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                            DEPARTMENT OF DEFENSE                                                  
             DEFENSE OFFICE OF HEARINGS AND APPEALS                               
           
             
 
In the matter of: ) 
 ) 
  )  ISCR Case No. 17-00233 
  ) 
 ) 
Applicant for Security Clearance ) 
 
Appearances 
 
For Government: Caroline E. Heintzelman, Esq., Department Counsel 
For Applicant: Pro se 
 
 
 
______________ 
  
Decision 
______________ 
 
 
DAM, Shari, Administrative Judge: 
 
Applicant failed to mitigate the financial considerations security concerns arising 
from unpaid student loans and a delinquent credit card debt. National security eligibility 
for access to classified information is denied. 
 
History of Case 
 
On February 2, 2016, Applicant submitted a security clearance application (SCA). 
On February 21, 2017, the Department of Defense Consolidated Adjudications Facility 
(DoD CAF) issued Applicant a Statement of Reasons (SOR) alleging 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 adjudicative 
guidelines effective within the DoD after September 1, 2006. On June 8, 2017, new AG 
were implemented and are effective for decisions issued after that date.1 
                                            
1 I considered the previous AG, effective September 1, 2006, as well as the new AG, effective June 8, 
2017. My decision would be the same if the case was considered under the previous AG. 
 
 
 
 
2 
 Applicant answered the SOR in writing on April 5, 2017 (Answer), and requested 
a hearing before an administrative judge. The Defense Office of Hearings and Appeals 
(DOHA) assigned the case to me on June 22, 2017. DOHA issued a Notice of Hearing 
on August 24, 2017, setting the hearing for September 19, 2017. Department Counsel 
offered Government Exhibits (GE) 1 through 6 into evidence. Applicant testified, called 
one witness, and offered Exhibits (AE) 1 through 20 into evidence. All exhibits were 
admitted without objection. DOHA received the hearing transcript (Tr.) on September 27, 
2017. The record remained open until October 24, 2017, to permit submission of 
additional evidence. Applicant subsequently requested an extension of that date and 
Department Counsel had no objection to his request. I extended the deadline to 
November 15, 2017. Applicant timely submitted AE 21 through 25, along with a letter that 
I marked as AE 26. Department Counsel had no objections to those documents, and they 
are admitted.  
 
Findings of Fact 
 
 Applicant is 31 years old and unmarried. He earned an associate’s degree in 2011. 
He has worked for his employer, a defense contractor, since 2013. He said his employer 
is pleased with his performance. (Tr. 24-25; GE 1) 
  
 After submitting his February 2016 SCA, Applicant was interviewed by a 
government investigator in November 2016. The investigator confronted him about his 
student loans and two delinquent credit card debts listed on his credit report, all of which 
were subsequently alleged in the SOR. He agreed he owed some of the student loan 
debt, but asserted not all of it. He would agree to a reasonable settlement, assuming he 
could afford it. (GE 2) 
 
 Applicant admitted during his interview that he previously misused credit cards. He 
also explained that in 2006 he obtained three privately funded student loans, totaling 
about $70,000, to attend pilot training classes conducted by [Company A]. He completed 
40 to 50 hours of the 200 hours required for certification, after which the school closed 
and went bankrupt. He was subsequently unable to complete the remaining hours for 
which his lender had paid. In 2014, he said the creditor contacted him, offering him a 
settlement of $58,770, with three payments of $19,000. He made a counter-offer for 
$15,000 to be paid through monthly payments until paid. The creditor rejected the offer. 
Applicant understood that he owed some money for the hours he earned, but does not 
believe he owed the offered amount because he was unable to complete the course. (GE 
2) 
   
 Based on credit bureau reports (CBR) from January 2017, February 2016, and 
September 2017, the SOR alleged five delinquent debts: three are the above-mentioned 
delinquent student loans that now total $57,676; one is an $8,186 judgment for a 
delinquent credit card account; and one is a collection account for an unpaid credit card 
debt of $548. The allegations accumulated between 2008 and 2015. (GE 2, GE 3, GE 4; 
GE 6) The status of each allegation is as follows: 
  
