Sallie Mae not going to loan for aviation career training

[Sprint100]

Re: Sallie Mae not going to loan for aviation career trainin

I'm going to go out on a limb and say that this is a bad thing, not because how it will "weed anyone out" because it won't. Those people will find a way.

Yes those that are in it to win it will find a way. Those looking for that instant gratification, unrealistic expectations, and/or supposed glamour of the golden days will be weeded out.

 

[minitour]

Re: Sallie Mae not going to loan for aviation career trainin

Yes those that are in it to win it will find a way. Those looking for that instant gratification, unrealistic expectations, and/or supposed glamour of the golden days will be weeded out.

Not necessarily. As I'm sure others do, I still get credit cards once or twice a month that I'm "pre approved" for with credit limits in excess of $100k. That will be the next step if someone really wants to drop that kinda coin on it.

OT...they (CC Companies) just don't get it. There's a reason I cut my cards up a few years ago and don't carry them anymore. I'm just not interested in buying a house on a credit card. Do we really need $100k-$200k credit card limits? [/rant]

-mini

 

[surreal1221]

Re: Sallie Mae not going to loan for aviation career trainin

Says the 24 year old with all of his flight training done. How did you pay?


I'm going to go out on a limb and say that this is a bad thing, not because how it will "weed anyone out" because it won't. Those people will find a way. I know I did, I didn't have SLM loans. No, its a bad thing because if SLM loans are going bye bye, plenty more jobs are going to go bye bye because the economy's ed. Good luck. You'll need it out there.

I paid 19 grand cash, and 20 grand loan. Loan that is already down to 10k.

Your point? Or did you have one?

 

[Michael95U]

Re: Sallie Mae not going to loan for aviation career trainin

Good, for the airline industry, very bad for the flight training industry. There needs to be a good balance. It will hurt the industry if pilots cannot build time and experience as a CFI.

:yeahthat:


My thoughts are that in the future (10-15 years), the airlines will institute their own zero time to right seat training programs and do everything in house (much like some of the European and Asian airlines).

 

[juskl]

Re: Sallie Mae not going to loan for aviation career trainin

Fortunately for the school I work at, we only have 6 students with Sallie Mae, out of 80 ish students (not including tailwheel and aerobatic stuff). But I feel bad for the upcoming students that need the help. Please don't get me wrong, I don't feel anyone should be getting an 80-100 K loan for this biz. I think that 36K is the max that our students have received from them. But with us, that pretty much gets you through Ppl,Inst, Comm, Multi. Of course adding Cfi, II, etc. costs more. But payments were in the high 300's per month and not 800 (thank God).

This will hurt the larger academies that cost alot more. Or not, as it seems that alot of these schools are going to the foreign contracts anyway.

 

[Murdoughnut]

Re: Sallie Mae not going to loan for aviation career trainin

Does anyone think this may also make flight schools more competitive - lower rates, more efficient practices, etc. etc.

 

[Roger, Roger]

Re: Sallie Mae not going to loan for aviation career trainin

Does anyone think this may also make flight schools more competitive - lower rates, more efficient practices, etc. etc.

I kind of doubt it. I think any efficiency will come from schools keeping aircraft around longer rather than springing for the newest, shiniest thing every 3 years or so. Even this will only effect the big schools, the little ones are still flying the same 152s and Duchesses from the 70s and 80s. I mean if you look elsewhere, costs have been cut pretty much as low as they'll go.
Employee pay-We all know what instructors make
Maintenance-Can't cut that
Fuel-Would require buying new aircraft, may or may not pay off in the long run
And most of the big schools already use simulators as much as is practical and useful.

 

[Goonie]

Re: Sallie Mae not going to loan for aviation career trainin

Does anyone think this may also make flight schools more competitive - lower rates, more efficient practices, etc. etc.

Depends..

If the school is relying on just America customers then they dont have long before the doors get locked. IMO

The foreign market is weak but still keeping people afloat.

 

[WacoFan]

Re: Sallie Mae not going to loan for aviation career trainin

Does anyone think this may also make flight schools more competitive - lower rates, more efficient practices, etc. etc.

I can't really speak for the flight instructing business today. The business I knew very well 20 years ago wasn't exactly a cash cow. Not sure how much more "competitive" a flight school can be in terms of their costs. Perhaps some gains can be made in the efficiency area - not sure. I would imagine that the way to attract students will be to get them through in the minimum amount of time possible - getting PPL guys to the checkride in 40-50 hrs and things like that. It will force schools to be more efficient perhaps, and it will also cause students to work harder and study harder. Between the cost of the airplanes, insurance, fuel, and physical plant I am not sure how much profit the schools can play with. Lowering rates to be competitive will only work if there is good profit that can be cut into - you can only go so low. Selling lots watermellons for a nickle that you buy for dime won't allow you to make it up on volume.

 

[Sprint100]

Re: Sallie Mae not going to loan for aviation career trainin

Does anyone think this may also make flight schools more competitive - lower rates, more efficient practices, etc. etc.

