If you’re carrying a hefty student loan balance you may have breathed a sigh of relief in hearing the White House extend the student loan deferment through August. But as we’ve already seen from some security clearance applicants, if you weren’t paying your loans pre-COVID, the deferments of today can’t help you mitigate the debts you weren’t paying yesterday.
True or False: If the student loan debt is for a child, it won’t be counted against you in a clearance investigation.
A recent security clearance denial before the Defense Office of Hearings and Appeals (DOHA) noted an individual with $123,000 in delinquent student loan accounts. In the response to his Statement of Reasons the applicant denied any responsibility for the student loans, claiming his wife was responsible for his children’s education and for paying the student loans. He noted the loans were for his son’s education, and indicated awareness of them during a security clearance interview, although he hadn’t disclosed them on the SF-86.
Yes, Your Kids’ Student Loans Will Affect You If You’re the Promissory
Around 1 in 5 parents take out student loans on behalf of their children. Parent PLUS loans are extensions of the FAFSA, but in a Parent PLUS loan only the parent is the borrower, and only the parent is responsible for the student loan. The DOHA case didn’t indicate what type of loan it was, but did note that it was a student loan held solely by the parent, on behalf of the student. When it comes to debt, the type of debt matters, the purpose of the debt matters, and whether or not the individual took any steps to mitigate the debt matters – a lot.
We see the debt blame game come up often when an individual faces security clearance denial due to financial issues. But that’s an argument that rarely holds water. Even if the debt was for your kid, or your spouse was supposed to pay for it – if it was in your name, you’re on the hook. This is why we recommend an individual request a copy of their credit report before applying for a security clearance – if you see debt there, take steps to address it before submitting the SF-86. That is the step that is key. You don’t need to have the debt paid off. But acknowledging responsibility before it and entering into a payment plan will show that you are reliable, trustworthy, and willing to take steps to address your issues.
False: Take out a student loan for your child, and you’ll need to pay.
We frequently see how spouses can make or break a clearance denial or revocation. But student loan debts are just one way your kid could be a career killer, as well. Being willing to pay for the education of your children is admirable. But just be aware that if you hit a snag and aren’t able to pay up, it could end up costing you your own career, rather than creating career opportunity for your kid.
