Failure to Pay Student Loans Leads to Clearance Denial

Financial considerations continue to be the top issue in the denial of eligibility for a security clearance. I have noticed a few recent appeals to the Defense Office of Hearing and Appeals (DOHA) where clearance applicants are using the President’s decision to hold student loan payments in abeyance as an excuse when submitting their appeals. Here are the highlights of two separate cases:

This DoD contractor has four student loans that have been delinquent since 2017. The DoD CAF issued the applicant a Statement of Reason (SOR) asking her to provide information as to why the loans became delinquent and what measures were or are being taken to address them. The applicant’s response to the SOR didn’t provide any information that mitigated the concerns and as a result, eligibility for a clearance was denied. In another similar case the applicant has four student loans delinquent since 2014, three of which she could not provide information on that mitigated the concern.

In both cases the applicants appealed to DOHA and cited the President’s COVID-19 emergency relief measure claiming they do not have to pay back the delinquent student loans at this time, therefore the concern is mitigated. The DOHA judges in each case pointed out that the loans were delinquent for several years prior to the relief measure and has no bearing on the fact they did not act responsibly in resolving legal just debts prior to the President’s issuance. One applicant also argued her career aspirations would be impacted if she was denied a clearance. That is not something taken into consideration when reviewing eligibility for access to classified information. In both cases the clearance denials were upheld.