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The current rate at Student Loan Xpress (isn't that the outfit SSH uses?) for someone with "excellent" credit is 10.64%. Plus a 2% loan origination fee. OUCH!

 

http://www.studentloanxpress.com/student-l...press-loan.html

 

So if a student borrows $70k and defers the interest for 18 months, when he starts paying on the 20 year loan the monthly payments will be about $820.

 

That's $196,800.

 

Does that seem like an awful lot of money to anyone else?

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The current rate at Student Loan Xpress (isn't that the outfit SSH uses?) for someone with "excellent" credit is 10.64%. Plus a 2% loan origination fee. OUCH!

 

http://www.studentloanxpress.com/student-l...press-loan.html

 

So if a student borrows $70k and defers the interest for 18 months, when he starts paying on the 20 year loan the monthly payments will be about $820.

 

That's $196,800.

 

Does that seem like an awful lot of money to anyone else?

 

 

You would be better off buying a house, and go get a job and make the $15 an hour somewhere else. Once you become a multi millionaire, then you can take lessons and change jobs during your mid life crisis in about 20 years..and I'm really not kidding.

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Hell yes it does. Especially for someone about to jump into the game ;)

 

I really need to get a grip on how this whole interest thing works with big loans like this. How does it become that much money when 12.64% of 70,000 is 8,848? I don't understand the part where it goes from owing $78,848 into $196,800. Is the interest compounded month after month after month or what?

 

Say your loan balance is $78,848 after the initial 12.64% interest charge... the next month does it charge the interest rate again? Therefore making it $88,814? I thought interest was just a one time thing on a loan. Or is it the deferrment of payments that causes the loan to have it's interest rate charged upon it again?

 

Forgive me for my ignorance but I am in the Army for one. For two I'm a grunt. For three the last time I was in school it was high school 7 years ago. And lastly because the only loans I have taken out have been small time loans of 5k or less. Those loans didn't work whatever way apparently these loans work.

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Is the interest compounded month after month after month or what?

 

 

 

And such is the magic of amortization!

 

OK, go to google and type in "loan payment calculator". There are hundreds of them there that will show you close to your real costs in obtaining the loan. The figures that Fry listed are very close to reality. It doesnt matter that you don't understand why, just understand this is the way it works !

 

Now, go back to my original response. What other job out there would you spend 70K to get training just so you can make maybe $15 an hour ( remember even CFI's only get paid when they are flying/teaching). I guess if your lucky after a few years and a few job changes you could almost make a living at flying.

 

Yes, I love to fly, I can see the attraction to wanting to do it everyday. But when a guy that cleans toilets makes more than a helo pilot with 70K( 200K if you borrow the money) invested, I don't think you can justify that investment. Now getting your MD degree, or law school, or teaching credential...those are jobs that will payback the dollars invested in education a whole lot faster.

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I really need to get a grip on how this whole interest thing works with big loans like this. How does it become that much money when 12.64% of 70,000 is 8,848? I don't understand the part where it goes from owing $78,848 into $196,800. Is the interest compounded month after month after month or what?

 

Say your loan balance is $78,848 after the initial 12.64% interest charge... the next month does it charge the interest rate again? Therefore making it $88,814? I thought interest was just a one time thing on a loan. Or is it the deferrment of payments that causes the loan to have it's interest rate charged upon it again?

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Thanks for the tips on loan calculators.

 

From what it seems I guess there is a monthly payment set up, but what you pay toward the principal is all that counts. What a joke. I wonder why small signature loans don't do this?

 

Here's some good news-

 

"It is estimated that you will need an annual salary of at least $96,266.40 to be able to afford to repay this loan. This estimate assumes that 10% of your gross monthly income will be devoted to repaying your student loans. If you use 15% of your gross monthly income to repay the loan, you will need an annual salary of only $64,177.60 , but you may experience some financial difficulty.

 

Using a loan term of 20 years instead of standard 10-year repayment reduces the monthly loan payment by $228.14 (22.1%), but increases the total interest paid by $68,886.19 (128.4%). "

 

^^ From www.finaid.org

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Whoops wrong button (former Marine...what can I say).

