loans have been removed from default status. According to 
Applicant, he has only one student loan “still in the wild.” (AE H.) Concerning the 
guaranteed student loan debts in SOR ¶¶ 1.i and 1.j, two of Applicant’s five federal student 
loans were obtained from a bank in the same state as the state-guaranteed student loans 
in SOR ¶¶ 1.i and 1.j, but the principal balances do not match those of the loans in SOR ¶¶ 
1.i and 1.j. The status of those loans is unclear. 
 
                                                 
6 The principal balances of the federal student loans in collection match those of the unpaid balances in SOR 
¶¶ 1.d-1.h rounded up or down to the nearest dollar. See GE 3; AE E. 
 
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Credit card debts (SOR ¶¶ 1.c and 1.l) 
 
Applicant opened a credit card account (SOR ¶ 1.c) in college that he used for 
subsistence and some school supplies. (Tr. 44.) After college, he paid the monthly 
minimums on the credit card, but the interest and fees accrued to where he could no longer 
afford to make his payments. In October 2010, a $1,350 balance was placed for collection. 
In May 2012, the collection entity obtained a $1,409 judgment. In July 2009, Applicant 
opened a credit card account (SOR ¶ 1.l) that he used to purchase a washer and dryer. 
The credit card was placed for collection for $1,002 in July 2011. (GEs 2-3; Tr. 49-50.) 
 
In March 2016, an OPM investigator interviewed Applicant to sign releases. 
Applicant volunteered that he had been paying $50 a month toward his credit card 
collection debts. (GE 2.) Payment records show that he made ten payments totaling $556 
between April 2015 and April 2016 to the collection entity holding both credit card debts. 
(AE G.) Applicant believed as of December 2016 that the payments have been applied to 
the credit card debt in SOR ¶ 1.c, but his June 2016 credit report failed to show any 
reduction in the balance placed for collection on that account. Credit information showing a 
reduction from $1,002 to $446 on his other credit card delinquency (SOR ¶ 1.l) indicates 
that his payments were applied to the debt in SOR ¶ 1.l. (GE 3; Tr. 44.) Applicant had not 
received any recent correspondence from the collection entity so he did not know the 
balances of the credit card debts in SOR ¶¶ 1.c and 1.l as of December 2016. (Tr. 45, 51-
52.) On July 24, 2017, Applicant expressed his belief that he had fully repaid both debts 
because he no longer sees monthly payments being deducted from his bank account. (AE 
H.) He presented no documentation corroborating full satisfaction for either debt. Assuming 
that his $55 monthly payments (AE G) had continued after April 2016, he may well have 
fully resolved the credit card delinquency in SOR ¶ 1.l, but he would still owe approximately 
$1,000 on the debt in SOR ¶ 1.c. 
 
As of November 23, 2016, Applicant’s net weekly pay was approximately $734. 
From that pay, he had $376 deposited into his personal bank account. Applicant had $357 
deposited into his landlord’s account to cover his rent and utilities. (AE C; Tr. 67-69.) 
Applicant has no open credit card accounts. (Tr. 24.) He drives a 1965 model-year vehicle 
and has no car payment, but his car insurance is $82 a month. He pays for his and his 
current girlfriend’s cell phone service at “roughly $80 a month.” (Tr. 71-74.) He lives from 
paycheck to paycheck. (Tr. 76-77.) As of November 2016, Applicant was involved in some 
freelance work that, if all goes well, will provide sufficient income in late 2017 to fully satisfy 
his private student loans. (Tr. 36, 77.) His girlfriend earns between $80 and $200 a week. 
(Tr. 73.) 
   
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 
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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(a), 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. 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 EO 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 articulated 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 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 
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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 Government met its burden of establishing a prima facie case for 
disqualification. Applicant did not timely file his federal income tax return for 2013. He 
estimated his tax liability at $5,000 as of August 2014. At his hearing in December 2016, 
he testified that an income tax refund of $1,200 to $1,300 was taken and applied to his tax 
debt for 2013, but also that he knew “there is going to be a big bill.” Concerning his student 
loans, Applicant had paid at least $16,446 between 2014 and November 2016 toward his 
private student loans, but he was in default on five federal student loans with a balance of 
$37,774 as of late August 2016. Two other student loans with balances of $4,401 and 
$3,301 were in collection as of May 2016. As of June 2016, he had yet to fully resolve a 
credit card judgment of $1,409 from May 2012 (SOR ¶ 1.c) or a credit card collection debt 
of $446 (SOR ¶ 1.l). As of his hearing in December 2016, none of the debts in the SOR 
had been resolved. Three disqualifying conditions under AG ¶ 19 apply, as follows: 
 
(a) inability to satisfy debts; 
 
(c) a history of not meeting financial obligations; and  
 
(f) failure to file or fraudulently filing annual Federal, state, or local income tax 
returns or failure to pay annual Federal, state, or local income tax as 
required. 
 
