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DEPARTMENT OF DEFENSE 
DEFENSE OFFICE OF HEARINGS AND APPEALS 
           
             
 
 
In the matter of: ) 
 ) 
 [REDACTED] )  ISCR Case No. 17-01580 
 ) 
Applicant for Security Clearance ) 
 
 
Appearances 
 
For Government: David Hayes, Esq., Department Counsel 
For Applicant: Pro se 
 
 
______________ 
 
Decision 
______________ 
 
 
HESS, Stephanie C., Administrative Judge: 
 
 This case involves security concerns raised under Guideline F (Financial 
Considerations). Due to circumstances largely beyond her control, Applicant was unable 
to meet her student-loan obligations. However, Applicant acted responsibly under the 
circumstances and has mitigated the potential financial security concern. Eligibility for 
access to classified information is granted. 
 
Statement of the Case 
 
Applicant submitted a security clearance application (e-QIP) on May 13, 2016. On 
June 21, 2017, the Department of Defense (DOD) sent her a Statement of Reasons 
(SOR), alleging security concerns under Guideline F. The DOD acted under Executive 
Order (Ex. Or.) 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 June 8, 2017. 
 
Applicant answered the SOR and requested a hearing before an administrative 
judge. Department Counsel was ready to proceed on August 30, 2017, and the case was 
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assigned to me on December 14, 2017. On February 14, 2018, the Defense Office of 
Hearings and Appeals (DOHA) notified Applicant that the hearing was scheduled for 
March 7, 2018. I convened the hearing as scheduled. Government Exhibits (GX) 1 
through 4 were admitted in evidence without objection. She testified and submitted 
Applicant’s Exhibits (AX) A and B, which were admitted without objection. DOHA received 
the transcript (Tr.) on March 16, 2018. 
 
Findings of Fact 
 
Applicant is a 30-year-old quality assurance analyst employed by a federal 
contractor since August 2015. She earned her bachelor’s degree in 2010 and her 
master’s degree in 2014. She and her cohabitant since 2012 have a toddler-age daughter. 
This is Applicant’s first application for a security clearance. (GX 1; Tr. 42.)  
 
The SOR alleges three delinquent student loans totaling $102,837 and two 
delinquent medical accounts totaling $225. In her Answer, Applicant admits each of the 
student loans, and denies the medical debts. With her Answer, Applicant provided an 
explanation of the origin and status of the student loans. The delinquent debts are 
reflected in Applicant’s April 2017 and July 2016 credit bureau reports (CBR), listed on 
her e-QIP, and discussed in her personal subject interview (PSI) summary. (GX 4; GX 3; 
GX 1; GX 2.) Applicant’s admissions are incorporated in my findings of fact. 
 
When Applicant began college in 2006, she had a scholarship that paid 75% of her 
tuition. Applicant was residing at her parent’s home and commuting to classes. Despite 
working part-time jobs, she needed additional money to assist with books and commuting 
costs. She met with representatives at the student-loan office at her university who 
provided her with information about a Tuition Answer Loan, a then-popular type of private 
student loan. Applicant provided the information about the loan to her mother, because 
the loan required a cosigner, and her mother agreed to cosign the loan of approximately 
$1,000. This is the $4,903 debt alleged in SOR ¶ 1.c. (Tr. 30.) 
 
During her second semester, Applicant moved to off-campus housing and needed 
to borrow approximately $3,000 to $4,000 to assist with living expenses. She again met 
with representatives at the university who provided her with a loan application which 
required a cosigner. Applicant completed her portion of the loan application, and left it 
with her mother to sign and submit. At the same time, Applicant’s mother was 
experiencing a financial crisis due to a readjustment of her mortgage-loan and needed 
approximately $20,000-$25,000 to keep her home out of foreclosure. Applicant’s mother 
altered Applicant’s student-loan application by requesting $30,000, the maximum amount 
offered, cosigning the document, and submitting the application. (Tr. 30-35.) 
 