 

Anyway, say you borrow $70k from SSH's lender to "live your dream" (And yeah, yeah I know...SSH doesn't take it all immediately. But the loan draws are close enough to being "upfront" that the total cost isn't much different.).

 

Add 2 points (2%) as soon as you get the loan for the "loan origination fee" and your loan amount is $71,400 right out the gate.

 

If you defer that $71.4 for 18 months at 10.64%, each month interest is added to the loan. It starts out at $633 a month but that monthly interest amount increases each month as interest accrues on interest. When you're ready to beging making payments at the end of 18 months the total loan amount is going to be $83,398.

 

The monthly payments to pay that off over twenty years will be $840. That's a total cost of $201,600 ($840x240 payments).

 

The reason it costs sooo much is the interest at 10.64%. That's freakin expensive money. The first monthly payment you make has $740 of that $840 payment going to interest. The principal amount is only reduced by a hundred bucks. In the second month the interest charge is $738.50...principal reduced by $101.50. Get the picture? It takes a long time to whittle down the principal when most of your payments are just paying the carrying charge on the money (the interest).

 

And here's the really ugly part. If you don't go on to a paying career as a helo pilot you've paid two hundred grand for A PRIVATE PILOT'S LICENSE.

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I went through the whole idea of getting a loan and paying it back etc. I realised early on that it was near stupidity to take out a loan that i knew i wouldnt be able to pay back for 20 years.

 

I decided that i will go to college, get my national diploma and do my ppl in the summer (2007). After this i have a job offer already working on the apache simulators here in the UK.

 

So at the moment im just doing my best to overcome my impaitence to start flying :rolleyes:

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Fry-

 

Thanks for the info.

 

That's a damn shame, I tell you. I guess this whole time I've remained ignorant since I haven't yet had to step into a loan of this caliber. Truth be told when I signed up I thought the GI Bill would pay for most of my education... little did I know at the time the joy of flying in helos. I still want to do it, badly. Even facing all of this.

 

This is a complete crock of b.s. for all helo pilots out there. It of course brings my attention immediately to the PHI strike and lends even more sympathy to the pilots' cause.

 

On a more personal note- I cast the possibility of SSH out the window the minute I did research on their program. When I did a google for "Silver State Helicopters" and the first two things that popped up besides their site itself were "The Silver State Truth" and coincidentally a thread on this forum mentioning their law suits... well, you can say it threw up a big red flag.

 

So from here it begs the question- what is a man to do? Personally I've decided on paying my PPL out of pocket with money I have saved, and then using a combined GI Bill/loan to pay off the rest. I've also considered possibly starting a career in law enforcement and working on the CFII on the side so I don't take such a huge hit in the pocket book caused by a loan. With the way this looks it might be smarter to delay the whole deal and pay more out of pocket. Since I haven't seen an entry level pilot's job at anything higher than 25-35k w/o 1000+ hrs.

 

There's got to be a smarter answer out there. Salli Mae I assume is along the same lines as this other loan, correct?

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Jack- My first thought is...you are in the best aviation training facility in the world now. The US military. There isnt any way you can sign back up and get into some form of aviation?

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Goldy-

 

It's an option for sure. I could re-up, drop my warrant packet, and owe the army 6 more years of my life. Not to mention the fact that probably at least 2 more of that will be spent here in Iraq.

 

I've considered it. At one time I was halfway through the process. I stopped, though. The Army is a tough thing to be in, especially right now. Once you've spent a year plus away from your family, received dear john letters from your girlfriend back home, and been blown up and shot at for some reason re-enlistment seems much less enticing (even with a 23k bonus) haha.

 

A guy I know was recently recalled into the service after he separated. I wonder if the same will happen to me. Especially now that the brass estimates at least 2010 for troop drawdowns. So I've thought since I'll be coming back to this bitch anyway I might as well go air national guard and try to be a pilot or something. I'm just not sure on the possibility of joining the NG or the ANG after being active duty. I'm not sure whether or not they'd allow me to be a helo pilot. I still plan on looking into it.