 Applicant has the burden of mitigating the security concerns raised by his delinquent 
debts and his noncompliance in 2014 with his income tax filing obligation for tax year 2013. 
Applicant received a 1099 form showing compensation for his freelance work for 2013 and 
could not afford to pay his tax liability. He had an obligation to file a timely return 
irrespective of whether he could afford to pay the taxes owed. Nevertheless, his late filing 
appears to have been aberrational and not likely to recur. See AG ¶ (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.” There is no evidence of a failure to timely file his 
income tax returns for prior or subsequent tax years. 
 
 Applicant’s delinquent tax, student loans, and credit card debts can reasonably be 
attributed to insufficient income. Applicant finished his college coursework in May 2008 
during a time of economic downturn. He found work as a designer, but it did not pay 
enough for him to make payments on his student loans when they came due. AG ¶ 20(b) 
has some applicability in that his financial situation was not caused by irresponsible 
spending or other factors within his control. AG ¶ 20(b) provides: 
 
10 
 
(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, a death, divorce or separation, clear 
victimization by predatory lending practices, or identity theft), and the 
individual acted responsibly under the circumstances. 
 
 However, Applicant has not shown that he acted fully responsibly under AG ¶ 20(b). 
There is no evidence that he took any action to avoid default of his federal student loans by 
seeking hardship deferments. Tracking student loans can be difficult once they are 
transferred for collection, but Applicant was unable to provide a reasonably accurate 
account of his loans during his October 2014 OPM interview or at his December 2016 
hearing. Concerning his credit card delinquencies, Applicant knew that he had stopped 
paying on the credit card in SOR ¶ 1.c in 2010. He claimed in October 2014 that he had 
paid the debt, but there is no evidence of any payments on either of his credit card debts 
before April 2015, when he started making $55 monthly payments to the collection entity. 
He indicated in July 2017 that he believed he had fully resolved the debts, given that 
payments were no longer being taken from his bank account. At best, only the credit card 
delinquency in SOR ¶ 1.l would be fully satisfied. There is no evidence that he increased 
his monthly payment to the collection entity. 
 
 AG ¶ 20(c), “the person has received or is receiving 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,” and AG ¶ 
20(d), “the individual initiated and is adhering to a good-faith effort to repay overdue 
creditors or otherwise resolve debts,” have some applicability. Applicant has made $55 
monthly payments since April 2015 that have likely fully satisfied the credit card debt in 
SOR ¶ 1.l. In July 2017, he submitted documentation showing that his mother started 
making $400 monthly student loan payments in 2017 after the collection entity holding 
Applicant’s federal student loans in SOR ¶¶ 1.d-1.h sought to attach her wages. Available 
evidence does not conclusively establish that the student loans being billed to his mother 
are his federal student loans in SOR ¶¶ 1.d-1.h. The collection entity for Applicant’s federal 
student loans is the entity to whom his mother is making $400 monthly payments. 
However, Applicant also indicated in July 2017 that “a loan” has been rehabilitated, but that 
he still has one student loan “in the wild,” that would lead one to reasonably conclude that 
at least one student loan is still pending repayment arrangements. As of late August 2016, 
Applicant’s federal student loans had a principal balance of $29,142 ($37,774 balance with 
interest) while the student loan in repayment had a principal balance of $39,542 as of June 
2017. 
 
 Even assuming that the payment for his federal student loans is being made from 
his mother’s bank account, Applicant has only about six months of payments, which is not 
long enough to clearly indicate that his student loans issues are under control. There is the 
unaddressed issue of the two state-guaranteed student loans in SOR ¶¶ 1.i and 1.j. 
Applicant has not had the credit counseling required under AG ¶ 20(c). Moreover, 
Applicant indicated that he and his mother were “forced to finally deal” with the student 
loan. There is no evidence of any payments before the collection entity issued a notice of 
11 
 
order of withholding from earnings to his mother’s employer in late January 2017. Efforts to 
resolve debts taken in response to a garnishment order do not carry the same weight in 
mitigation under AG ¶ 20(d) as had Applicant initiated contact with his lender and arranged 
for repayment. 
 
 AG ¶ 20(g), “the individual has made arrangements with the appropriate tax 
authority to file or pay the amount owed and is in compliance with those arrangements,” is 
partially implicated if Applicant filed his delinquent federal tax return for 2013. As previously 
discussed, he presented discrepant accounts of when the return was filed, but I do not 
doubt that it has been filed. He estimated his tax liability at $5,000 when he completed his 
SF 86 in August 2014. In December 2016, he testified that his income tax refund of 
$1,200-$1,400 for tax year 2015 had been applied to his tax debt for 2013, but he still 
expected a large tax bill. He indicated that he had additional funds taken out of his 
paycheck on a weekly basis for taxes, but he was not on any repayment plan with the IRS. 
 