In March 2007, Applicant received a $30,000 student-loan disbursement. Applicant 
immediately discussed this disparity with her mother who stated that she needed the 
approximately $25,000 surplus to keep the house from foreclosure and that she would 
withdraw a lump sum her 401(k) to repay the entire $30,000 loan, plus the $1,950 
origination fee. (Tr. 14-16.) This is the $77,972 debt alleged in SOR ¶ 1.a. (Tr. 31.) 
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Prior to the loan’s becoming due, Applicant’s mother’s longtime federal-contractor 
employer lost its contract and shut down, and Applicant’s mother was laid off. The local 
economy was hit hard, and Applicant’s father, who owned a construction business, was 
no longer getting any work. Applicant’s mother eventually found employment, but her 
father did not, and they experienced a period of significant financial strain. Applicant’s 
father became ill, and ultimately passed away in early 2018. Applicant’s mother now has 
the additional financial burden of Applicant’s father’s outstanding medical bills. Applicant’s 
mother did not repay the loan as promised and has no intention of doing so. (Answer; Tr. 
21; Tr. 36.) 
 
Applicant borrowed a third private student loan to cover her tuition for the 2007 
summer semester, as she did not receive scholarship money for the summer semester. 
This is the $19,962 debt alleged in SOR ¶ 1.b. (Tr. 23.) 
 
Applicant met with representatives at the financial aid office at her university during 
her second year of college. It was at that time that Applicant learned that she was eligible 
for federal student loans in lieu of private loans. Applicant borrowed federal student loans 
to complete her undergraduate degree and her master’s degree, and the current balance 
is approximately $132,000. Applicant has been repaying the loans since graduating in 
2015, and has never missed a payment. However, her repayment schedule is based on 
her income and is due to increase by $300 a month, which is the entirety of Applicant’s 
average monthly net remainder. Because of this, Applicant placed the loans in 
forbearance for 12 months. (Tr. 19; Tr. 37.) 
 
Despite her mother’s misuse of Applicant’s student-loan funds, Applicant has 
sought out ways to resolve the loans. Applicant’s Tuition Answer Loans have been sold 
multiple times to different creditors. In 2014, after completing her education and entering 
the workforce full-time, she contacted the current creditor in an effort to make repayment 
arrangements, but the creditor demanded payment in full for the combined total of the 
three loans which Applicant was unable to afford. (Answer.) Because the three Tuition 
Answer Loans were private, Applicant could not include them in the consolidation of her 
federal student loans. Applicant met with an attorney to discuss her options. The attorney 
did not recommend bankruptcy because releasing the delinquent student loans would be 
at the discretion of the bankruptcy judge. Instead, the attorney advised that after six years 
collection of the loans would be barred by the statute-of-limitations and recommended 
that Applicant allow collection of the loans to become unenforceable. The attorney did not 
recommend making any payments because such actions would restart the statute-of-
limitations clock. Applicant does not have legal recourse to enforce her mother’s promise 
to repay the loan. (Tr. 16-17; Tr. 20-22; Tr. 36.) 
 
When Applicant borrowed $30,000 in 2007, she was charged an origination fee of 
$1,950. The loan carried an interest accrual rate of 14.75%. Under the terms of the loan, 
Applicant was required to pay $186,316 in 300 installments of over $620 a month for 25 
years. (AX A.) However, because Applicant relied on her mother’s assertion that she 
would repay the loan it in its entirety, she did not anticipate being personally responsible 
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for repayment of the loan. Applicant would repay the delinquent student loans if she were 
able. (Tr. 29-34; Tr. 24-25.)  
 
Applicant is unfamiliar with the $140 medical debt alleged in SOR ¶ 1.d and the 
$85 medical debt alleged in SOR ¶ 1.e. There is no contact information on the CBR for 
the creditors of these debts. Applicant has not received any correspondence from any 
creditor attempting to collect these debts. However, she is willing to pay them if she is 
able to identify the creditors. (Tr. 39.) 
 
