Many Americans are still struggling financially even as the effects of the recent economic downturn continue to fade, but one group that seems to be particularly shaken up by this trend are those in the military.
More than 36,000 active military members with some level of advanced security clearance recently sought some sort of financial counseling or help because they carried heavy debts that far exceeded their income, according to a report from NBC News. However, they only did so because having significant delinquent debts in the military may cause their clearance to be altered, which itself has significant impacts on service members’ careers.
“You can lose that security clearance if you have credit or debt issues,” John Pickens, executive director of the nonprofit financial service for military members VeteransPlus, told the news agency. “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, the military figures you’ve got to at least be able to pay your bills on time.”
In all, the nonprofit has helped counsel more than 150,000 current and former military members and of that group, a full 46 percent have expressed concerns that their debt would lead to changes to their security clearances, the report said. In all, about 1.2 million military members currently on active duty have some sort of security clearance and most have the second-highest classification: “secret.”
VeteransPlus has conducted studies in which it found that the typical service member it counseled carries significant balances, the report said. The average unsecured debts – usually credit card balances – total $9,700, and secured obligations – typically home, auto or student loans – amount to $16,500.
[Featured Products: Research and compare military loans at Credit.com]
Many military members may be further financially hampered by their duties when they receive orders to permanently change their stations. Because the current U.S. housing market is still in recovery mode, many may have a difficult time selling their homes on relatively short notice, but still need to pay for housing at their new station, meaning that they may be paying two mortgages as a means of maintaining their security clearance and credit standing. This, of course, can be extremely burdensome on their finances, and put other parts of their lives at risk.
Image: familymwr, via Flickr