diff --git a/awx/main/models/mixins.py b/awx/main/models/mixins.py
index fcd4f9a334..184b4c7899 100644
--- a/awx/main/models/mixins.py
+++ b/awx/main/models/mixins.py
@@ -188,8 +188,14 @@ class SurveyJobTemplateMixin(models.Model):
                             runtime_extra_vars.pop(variable_key)
 
                 if default is not None:
-                    # do not add variables that contain an empty string, are not required and are nor present in extra_vars
-                    if default == '' and not survey_element.get('required') and variable_key not in runtime_extra_vars:
+                    # do not add variables that contain an empty string, are not required and are not present in extra_vars
+                    # password fields must be skipped, because default values have special behaviour
+                    if (
+                        default == ''
+                        and not survey_element.get('required')
+                        and survey_element.get('type') != 'password'
+                        and variable_key not in runtime_extra_vars
+                    ):
                         continue
 
                     decrypted_default = default