Applicant lives within her means, however, she is under constant financial strain. 
Applicant and her partner’s young daughter, not yet two, has special needs. Applicant is 
unable to afford the significantly higher daycare costs for a special needs child, so her 
partner has become a stay-at-home father to care for their daughter. (Tr. 19-20.) Despite 
the demands on her finances, Applicant has not incurred any recent delinquent debt, has 
reduced her discretionary spending, and maintains a monthly budget. She has 
consistently and timely paid her federal student loans for over three years. (Tr. 39.) 
Following the advice of a renowned financial advisor, Applicant keeps a balance in her 
savings account of approximately $3,500, which equals two months’ rent. (Tr. 50-51.) 
Applicant was straightforward, sincere, and credible in her testimony.  
 
Policies 
 
 “[N]o one has a ‘right’ to a security clearance.” Department of the Navy v. Egan, 
484 U.S. 518, 528 (1988). As Commander in Chief, the President has the authority to 
“control access to information bearing on national security and to determine whether an 
individual is sufficiently trustworthy to have access to such information.” Id. at 527. The 
President has authorized the Secretary of Defense or his designee to grant applicants 
eligibility for access to classified information “only upon a finding that it is clearly 
consistent with the national interest to do so.” Exec. Or. 10865, Safeguarding Classified 
Information within Industry § 2 (Feb. 20, 1960), as amended.  
 
Eligibility for a security clearance is predicated upon the applicant’s meeting the 
criteria contained in the AG. These guidelines are not inflexible rules of law. Instead, 
recognizing the complexities of human behavior, an administrative judge applies these 
guidelines in conjunction with an evaluation of the whole person. An administrative 
judge’s overarching adjudicative goal is a fair, impartial, and commonsense decision. An 
administrative judge must consider all available and reliable information about the person, 
past and present, favorable and unfavorable. 
 
 The Government reposes a high degree of trust and confidence in persons with 
access to classified information. This relationship transcends normal duty hours and 
endures throughout off-duty hours. 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. 
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Clearance decisions must be made “in terms of the national interest and shall in 
no sense be a determination as to the loyalty of the applicant concerned.”  See Exec. Or. 
10865 § 7. Thus, a decision to deny a security clearance is merely an indication the 
applicant has not met the strict guidelines the President and the Secretary of Defense 
have established for issuing a clearance. 
  
Initially, the Government must establish, by substantial evidence, conditions in the 
personal or professional history of the applicant that may disqualify the applicant from 
being eligible for access to classified information. The Government has the burden of 
establishing controverted facts alleged in the SOR. See Egan, 484 U.S. at 531. 
“Substantial evidence” is “more than a scintilla but less than a preponderance.” See v. 
Washington Metro. Area Transit Auth., 36 F.3d 375, 380 (4th Cir. 1994). The guidelines 
presume a nexus or rational connection between proven conduct under any of the criteria 
listed therein and an applicant’s security suitability. See ISCR Case No. 92-1106 at 3, 
1993 WL 545051 at *3 (App. Bd. Oct. 7, 1993).  
 
 Once the Government establishes a disqualifying condition by substantial 
evidence, the burden shifts to the applicant to rebut, explain, extenuate, or mitigate the 
facts. Directive ¶ E3.1.15. An applicant has the burden of proving a mitigating condition, 
and the burden of disproving it never shifts to the Government. See ISCR Case No. 02-
31154 at 5 (App. Bd. Sep. 22, 2005).  
 
An applicant “has the ultimate burden of demonstrating that it is clearly consistent 
with the national interest to grant or continue his security clearance.” ISCR Case No. 01-
20700 at 3 (App. Bd. Dec. 19, 2002). “[S]ecurity clearance determinations should err, if 
they must, on the side of denials.” Egan, 484 U.S. at 531; see AG ¶ 2(b).  
 
Analysis 
 
Guideline F, Financial Considerations 
 
The concern under this guideline is set out in AG ¶ 18:  
 
Failure to live within one's means, satisfy debts, and meet financial 
obligations may indicate poor self-control, lack of judgment, or unwillingness 
to abide by rules and regulations, all of which can raise questions about an 
individual's reliability, trustworthiness, and ability to protect classified or 
sensitive information…. 
 
This concern is broader than the possibility that an individual might knowingly 
compromise classified information in order to raise money. It encompasses concerns 
about an individual’s self-control, judgment, and other qualities essential to protecting 
classified information. An individual who is financially irresponsible may also be 
irresponsible, unconcerned, or negligent in handling and safeguarding classified 
information. See ISCR Case No. 11-05365 at 3 (App. Bd. May 1, 2012). 
  
