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Denis Poroy / AP file
A sign offers military financing at a used car lot in Oceanside, Calif. on Oct. 12, 2006. The lot is one of many businesses in downtown Oceanside that offer credit to Marines from nearby Camp Pendleton.
Nearly 36,000 active-military members who hold security clearances have recently sought urgent financial advice or aid because heavy debts and delinquent bills threatened to void their classified status, according to a nonprofit that helps troops and veterans solve money problems.
“You can lose that security clearance if you have credit or debt issues,” said John E. Pickens III, executive director of VeteransPlus. “If you lose that clearance, you can become un-promotable or you can be taken from your assignment. And, ultimately, you can even receive a bad-conduct discharge.
“If you’re going to be entrusted with national security,” he added, “the military figures you’ve got to at least be able to pay your bills on time.”
Pickens’ nonprofit has offered financial counseling to more than 150,000 current and former service members. Among that crowd of clients, more than half are active duty, National Guard members or reservists. And out of that portion, he said, 46 percent have expressed worries about their security clearances.
Approximately half of America's 2.4 million active duty, National Guard and reserve troops hold some level of security clearance, said Pentagon spokesman Lt. Col. James Gregory. Most of those 1.19 million service members possess the second-highest security rating - "secret" - while the next largest portion hold a higher status: TS/SCI, (Top Secret/Sensitive Compartmented Information), he added. The sensitive nature of certain military jobs typically dictate the security classifications.
“All military members know they are required by the Uniform Code of Military Justice to pay their debts,” Pickens said. “But right now, the Department of Defense says excessive and delinquent indebtedness is the No. 1 cause for denying or revoking security clearances.”
Asked to confirm that massive debt and late payments are, indeed, the leading factors in security-clearance terminations, Gregory said: “One reason (for concern) is that a person with big debts is more likely to accept money in exchange for revealing secrets. So that's why financial things are one of the biggest reasons that a clearance would not be granted or be revoked.
“That said,” Gregory added, “the military takes a ‘whole person’ approach. Finance is only one factor to be considered among many others when it comes to security clearances. The U.S. military pays close attention to debt and other financial issues when it comes to screening applicants for security clearance to handle sensitive information.”
Based on the financial counseling sessions provided by VeteransPlus, statistics show that service members and veterans who approach the nonprofit have an average debt-to-income ratio of 46.5 percent, Pickens said. According to “The Ultimate Credit Handbook,” by Gerri Detweiler, a debt load of 36 percent or less is healthy for most people to carry, but a ratio of 43 percent to 49 percent means that dire financial difficulties are probably imminent unless immediate action is taken.
The nonprofit’s counselors also see an average unsecured debt (such as credit cards) of $9,700 and an average secured debt (such as a home) of $16,500.
How much is too much?
“I wish I knew that number,” Pickens said. “But if you’re not paying your bills and your debt-to-income ratio is what the military would consider to be excessive, they look at you as a risk.
“Military folks are susceptible to the same kinds of pressures and economic things as everybody else,” Pickens adds. “Their spouses get laid off. They have foreclosures. The fact that they have to move around frequently means they’re often upside down on their houses when they have to sell.”
In April 1990, Derek Staden, then 19, learned he was about to be deployed from his Air Force base in Wichita, Kan., to the Middle East as the U.S. military launched Operation Desert Storm. Then a senior airman whose duties included refueling aircraft, Staden’s mailbox suddenly was flooded with offers for credit cards and high-interest loans.
“Just out of nowhere – all from creditors locally,” Staden said. “I guess they knew our base was deploying. All we had to do was endorse the checks and they would cash them for us. I was a young man and I’d never seen anything like that before. I didn’t know how the interest payments worked so I took them and took advantage of them. I bought some things I needed and things I didn’t need.”
When Staden returned to his base later in 1990, those same creditors demanded that he repay the loans or balances or they would report him to his commanding officer. He knew his security clearance would be at risk if his superiors learned of his unpaid bills. He had earned that classified status during basic training. He needed the clearance because he was involved in secret, Cold War practice drills during which he refueled aircraft.
“I had to keep those payments up to speed because the military frowns on having debt issues like that,” Staden said. “It wasn’t an option to call my parents and ask for help because they taught me growing up how to be responsible for your obligations. I didn’t want to call them to tell them I’d been duped by creditors.
“I just had to scale back, spend all my weekends in the dorms (on base). Those were some lean times for me. I was so embarrassed.”
Staden, who left the service in 1995 and now lives in New Orleans and is trying to get into the music-production business, estimates that his debt ultimately reached in the low $20,000 range.
"I felt like I didn’t have anywhere to go for help – outside of my parents. I figured if I went to the adjutant on base I would get myself in trouble,” he said. “It made me second-guess a lot of things. I thought I was more prepared for living on my own. That was probably part of the reason I didn’t re-enlist. It was very stressful.”
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Just another reason not to fight for your country. Bush did not, Cheney did not and neither did Clinton, what they all have in common is they never really served in the military where that was their only income. They stayed home, got into politics and the only dangerous thing they have ever done is avoid getting caught doing something illegal or immoral.