 
 
 
 
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 SOR ¶ 1.a: The $8,186 judgment for an unpaid credit card was entered in July 
2013 and subsequently his wages were garnished. Applicant used the credit card for 
living expenses during and after learning the pilot training program was closed. He said 
that his wages were garnished once after the judgment was entered, but those monies 
were returned to him because the creditor engaged in illegal practices in initiating the 
lawsuit. Applicant did not submit any document stating that the case has been was 
resolved or dismissed. In October 2017, Applicant proposed making monthly payments 
of $250 on the debt, but the creditor wanted a payment of $3,400 before initiating those 
payments. Applicant does not have $3,400. The debt is unresolved and has increased to 
$11,339. (Tr. 28-31, 40; GE 5; AE 22) 
 
 SOR ¶¶ 1.b, 1.c, and 1.d: These three student loans are unpaid and unresolved. 
In May 2008, after the school closed, Applicant was notified that his loans would become 
due in December 2008. He then hired a lawyer to represent him in a class action suit.  
To-date, he has never made any payments toward the debt. He spoke to the creditor in 
January 2017, who asserted that he still owed the debt. The creditor submitted a proposed 
settlement of $14,563 that could be paid in three installments. Applicant has since spoken 
to a lawyer, who told him that the statute of limitations passed and the creditor is not suing 
students for their unpaid debts. In his October 2017 letter, the lawyer indicated that class 
action suits were filed and settled against the lenders, however, Applicant was not part of 
that suit. Applicant intends to continue disputing the entire debt, but is willing to pay 
something on it. He believes the creditor bears some responsibility for the debt because 
it irresponsibly released funds. This matter remains unresolved. (Tr. 31-35, 42-44; AE 7, 
AE 23, AE 26) 
 
 SOR ¶ 1.e: Applicant paid this $548 credit card debt in 2011. (Tr. 36-37; AE 10) It 
is resolved. 
   
 Applicant submitted a budget that he established in September 2017 with the 
assistance of a non-profit credit counseling organization. Applicant’s net monthly income 
is $4,095 and his expenses are $3,700. His current credit report indicates that he pays 
bills on time. (Tr. 37; AE 16, AE 22) He has not taken credit or budget counseling, but has 
inquired about enrolling in a course. (Tr. 28) 
 
 Applicant’s employer testified. He has also been Applicant’s supervisor for four 
years. He said Applicant is a reliable and honest employee. He has never had a 
performance problem with Applicant. He recommends him for a security clearance. (Tr. 
46-49) 
   
Policies 
 
 When evaluating an applicant’s suitability for national security eligibility, the 
administrative judge must consider the AG. In addition to brief introductory explanations 
for each guideline, the AG list potentially disqualifying conditions and mitigating 
conditions, which are to be used in evaluating an applicant’s national security eligibility. 
 
 
 
 
 
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 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 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 applicable guidelines in the context 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. I have not drawn inferences based on mere speculation or 
conjecture.  
 
 Directive ¶ E3.1.14 requires the Government to present evidence to establish 
controverted facts alleged in the SOR. Directive ¶ E3.1.15 states that an “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, and has the 
ultimate burden of persuasion as to obtaining a favorable clearance decision.”  
 
 A person applying for national security eligibility seeks to enter 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 national 
security eligibility. Decisions include, by necessity, consideration of the possible risk the 
applicant may deliberately or inadvertently fail to protect or safeguard classified 
information. Such decisions entail a certain degree of legally permissible extrapolation as 
to potential, rather than actual, risk of compromise of classified or sensitive information.  
 
 Finally, as emphasized in Section 7 of Executive Order 10865, “[a]ny determination 
under this order adverse to an applicant shall be a determination in terms of the national 
interest and shall in no sense be a determination as to the loyalty of the applicant 
concerned.” See also Executive Order 12968, Section 3.1(b) (listing multiple prerequisites 
for access to classified or sensitive information.) 
 