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The record evidence establishes the following disqualifying conditions under this 
guideline:  
 
AG ¶ 19(a): an inability to satisfy debts; and  
 
AG ¶ 19(c): a history of not meeting financial obligations.  
 
The following mitigating conditions are potentially applicable: 
 
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; and 
 
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, a death, divorce or separation, 
clear victimization by predatory lending practices, or identity theft), and the 
individual acted responsibly under the circumstances. 
 
 When Applicant began college in 2006, despite receiving a 75% scholarship, she 
needed to borrow an additional $1,000.  
  
 The conditions that caused Applicant to become delinquent on her student loans 
arose under unique circumstances which were largely beyond her control. Initially, 
Applicant sought the advice of representatives at her university’s student-loan office and 
was steered into applying for a high-interest rate private loan. Then, without Applicant’s 
permission or knowledge, her mother, as a required cosigner, altered the amount of the 
loan request. When Applicant received a disbursement for $30,000 instead of the $3,000 
to $4,000 loan she had applied for, her mother explained that she needed to borrow the 
remaining amount to prevent foreclosure of her home and promised to repay the loan in 
its entirety out of her 401(k). Applicant relied on the advice of the financial-aid office’s 
representatives and the promise of her mother to Applicant’s detriment. Applicant acted 
responsibly under the circumstances by identifying and contacting the creditor of her 
delinquent student loans and attempting to negotiate a repayment plan. When the creditor 
was unwilling to work with Applicant, she contacted an attorney who recommended that 
applicant wait for the loans to become unenforceable. Applicant was unable to identify 
the two creditors of the $225 of medical debt alleged in the SOR, however, she is willing 
to pay these two accounts. With the exception of the delinquent student loans, Applicant 
has a sound financial record, which includes over three years of consistent repayment of 
her Federal student loans. She has no recent delinquent debt, lives within her means, 
and actively manages her finances. Applicant’s delinquent debts are not due to lack of 
self-control, irresponsibility, or unwillingness to abide by rules and regulations. AG ¶¶ 
20(a) and 20(b) apply. 
 
 
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Whole-Person Concept 
 
 Under AG ¶ 2(c), the ultimate determination of whether to grant eligibility for a 
security clearance must be an overall commonsense judgment based upon careful 
consideration of the guidelines and the whole-person concept. In applying the whole-
person concept, an administrative judge must evaluate an applicant’s eligibility for a 
security clearance by considering the totality of the applicant’s conduct and all relevant 
circumstances.  I have incorporated my comments under Guideline F in my whole-person 
analysis. Some of the factors in AG ¶ 2(d) were addressed under that guideline, but I 
have also considered the following: 
 
 At the age of 18, Applicant relied on the recommendation of her university’s student 
loan office’s representatives and on her mother’s promise which resulted in significant 
and untenable student-loan debt. Applicant’s mother’s refusal to repay the approximately 
$25,000 of the original $31,950 student loan that she used to prevent foreclosure of her 
home is the original cause of Applicant’s financial difficulties. Applicant otherwise 
maintains control of her finances. Applicant was straightforward, sincere, and credible in 
her testimony.  
 After weighing the disqualifying and mitigating conditions under Guideline F, and 
evaluating all the evidence in the context of the whole person, I conclude Applicant has 
mitigated the potential security concerns raised by her financial issues. Accordingly, I 
conclude she has carried her burden of showing that it is clearly consistent with the 
national interest to grant her eligibility for access to classified information. 
 
Formal Findings 
 
As required by section E3.1.25 of Enclosure 3 of the Directive, I make the following 
formal findings on the allegations in the SOR: 
  
 Paragraph 1, Guideline F (Financial Considerations):  FOR APPLICANT 
 
  Subparagraphs 1.a through 1.e:    For Applicant 
 
Conclusion 
 
 I conclude that it is clearly consistent with the national interest to grant or continue 
Applicant’s eligibility for a security clearance. Eligibility for access to classified information 
is granted. 
 
 
 
Stephanie C. Hess 
Administrative Judge