 

I'm just real bitter on the military right now considering that my unit was extended for the second time, I've passed my ETS date already, and with the job I do in the Army it's not a question of "if the next bullet, RPG or IED comes your way" it's a question of when. So for these extra months I've got to spend over here I already don't even know what my chances of making it back are. I just don't know if I feel like dealing with that for at least 6 more years.

 

Thanks for all the info, though. Don't take this post as a bashing against the military, either... I'm proud to be a part of what I'm a part of... it's just.... tough... at times.

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Jackelope- First let me say that anyone in the military deserves and has my personal deepest thanks and appreciation. Anyone who is currently serving active duty, especially overseas I am truly in awe of. I have several friends over there as well and I hear what they go thru each day.

 

That being said, right now you probably would get sent back in for another couple years regardless if you re-enlist...so does it make more sense to do it on your own and have more say what you do???? Only, of course, if you could get some aircraft time...maybe it wouldnt be rotor time, anything is a huge head start. If you were going to spend 200K for your commercial license over the next 20 years...thats the same as making an extra 33K per year for the 6 years plus your base pay and benefits..

 

Again, I dont know how you guys/gals do it...but never think for a second it goes unappreciated from stateside. Stay safe.

 

Goldy

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Well I appreciate the words. I'm not gonna talk on it too much.. unless you want to PM about the whole deal. You're definitely right about some of the stuff, though. I guess maybe I should contact some NG or ANG recruiters and see what my options are. It'd be nice to spend some time behind the sticks of AH-64s, OH-58's, or even UH-60s. Just not over here. Ha ha.

 

Anyway I don't intend to hijack fry's thread anymore than I've already done (apologies, fry)

 

About this whole loan deal... it's good to have an eye opener on the costs of everything. Still, if flying is what you want to do, and if you are absolutely set on it- is spending 200k going to hold people back? It'd be nice to hear from some people currently in careers paying off the loans to see how they're affording it all. I don't assume this ridiculousness of price is a recent trend or anything.

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Well I been saying that taking out loans for flight training is not the thing to do, now you know why. The kind of income you need to service one of these loans is no where close to the kind of money pilots make at least not starting out and it takes a good 15 years at PHI to get to the 90K level. But you gotta live the dream. Well its doable, but its going to take time and effort on your part. First the GI Bill will pay about 60% of the bill after a Private Pilot Certificate, Ok you are going to need that amount and 40 cents on every dollar it takes you to get to CFII, thats doable too. What you do is find a good job, and start saving and I mean saving. Drive Pizza at night and on the week ends, I friend of mine paid for his Cessna 180 on floats this way and an A+P. Tought it out for two or three years, you aready know about the tough stuff. The helicopters an the jobs will still be around for you. Not having to service a mountian of debt is the best thing you can do for yourself and family. You service to the nation is appreciatated. In the end, some body is going to ask you how you got thru flight school, and you can say that I used the GI bill and worked a couple of jobs for a couple of years for the rest. I have no flight school debt. That counts for a lot too.

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Well I been saying that taking out loans for flight training is not the thing to do, now you know why. The kind of income you need to service one of these loans is no where close to the kind of money pilots make at least not starting out and it takes a good 15 years at PHI to get to the 90K level. But you gotta live the dream. Well its doable, but its going to take time and effort on your part. First the GI Bill will pay about 60% of the bill after a Private Pilot Certificate, Ok you are going to need that amount and 40 cents on every dollar it takes you to get to CFII, thats doable too. What you do is find a good job, and start saving and I mean saving. Drive Pizza at night and on the week ends, I friend of mine paid for his Cessna 180 on floats this way and an A+P. Tought it out for two or three years, you aready know about the tough stuff. The helicopters an the jobs will still be around for you. Not having to service a mountian of debt is the best thing you can do for yourself and family. You service to the nation is appreciatated. In the end, some body is going to ask you how you got thru flight school, and you can say that I used the GI bill and worked a couple of jobs for a couple of years for the rest. I have no flight school debt. That counts for a lot too.