You fail to mention Obama?
Ok, we'll add Obama and raise you a Romney and Ryan.
Good to see you just conceded the upcoming election. America's children thank you!
Politicians, especially congress need to make special consideration for soldiers. If not stick their kids in there and watch the changes made. Scandalous at best.
Maybe some kind of loan or debt forgiveness for active veterans? Sounds interesting. It might also help the economy improve, as the vets would be free to spend more.
Try paying military members some more money. They are risking their lives for our country and get paid crap. Stop wasting money on bombers and missiles other idiotic programs and pay the troops more.
When I was in, I considered the pay and benifits to be pretty good. We all knew what we were signing up for and it was to use the bombers, missiles, and other weapon systems while defending this once great Nation!
HYPOCRITICAL BASTURDS they cause a financial disaster and then claim it is the public to be cautious of the president has gotten us into a 1 trillion dollar debt, and he has promised what to Communist China, all of our industry @$#% the son of a #%$&(
Smart
Everyone needs to realize that the U. S. Military pay is terrible to begin with. Military member have and do put their lives on the line, so that YOU (the People of The United States of America) and other blood sucking companies can feel better about yourself. It is hard for me to believe that none of the people that are giving advice have never been late on bills because you were short on money. In the end their is one bill we all pay "DEATH". And are military members face paying that bill so that you can critcize. Do something better, such as insuring that Congress/Senate and the Presidernt provide our service members with the money they deserve. More military members/veterans live on public assistance than most would believe.
Considering everyone seems to have great advice, pick up a gun and fight the battles with them not in the safety of your self-righteous home the bank ons that you are paying for.
To quote my Senior Drill Instructor, "If the Marine Corps wanted you to have a wife and children, they would be issued to you!" The problem is that most enlistees are kids right out of high school. Today's kids have been given just about everything that they want and have no appreciation of where the money came from or how is was earned by their parents. Their first taste of freedom comes after boot camp and they spend like the proverbial Drunken Sailor. They knock up the high school honey and marry her and expect to have it all (house, cars, family, cable, electricity, gas, food etc) all on E-2 pay. It never has and never will work. The military should be only for those who are single. If you join otherwise, you lose your right to bitch about your financial situation ro have anyone feel sorry for you.
Rodney, you sound just like my old high school boyfriend. Here I was dreaming of a nice military wedding (family tradition), plenty of moves, a kid or two and loving and supporting the most wonderful man and (then) soon to be the best Marine ever, and he was quoting Gunny I-forget-his-name. Ah such were the follies of youth.
I thank you for your service and I hope both you and "my" Rodney have a wonderful life, you both earned the right to have the best of everything and to be very happy.
Sierra, Thank You! Serving this country in uniform was my highest honor. To be paid for it was a bonus. I raised my family and live in a free country and I am happy and couldn't ask for more.
Actually, that line about toddlers and adults goes back decades and refers to the liberals throwing a big entitlement party (carter) then the GOP (reagan) has to come in and clean things up (high interest to kill stagflation). For which the GOP gets blamed for being buzzkills. twenty years later, everybody forgets and we do it all over again.
What big entitlements were created under the Carter administration? I never heard of this.
Let me see if I'm understanding this correctly......the average unsecured debt we are talking about here is in the $20,000 range. Our President can sign of on the OK to pay out over 7 million $ in bonuses to the clowns who drove Fannie Mae and Freddie Mac to the verge of bankruptcy but we can't pay the people who are in the military and fighting for our country and our lives, and are entrusted with our "secrets", enough money to handle paying off $20,000 in debt???? Wonder what the "clowns" did with their bonuses???? Does anyone else see something wrong with this picture??????????????????????
At 16 Trillion in debt, I think Obama's security clearance should be immediately revoked!
Excellent idea....along with any member of Congress that get behind on their bills (no pun intended)
Yeah, and it was ALL Obama.
Open your eyes hater.
It's that narrow one sided vision that got us where we are today.
Mr. Accountability, Obama is the one with his finger on the button now! Bush and the Republicans were fired for their part in the debt, by proxy, when McCain failed to win election in 2008. Now, it is time for Obama to be fired for his part and have his security clearance revoked. My Eyes Are Wide Open and I see BLAME written all over Obama and the Democrat Party!
If the average enlisted man lived the life of a REAL Priest he could live comfortably on his pay, with on base housing, mess hall food, etc. BUT if he/she is like most normal people he/she might want to get married and have a family - there are those on this seed that scream about that - to you I say FU!. While an E9 with 40 years in service gets about $87K/yr the skilled civilian with equal experience earns between $125k and $150k. Big difference until recently the civilian was less likely to get shot. So;