If they know what's good for them, there will be immense competition amongst them all that are still standing. I can even see flight schools with an emphasis on great, gasp, customer service.

 

[Michael95U]

Re: Sallie Mae not going to loan for aviation career trainin

Does anyone think this may also make flight schools more competitive - lower rates, more efficient practices, etc. etc.

Yes, prices will have to be more competitive. You will also see far fewer new to newer aircraft on the flight line. The days of training in a 152 for your PPL are returning. That really isn't such a bad thing.

 

[surreal1221]

Re: Sallie Mae not going to loan for aviation career trainin

That'd be great.

It'd also be nice to be able to rent a basic six pack 172 again. As opposed to some overpriced 172 with G1000 and a new interior.

 

[Michael95U]

Re: Sallie Mae not going to loan for aviation career trainin

That'd be great.

It'd also be nice to be able to rent a basic six pack 172 again. As opposed to some overpriced 172 with G1000 and a new interior.

Come on over to KC. I guarantee you won't see any glass on our flight line (except for the Sandel SN3500 EHSI in the Arrow...).

 

[killbilly]

Re: Sallie Mae not going to loan for aviation career trainin

Yes, these banks taking advantage of students' dreams is on par with the mortgage meltdown considering how they loaned out huge sums of money without much consideration to payback.

I disagree.

If you read the contract and you sign on the dotted line, you're not being taken advantage of. You're agreeing to take on a debt to pay back. That's business.

I said earlier that someone would fill that market niche. Hell, if I had the capital sitting around, I'd consider getting into that business because there is a ready market of borrowers out there. Like Jeremy said, PNC is doing business right now, and since SLM folded the career loans, PNC is likely going to pick up a lot more. The question is going to be how they can assess risk; if they do it right, they'll succeed.

Money lending has got to be one of the world's top five oldest professions, and there is a reason that financing in so many forms exists. It's profitable, no matter which way you slice it.

 

[Michael95U]

Re: Sallie Mae not going to loan for aviation career trainin

Like Jeremy said, PNC is doing business right now, and since SLM folded the career loans, PNC is likely going to pick up a lot more. The question is going to be how they can assess risk; if they do it right, they'll succeed.

What you are going to continue to see is a revolving door on who is "THE" lender for flight training loans. Here is the order of the companies that our students have utilized since I started my company:

MyRichUncle
Next Student
Wachovia
Sallie Mae
__________ (TBD)

Something happens to each company that makes them realize that this type of lending can create huge problems and they stop lending to flight students. So while PNC is doing it now, I give them about a year before they stop. Then someone else will fill the void and it will go on and on. The problem is that flight schools have to go through the same BS every time to get the new lender in the door....

 

[Douglas]

Re: Sallie Mae not going to loan for aviation career trainin

Does anyone think this may also make flight schools more competitive - lower rates, more efficient practices, etc. etc.

IMO, no. We are already operating on the bottom side of things. If any business man would come and look at our profit margin, they would probably run the other way.

Our doors will close before rates go down.
If fact, I see them going up if any place besides closed.
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In my situation, this is an all around negative. My students are university students and get there certificates over a four year period, they are not looking for instant gratification. I think those comments are intended for the academy's and pilot mills.

I don't think it will effect my hobby fliers. They have already largely been squeezed out and already do pay-as-they-go.

1. I don't want to hit the streets, I am already on the bottom of the pay totem pole. When the bottom guy gets forced out, I can't imagine anything positive in the way of what people will do for hours/money.

2. I don't want to only teach people that have financial backing from a parental institution. Maybe I'm just a hopeless romantic but the dream of flight shouldn't be limited to the rich, and this is all what I see this is.

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[minitour]

Re: Sallie Mae not going to loan for aviation career trainin

Hey does anyone know if "Pilot Finance" is still shelling out money to the tune of 20%? Are they even still in the game?

-mini

 

[surreal1221]

Re: Sallie Mae not going to loan for aviation career trainin

Money lending has got to be one of the world's top five oldest professions, and there is a reason that financing in so many forms exists. It's profitable, no matter which way you slice it.

There was a reason why lending money was mentioned in Dante's Inferno.

 

[Sprint100]

Re: Sallie Mae not going to loan for aviation career trainin

I disagree.

If you read the contract and you sign on the dotted line, you're not being taken advantage of. You're agreeing to take on a debt to pay back. That's business.

By taking advantage of I mean using the emotion/dream of a home or a profession to sign for a loan that has very irresponsible payback terms. That is just stupid for the borrower and the lender. For most students they haven't had to juggle "real" money or "real" budgets, so how in the world do you expect them to come out of the gate handling a $80K or more loan making 20 grand a year if they even have a job afterwards.

 

[surreal1221]

Re: Sallie Mae not going to loan for aviation career trainin

Perhaps the problem is the fact that home ownership and professional training should not be consider a dream.

If you're dumb enough to "fall" for the dream, and thus fall for the marketing gimmicks, you have received what you desired.

Sucks, but why are we going to continue the false propping up of ridiculous hopes and dreams when reality tells us otherwise?