Exactly.

 

This is how im doing it. Im working in the back of a shop for 2 hours before college, and then working in the shop all day saturday. Im looking to extend this or get an evening job but im bogged down in college work at the moment. I cant think of a better situation than to have done a ppl and then be able to spend my money on flying and not on debts.

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Flight training loans

 

The school I attended advertised that there are no loan fees or interest on the loan until six months after you graduate from UVSC which is how we were able to get the loan in the first place. Anyway, the school supposedly has nothing to do with the interest or fees with the loan. They also advertised that they can get you your license (within six months). They had to change that since more than 90% of their students did not finish within that time due to poor instruction. This was a way for the school to take the students money quicker. The school says that at the end of six months you will have all of your ratings upto cfii and earning $20.00 an hour or more. This is difficult to pass up until five months later when the student is out of money. That is when you only have your ppl and the school asks for more money, $20,000. They spend all that in three months right when you are ready to get your cfii. That is when they ask for $7,500 to get your cfii which you need in order to work for them.

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But now consider this:

 

SSH grads earn at least a hundred grand to start, so what's the big deal about 12%? Don't worry, YOU'LL BE A PROFESSIONALLY TRAINED HELICOPTER PILOT. That kind of chump change can be paid down in a year - probably less with the great bonuses.

 

and to quote a colleague, 'I gotsta pays mys ways and takes my chances'.

 

At 12%, I think I'd rather...

 

-WATCH FOR THE WIRES-

 

 

BTW FRY, nice job.

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  • 8 months later...
Wouldn't a $200k helicopter loan be cheaper? Buy the helicopter hire an instructor, get your ratings, and build your time. Sell it when you are done. :rolleyes:

 

rw

My brainstorming led me to this:

 

Take the 70K, quoted by some schools, out of the house equity and buy a good late model air conditioned Bobcat and basic attachments. Cater to a few selected construction and landscaper contractors. They are always looking for reliable subs.

Build up an account balance enough to enter pay as you go flight school, maintaining the balance with more Bobcat work as needed.

 

Sell Bobcat at the end, or who knows, buy more if business is really good.

 

ow :rolleyes:

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Just to follow up the point of how expensive this is...

 

$840 a month is indeed a lot of money, however look at this another way...

 

Lets say you are currently earning $40K a year... You take out this loan, change careers, and now you're earning $60K a year in the GOM (Per Deim, Flight Pay, and Offshore bonuses make that about 1st year pay, not counting any over time).

 

So now you're earning $20K a year more than you were... $840 a month is $10K a year... Half of the increase in your pay. Explain to me again how that is so hard to afford?

 

As a further side note, overtime in the GOM is between $400 & $600 a day depending on the company... So you do 2 days of workover a month and make double payments... The loan is paid off in 6.5 years and the total payments are reduced from over $200K to $110K.

 

Yes, you do actually have to work hard for it, however that is not totally unreasonable if this is what you really want to do... I still wouldn't go to Silver State, they deserve their reputation, however almost any other school would be just fine.

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Jehh...

 

Sounds all good, and not that hard, but a few points to think about:

 

1: You will have the loan while training as well, interest will at least have to be paid, so that means a minimum of $525/month while in flight school ($70K at 9% - if you are lucky enough to get that rate - $700/month at 12%)

 

2: You will NOT get a $60,000 a year job right out of flight school (probably not the first 2-3 years), you are more realistically looking at a $20,000 paycut if you had a $40,000 job to start with.

 

3: WHEN/IF you start making $60,000 a year, Uncle Sam still wants his share (say 25% or so) so your $20,000 dollar increase in wages is really just a $15,000 increase.

 

The loan is not a big problem to pay back in the scenario that you gave, but most people have to go through 2-3 years of instructing where you MIGHT earn enough money for your rent, utilities, insurance, phone, car and some food here and there, not nearly enough to make $840 a month payments. This is important for people to know before they go into training so they have a plan of how to "finance" those 2-4 years as well. Most people think about being a pilot as a lucrative career, it really isn't, at least not the first few years!!!

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