1. Anyone who has not served in the military STFU!
2. For those of us who has served "forgive them for they not not what they say"
3. If you can not forgive them give them a GI shower.
I too, am in debt to our troops. These National Guards, also to the reserves that defend our country. Thru no fault of their own, they were yanked away from their jobs and their families, with only the income the government provides. They were told their jobs would be waiting for them when they returned. Not so. Don't condem some one if you have never walked in their shoes. They have families to suport and feed and provide housing as well as we do. These soldiers have the right to provide for their famlies. It is the governments responsibilty to ensure their families ar taken care of. These men and woman in uniform are not provided decent medical treatment, physically or emotionally on their return from deployment. If our armed forces has 36,000 or so who have bad debts, and are afraid they will leak out vital information, the govrnment needs to bail them out, just like they did the banks, and others that they bailed out, which did nothing to help the economy, some sent their big wigs on vacation trips at the expense of us the taxpayers. The unemployment is not down, they don't include the people who can no longer draw unemployent, so don't let the govrnment fool you. They tell you what they want to hear.It is no wonder our solkeirs are commiting sucide at a high rate, they lose it and kill civilians in these countries. Then our government pays compensation to the victims, who in return will trun around and kill an Americian who is trying to help them gain freedom. Sorry mess. I was a miliary wife for 20 years, during the Koerian War and VietNam. We had to hock things to make it til payday. Vetnam was a disaster, we left their with out honor, and our men and women who lost their lives for nothing, but they were heros to us. They returned when the conflict was over to a country that had no respect for them, I remember when the POW's returned, I also remember the fall of Siagon. Our country is throwing billions and billions away in this conflict, money they could use to build up oour couontry and feed the poor and created jobs. Thank you.
Since when do the GREEDY BANKERS have a right to ruin the lives of ALL Americans, including Service Men & Women, while they get Rich, and are bailed out by TARP?
Shame on them....
Maybe they should take the US government off their trusted security list since it has high debts and trouble paying them. Of course, this could not be done. I'm just jiving. The US government got reduced from a 3 Star rating to a 2 Star rating by Standard and Poor. Standard and Poor is thinking about slashing the US government's credit worthiness down to another Star. So, that the US rating has only 1 Star to its name. There is one glitch. It hasn't affected the US government at all. Yes, other countries still trade with us no matter. Also, like personal debt there is no credit agency around to slash the US governments credit limits! So, in reality nothing has happened to the US government.
these are the troops they will use when marshall law takes place, hmmmmmmm!!!
Well I love the military and respect their service. How hard would it be to fix this?
Well I guess really nothing gets done in Washington. This is a travesty.
I'm not going to debate "personal responsibility" I have 3 sons, 2 of which are in the Air Force and we have taught all of them about being responsible. Obama is not going to "take care" of our military as I haven't seen evidence of anything he has "taken care" of, taken credit for - yes but not taken care of. That said, I find it sad that LOCAL businesses take advantage of service members then threatening to contacting the commanding officer, knowing these people are in a tough spot is just wrong.
a lot of people are in a tough spot, that dont give them the right to go racking up bills that they cant pay for. at least they have a income many americans dont have that. and if they dont like LOCAL businesses dont shop there. any business will try to get there money any way they can, calling the commander is like call debt collector.
China will again buy American bonds for they are silly .LOL.
Maybe we should pay the troops a fair wage???
It is a crime what we pay for national security. The government should wake up and put the money where it will protect us and help the troops.
but starve the middle class, anyway. who needs soidiers, anyway, when you've got Paul F'ing Ryan ?
In America, people learned to spend more than the earned and just try to pay it off later, or not. "Save first, spend what's left," should be everyone's methodology. I've done it since I was 10 years old.
I have yet to see any evidence that a soldiers financial situation, like anyone elses, is not simply the product of poor choices. On the other hand we have a republican senator who steals more in farm welfare every year than a combat soldiers makes.
It is hard to tell a young recruit going downrange not to enjoy life (wife, kids, and stuff). He might not be coming back.
Actually, this might work out well for us in the end. A starved, debt ridden military is a good way to feed a revolution and overthrow the corporations controlling america.
Eat the rich (they are tasty). Unfortunately, the 1% won't feed many.
OK, enough sarcasm... back to my meds. ;)
Our government, which is in debt literally over it's head is telling people that if they are in debt they can't have this job or that?
That's ironic.
They want to old these people accountable for their debt...
Who is going to hold our government accountable for it's debt?
Don't be a narrow minded sheep and say it was the Democrats OR the Republicans because they BOTH did it. Every person in office needs to be removed, period.
Do names like: Robert Hanson, Aldridge Ames, Timothy Geitner---ring any bells, for high ranking government employees who could be bought off and/or did not pay their taxes.
The guy in the article said his parents taught him to be responsible. Apparently they didn't teach him very well. While I realize there a predatory lenders out there the GOP auto erotic fixation on "free markets" almost guarantees that any debt instrument your thinking about signing should be shown to a lawyer before you even consider signing it. Even a lease for a car or dwelling. The lenders have $300+ an hour attorneys making sure that once you sign, your on the hook. Even if they lied to you( tort reform doesn't just apply to doctors)
Until the 2000s, it was generally assumed that if a bank was willing to lend you money, you were considered a reasonable credit risk. We had no idea about subprime loans, where the banks made money even if you lost your house.
Rather than everyone needing an attorney, we need to be able to trust lenders again. With President Obama creating the Consumer Financial Protection Bureau, at least we have some oversight of these predatory practices.