TS and loan Forbearance

[MunkyVsRobot]

I understand that when they do your background check they check your credit stuff, question I have is would getting my student loan put into forbearance be cause for denying me TS clearance..?

I am living paycheck to paycheck and I am getting behind on payments and I am wondering if that would be seen the same as filing bankruptcy.

[Devil1087]

Debt is like the #1 thing to can get you on that so I heard. You need intent to pay off that debt if you're in the hole

[YourPhoneIsMine]

Debt can be a factor but as long as you can explain it you have a chance. Not necessarily a good chance but it's not a disqualifying factor.

[MunkyVsRobot]

Awesome, hopefully they understand because I am going through some **** and I am flat broke.

[Kegler300]

Guideline F - Financial Considerations

18. The Concern. Failure or inability 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 information. An individual who is financially overextended is at risk of having to engage in illegal acts to generate funds. Compulsive gambling is a concern as it may lead to financial crimes including espionage. Affluence that cannot be explained by known sources of income is also a security concern. It may indicate proceeds from financially profitable criminal acts.

19. Conditions that could raise a security concern and may be disqualifying include:


(a) inability or unwillingness to satisfy debts;


(b) indebtedness caused by frivolous or irresponsible spending and the absence of any evidence of willingness or intent to pay the debt or establish a realistic plan to pay the debt.


(c) a history of not meeting financial obligations;

(d) deceptive or illegal financial practices such as embezzlement, employee theft, check fraud, income tax evasion, expense account fraud, filing deceptive loan statements, and other intentional financial breaches of trust;


(e) consistent spending beyond one's means, which may be indicated by excessive indebtedness, significant negative cash flow, high debt-to-income ratio, and/or other financial analysis;


(f) financial problems that are linked to drug abuse, alcoholism, gambling problems, or other issues of security concern.


(g) failure to file annual Federal, state, or local income tax returns as required or the fraudulent filing of the same;


(h) unexplained affluence, as shown by a lifestyle or standard of living, increase in net worth, or money transfers that cannot be explained by subject's known legal sources of income;


(i) compulsive or addictive gambling as indicated by an unsuccessful attempt to stop gambling, "chasing losses" (i.e. increasing the bets or returning another day in an effort to get even), concealment of gambling losses, borrowing money to fund gambling or pay gambling debts, family conflict or other problems caused by gambling.


20. Conditions that could mitigate security concerns include:

(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;

(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), and the individual acted responsibly under the circumstances;


(c) the person has received or is receiving counseling for the problem and/or there are clear indications that the problem is being resolved or is under control;


(d) the individual initiated a good-faith effort to repay overdue creditors or otherwise resolve debts;


(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;


(f) the affluence resulted from a legal source of income.

[thewookie]

I do not know the current "regs," but FWIW -- whatever you do, do not go bad on student loans. They will follow you forever and not paying them as agreed upon will cause way more harm then you can imagine. You can't get rid of them with personal bankruptcy -- they are like cockroaches and will be around until the end of time, or until the balance is zero.

Keep in touch with them, let them know you are struggling (they know times are tough) and then be honest with the Marine Corps.

Dealing with financial responsibilities/obligations is a big character determining factor. It will definitely hurt your clearance options if you bury your head in the sand and think they will go away.

Good luck, be smart.

[Zulu 36]

You can apply with your lender for a deferment. Right now you can apply for a financial hardship deferment if you qualify, lack of income wise.

You can get up to three years worth of deferments. HOWEVER, once you are on active duty (not in DEP) you can apply for a deferment based on that.

Note: You will still owe the money and sooner or later you will have to pay. If you go into default, forget about ever seeing an income tax refund and they can take money out of your military pay - usually about 15% per pay check.

Talk to your lender ASAP. Discuss your plans with the advisor. They can be a lot nicer than you think and can tell you exactly what proof of active duty service you will need to provide later.

You CAN still make payments while in deferment. Not a bad idea to slide $50 or so every month if you can do it. Every little bit helps.

Owing money on student loans is not a big deal when getting a security clearance as long as you are up to date and/or have a deferment in place. A default may cause you grief. In fact, the Corps may not even take you. Yes, they do check all three credit agencies if they are doing a Single-Scope Background Investigation on you for a TS clearance and student loan defaults do show up.

Here is a link that will explain it better than I can:

http://www.money-zine.com/Financial-Planning/College-Loan/Student-Loan-Deferment/

Do a little more Google work to educate yourself further then call your lender.