Analysis 
 
Guideline F: Financial Considerations 
 
 The security concerns relating to the guideline for financial considerations are set 
out in AG ¶ 18, which reads in pertinent part:   
 
Failure to live within one’s means, satisfy debts, and meet financial 
obligations may indicate poor self-control, lack of judgment, or 
 
 
 
 
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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 personal 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. 
 
 AG ¶ 19 describes conditions that could raise security concerns. Three may be 
disqualifying in this case:  
 
(a) Inability to satisfy debts; 
 
(b) unwillingness to satisfy debts regardless of the ability to do so; and  
 
(c) a history of not meeting financial obligations. 
 
Applicant has a history of financial difficulties that began in 2008 and continues to 
date. He has been unwilling or unable to satisfy or resolve those debts. These facts 
establish prima facie support for the foregoing disqualifying conditions, and shift the 
burden to Applicant to mitigate the resulting security concerns. 
 
 The guideline includes conditions in AG ¶ 20 that could mitigate the security 
concerns arising from Applicant’s alleged financial difficulties. The following may 
potentially apply:  
 
(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, clear 
victimization by predatory lending practices, or identity theft), 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 
 
(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. 
 
 
 
 
 
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 Applicant did not present evidence to establish mitigation under AG ¶ 20(b) as to 
his delinquent credit card debts, as he admitted that he misused them, which was a 
circumstance within his control. He established some mitigation under this condition as 
to his student loans, because the circumstance underlying the debts, the school’s closing, 
was not within his control. There is no evidence that Applicant attempted to responsibly 
manage his credit card debts as they were accumulating; however, he did submit 
evidence that he hired a lawyer to represent him after the school closed in 2008, in an 
attempt to resolve the student loans. AG ¶ 20(b) partially applies to those allegations. 
 
Applicant did not provide evidence that he participated in credit or financial 
counseling and that his large delinquencies are under control, as required under AG ¶ 
20(c). He paid the smallest debt alleged in SOR ¶ 1.e, establishing mitigation under AG 
¶ 20(d) as to that debt. He admitted that he owed all of the other four alleged debts, but 
contended that he does not owe the full amount of the student loan debts. He provided 
some evidence that he has a reasonable basis for his position regarding the loans and 
has taken some steps to resolve the issue. AG ¶ 20(e) partially applies.  
 
Whole-Person Concept 
 
 Under the whole-person concept, the administrative judge must evaluate an 
applicant’s national security eligibility 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. 
 
According to AG ¶ 2(c), the ultimate determination of whether to grant national security 
eligibility must be an overall commonsense judgment based upon careful consideration 
of the applicable guidelines and the whole-person concept.  
 
I considered the potentially disqualifying and mitigating conditions in light of all 
pertinent facts and circumstances surrounding this case, including those mentioned in the 
analysis of the financial considerations guideline. Applicant has successfully worked for 
his employer for the past four years. He was candid and forthright during his testimony. 
He accepts responsibility for the two credit card debts, and paid one of them. He 
acknowledged that he owed a portion of his large student loan debt. He appears to be 
appropriately managing his other finances. Those are positive factors in this case. 
However, the large credit card debt and all student loans remain unresolved. He did not 
present any evidence that he has made a single payment on them or has a plan to resolve 
 
 
 
 
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them. At this time, he has not established a solid record of responsibly resolving his 
delinquent debts. Overall, he has not met his burden to mitigate the security concerns 
arising under the guideline for financial considerations.  
 
Formal Findings 
 
 Formal findings for or against Applicant on the allegations set forth in the SOR, as 
required by ¶ E3.1.25 of the Directive, are: 
 
  Paragraph 1, Guideline F:   AGAINST APPLICANT 
 
       Subparagraphs 1.a through 1.d:        Against Applicant 
 
       Subparagraph 1.e:          For Applicant 
 
Conclusion 
 
 In light of all of the circumstances presented by the record in this case, it is not 
clearly consistent with the interests of national security to grant Applicant access to 
classified information. National security eligibility is denied. 
                                        
         
SHARI DAM 
Administrative Judge