 Even where tax problems have been corrected and an applicant is motivated to 
prevent such problems in the future, the administrative judge is not precluded from 
considering an applicant’s trustworthiness in light of prior behavior evidencing 
irresponsibility. See e.g., ISCR Case No. 14-01894 at 5 (App. Bd. Aug. 2015). Based on 
the evidence before me, it does not appear that Applicant has fully resolved his federal 
income tax delinquency from 2013 (SOR ¶ 1.b), the $1,409 credit card judgment (SOR ¶ 
1.c), or his student loans in SOR ¶¶ 1.d-1.j. Assuming that the $43,162 student loan 
balance being repaid from his mother’s account is Applicant’s federal student loan debt 
and not an additional loan that Applicant is legally obligated to repay, he still owes student 
loan debt exceeding $80,000 when also accounting for his private student loans. 
 
 The security clearance adjudication is not aimed at collecting an applicant’s 
personal debts. Rather, it involves an evaluation of an applicant’s judgment, reliability, and 
trustworthiness in light of the security guidelines in the Directive. See ISCR Case No. 09-
02160 (App. Bd. Jun. 21, 2010). Given the high cost of college, the concern is not so much 
with the extent of Applicant’s student loan debt but with his default on his student loans. 
The salient issue is whether he has done what he could within his income to address his 
financial obligations. 
 
 In evaluating Guideline F cases, the Appeal Board has established that an applicant 
is not required to pay off every debt in the SOR: 
 
The Board has previously noted that the concept of a meaningful track 
record necessarily includes evidence of actual debt reduction through 
payment of debts. However, an applicant is not require, 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 evaluating the extent to which that applicant’s plan for 
the reduction of his outstanding indebtedness is credible and realistic. There 
12 
 
is no requirement that the 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.  
 
See ISCR Case No. 07-06482 at 2-3 (App. Bd. May 21, 2008) (internal citations and 
quotation marks omitted). Applicant gave priority to repaying his private student loans over 
his federal student loans because he did not want to jeopardize his grandparents’ credit. 
He presented evidence of payments only since 2014, when he paid $945 in interest that 
year. The lender reported receiving $12,328 in interest payments from Applicant in 2015. 
Applicant testified that he made payments of “roughly $1,100” a month in 2015 to reduce 
his principal, well in excess of the $319 per month required. (Tr. 31-32.) Under Appeal 
Board precedent, Applicant’s private student loan payments may be considered in 
evaluating his plan to resolve his debts. AE F shows that, for the most part, he has paid 
$319 a month on his private student loans since February 2016. At the same time, one has 
to question Applicant’s financial judgment in paying so much toward his private student 
loans in 2015 when he was making no payments on his defaulted federal student loans 
and owed federal income taxes from 2013. Applicant was placed on notice during his 
September 2014 OPM interview that he had several past-due student loans on his record 
that he did not recognize. He indicated that he would obtain his credit report and attempt to 
verify his debts. Two years later, he had yet to make any repayment arrangements for his 
federal student loans or for the two state-guaranteed student loans in SOR ¶¶ 1.h and 1.i. 
He arranged to have more taxes withheld from his income that he hoped would resolve his 
tax liability for 2013, but he had no made no payments directly to the IRS. While his 
payments toward his private student loan are viewed favorably, more progress is needed 
toward resolving his debt issues in the SOR. The financial considerations security concerns 
are not adequately mitigated. 
 
Whole-Person Concept 
 
In assessing the whole person, 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(d).7 The analysis under Guideline F is incorporated in my whole-
person analysis. Some of the factors in AG ¶ 2(d) were addressed under that guideline, but 
some warrant additional comment. 
 
                                                 
7 The factors under AG ¶ 2(d) 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.  
13 
 
 Applicant demonstrated poor judgment in failing to comply with his income tax filing 
and tax payment obligation for tax year 2013, although he has shown some mitigation by 
apparently filing his delinquent tax return. Two years after his September 2014 interview for 
his background investigation, Applicant acknowledged that he had yet to take any action to 
address several of his student loans, and he did not know how much he owed in back 
taxes for 2013. He has not yet fully allayed the security concerns raised by his years of 
disregard of his federal student loans. 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.) Based on all the information of record, I am unable to conclude that it is clearly 
consistent with the national interest to grant Applicant security clearance eligibility at this 
time. 
 
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 
 
Subparagraph 1.a:   For Applicant 
Subparagraphs 1.b-1.j:  Against Applicant 
Subparagraphs 1.k-1.l:  For Applicant8 
 
Conclusion 
 
In light of all of the circumstances, 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 
                                                 
8 SOR ¶ 1.k is resolved for Applicant because it is a duplicate listing and not an additional debt.