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Financing Flight Training


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I'm curious how people are paying for their flight training these days. Given the cost, it seems most people finance the training. Unless of course you just happen to have $50K sitting around burning a hole in your pocket. :D

 

Who are you using for your financing, are you happy with them, etc.?

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Key Aviation Loan, great so far, but since a certain company sucked a lot of student funds and no refunds when they drop out, Key does not do Aviation Loans any more. This has created a small problem for me. Now I have to find another source for me to use when I get closer to finishing up my training.

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Key Aviation Loan, great so far, but since a certain company sucked a lot of student funds and no refunds when they drop out, Key does not do Aviation Loans any more. This has created a small problem for me. Now I have to find another source for me to use when I get closer to finishing up my training.

Sallie Mae was the only feasible option for me.The customer service phone line is a joke,if you ask a hard question they hang up?? 7 times,maybe just really bad luck.

I borrowed $15000 first then tried to borrow $30000 but was denied even though the pleasant lady at customer service told me that with an income of 100k and good credit I would be sweet?.Luckily am able to rustle up a co-signer.I would recommend to anyone to make certain all funds are available,then make sure all the funds are available!

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Didn't finance, but a number of my students have gotten loans from dear aunt Sallie Mae. Seems to work, and the dispersments are reasonable.

 

I have another student who went through Pilot Finance. I don't know enough about them to comment.

 

From what I have seen, Sallie Mae, and student aid from UVSC are the most popular...

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I'm curious how people are paying for their flight training these days. Given the cost, it seems most people finance the training. Unless of course you just happen to have $50K sitting around burning a hole in your pocket. :D

 

Who are you using for your financing, are you happy with them, etc.?

 

When you think about financing career training think in terms of total cost, more like $100K with interest.

 

Sallie Mae is the most used source and probably the only financing you will be able to get through them is their career training private loan (unless you go through a college program). The current base rate on that type of loan is a minimum of 8.25% if you (or your co-signor) have "excellent" credit. It only gets worse from there. The base rate increases two more points, to 10.25%, and three points in fees if your (or your co-signor's) credit is only "good". Add another point to either base rate if you want to defer the payments while you are in training.

 

So, to borrow $50K for 200 flight hours of training at the very best rate will cost $485 a month or $87K over fifteen years.

 

If you defer the payments for 18 months the monthly payments go to about $585...$105K total.

 

Say, God forbid, you only have "good" credit, that you add the fees to the loan amount and you defer for 18 months...your monthly payments will be $693 and the total, $124K.

 

And those loans are variable rate arrangements and the rates shown are based on the prime rate that existed in July. The prime has gone up since then and it is likely to go up again over the course of your 15 year loan.

 

Finally, that cost is for the basic minimum of 200 flight hours...if you need more to get your CFI or if that first job requires more (possibily 300 to meet the school's insurance requirements) the cost goes up considerably.

 

That's $124K to get training that is good for only one kind of employment, a helicopter pilot. If you don't eventually get that job the money is wasted. A job where you will probably have to live in Louisiana and have top-end earnings...after years of crappy earnings...that are barely at the US average.

 

You better really want it.

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  • 2 weeks later...

Hello All,

In terms of financing, I too looked into the finance options. It wasn't a pretty picture. So far, I have regulated myself to look at the overall helicopter training in modules. I am going to pay for my private rating out of pocket. Then, when the commercial rating becomes a viable option, I will look into most likely financing that. The reason I chose this has more to do with setting personal priorities, keeping overall costs to a minimum, and more importantly the tax considerations. I talked to my tax gal and was informed that training costs for school or even career training and associated interest paid on loans for that training is tax deductable. Now, it may not sound like much, but you can on average deduct up to 7k per year for schooling and/or professional development. Expenses do include interest paid on loans to receive this training. It might be a good idea to ask your tax preparer for your state.

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I talked to my tax gal and was informed that training costs for school or even career training and associated interest paid on loans for that training is tax deductable. Now, it may not sound like much, but you can on average deduct up to 7k per year for schooling and/or professional development. Expenses do include interest paid on loans to receive this training. It might be a good idea to ask your tax preparer for your state.

 

Only deductible after you get your CPL.

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