How The Cancellation Of 6 Billion Dollars In Student Loan Debt Will Impact Your Security Clearance

  • Guideline F: Financial Considerations

Published: August 19, 2022

Delinquent student loan debt is a major concern that could negatively impact your security clearance if you do not take action to resolve it. Delinquent student loan debt in relation to national security clearance is governed under Guideline F, Financial Considerations in the Security Executive Agency Directive 4 (SEAD 4). Under Guideline F, the government may have security concerns related to financial irresponsibility if you have student loan debt that is in default. However, a recent preliminary settlement in a major predatory lending class action lawsuit for student loans includes approximately six (6) billion dollars in cancellation of student loan debt for approximately 200,000 class members.

The main concern with delinquent student loans revolves around the inability or unwillingness to satisfy debts. This can also include a history of not meeting financial obligations, which essentially casts doubt on the individuals’ honesty, reliability, trustworthiness and judgment. When it comes to these student loan debts, the majority of them are quite large in dollar amounts and raise red flags for security clearance adjudicators. However, one of the main mitigating conditions under Guideline F is related to conditions beyond the person’s control, including any victimization by predatory lending practices. Therefore, the question that must be asked is, “Does cancellation of your student loan debt resolve the government’s security clearance concerns?” In short, it typically does, depending on the circumstances.

In a recent case, Sweet v. Cardona, filed in the U.S. District Court for the Northern District of California, plaintiffs brought a class action lawsuit against the U.S.

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