Are banks loaning money for flight training these days?

[ElyJs]

Airlines are furloughing now, but for those of us without any ratings, don't you think it might be a good time to start? I figure it will take 5 or 6 months to get the ratings, and then I'll spend at least a year instructing to build time. Who's to say that things won't be picking up in a year and a half or two?

I think that with everbody getting furloughed and the economy the way it is, you have a distorted view of how the next year or two will be. You have 5,000+ pilots on the streets with thousands of hours of turbine time. At my local flight school they have so many flight instructors, almost all have second jobs.

Taking out a loan to go complete flight training in a year or so right now IMO would be irresponsible. I think the industry picking back up in two years would be the best case scenario if the economy rebounds. If it does not and we have an anti-labor government elected into office than the airline industry will be in the ####ter for at least 4 years. Please don't put yourself in a position where you owe $600-$1000 in loans plus living expenses for a job with an earning potential of ~$1400/month the first few years. Your sanity is not worth it. If mom and dad or some other wealthy individual is willing to sponser you, then go for it. If you really want it that bad work full time and go fly in the evening. If you are not willing to take on the work of going to work 9-5, flying 3 or 4 times a week on top of that and putting time aside to study then you need to reconsider.

That being said I do think the airline industry will turn around and people will be hiring again. In fact I think with the increased barriers to entry that the industry could be in a good place in 6-10 years. Those that were able to stick it out through the lean times will be in the best position for those jobs. You just need to ask yourself if your willing to be punched in the head for 7 years to make that happen. Things will be different when your 30 as opposed to when you are 23. I sure don't want to be 30 years old making 30 grand a year with no financial stability or savings.

 

[Murdoughnut]

see thats the problem. too many people just want to be airline pilots, and are willing to do it for nothing. there are plenty of other jobs out there thay pay decent enough, just harder to find. but thats ok with me, that makes it slightly easier for me to find on of those jobs because i don't have to fight all the people with SJS now i can't disagree with the earning potential at the airlines, even a good regional you can top out making a decent living. maybe it is just me but i would think it would be sweet to make 150K a year, but i don't need to, so if i can make enough to support my family and live comfortably then i am happy.

In my personal opinion, I don't think anyone who isn't already in the airline industry can reasonable expect to ever make $150k a year. Too many willing to work for far, far less. Like I said, just my opinion.

 

[wheelsup]

A few guys at my company have gone over to China flying the same airplane making a after-tax adjusted $150k a year. It's around $8k a month in your bank account each month. The money is there but it's not in the US. Unfortunately.

 

[Blip16]

In my personal opinion, I don't think anyone who isn't already in the airline industry can reasonable expect to ever make $150k a year. Too many willing to work for far, far less. Like I said, just my opinion.

i never said most would get there, it was just an arbitrary number i threw out. i think most good regional scales top out around 80-100K?

 

[Customx]

Taking out a loan to go complete flight training in a year or so right now IMO would be irresponsible. I think the industry picking back up in two years would be the best case scenario if the economy rebounds. If it does not and we have an anti-labor government elected into office than the airline industry will be in the ####ter for at least 4 years.

At this rate I'll never come back to the States to start. I had planned to come back this year, but wanted to stay here in Korea to save more money. Now that the economy is going to hell and I've lost a decent amount of money due to the exchange rate, I'm debating whether or not to stay even longer. If I stay another year, I'll be able to save an additional $30,000, but the downside is that I'll be another year older (I'd be 28 if I started in March '10), there's no guarantee that oil prices will stabilize, and training costs will probably continue to increase. If costs increase, then the amount that I'm saving decreases. :banghead:

Please don't put yourself in a position where you owe $600-$1000 in loans plus living expenses for a job with an earning potential of ~$1400/month the first few years.

It's possible to pay for everything in cash, but I'd like to have a fairly large "buffer" since I will be moving from Korea and will have to buy things to get situated and set up. I will also have a wife that I will need to support while she is going to school. If I were to take out a loan, it would be around $10,000.

 

[tonyw]

Airlines are furloughing now, but for those of us without any ratings, don't you think it might be a good time to start? I figure it will take 5 or 6 months to get the ratings, and then I'll spend at least a year instructing to build time. Who's to say that things won't be picking up in a year and a half or two?

I didn't say don't start getting your ratings.

I said do what Clinton and Congress did in the 1990s.

Pay as you go.

And even if things pick up in a year or two, guess who is in front of you in the hiring line?

All the people who got furloughed.

If you want to be financially stupid and take out a $50K loan when industry you want to get in is moribund, feel free.

Just don't say nobody warned you when you can't pay off the loan and eat at the same time.

 

[Customx]

Pay as you go.

I don't really want to do this. I like living and teaching in Korea and would rather stay here and save up money and pay for everything at once.

If you want to be financially stupid and take out a $50K loan when industry you want to get in is moribund, feel free.

Just don't say nobody warned you when you can't pay off the loan and eat at the same time.

Please read my message that is right above yours. I said I can pay for everything in cash, as in not take out a loan, if I must. I would borrow no more than $10,000. The reason I came to Korea was to save $50,000, which I have already done.

 

[TXaviator]

what about the guys who took loans 3 or 4 years ago and are now not only at the bottom of the list, but also behind guys who have jet time, etc.??

was it stupid to take loans when airlines were hiring guys with wet commercials? was it stupid to make decisions based on the current situation at that time?

easy to call the other guy stupid, but none of you have a crystal ball with which to make future predictions with.

if you want to be a pilot, go do it. for me, id rather deal with loan agents on the phone and tell them to kiss-off because i dont have their money, than go to a cubicle every day to a job i hate. THAT would be the real balls-kicking pain in my life.

live for right now. its all you have.

 

[HOTDOG]

and PS -

can someone explain to me whats the deal with these financial institutions and their sillie -IE+(3 letter word) names?

sallie mae
freddie mac
fannie mae

is there some sort of reasoning for these circus clown names? ...maybe i just answered my own question...

found it!



paraphrased from http://www.stationstops.com/2008/09/08/how-fannie-mae-and-freddie-mac-got-their-names/

Wasn't Freddie Mac that guy on "Yo! MTV Raps" back in the 80s?

 

[killbilly]

I don't really want to do this. I like living and teaching in Korea and would rather stay here and save up money and pay for everything at once.

Please read my message that is right above yours. I said I can pay for everything in cash, as in not take out a loan, if I must. I would borrow no more than $10,000. The reason I came to Korea was to save $50,000, which I have already done.

I think Tony was saying "pay as you go" in terms of cash. You're both talking about the same thing.

The size of a debt is relative to your ability to pay it back. If you're making 20K per year, even a 10K loan is a pretty good sized chunk. If you're making 80K per year, it's not so bad, y'know?

CustomX - you have the luxury of options right now because you have a sizable amount of money set aside. You could actually partition that money into a couple of interest-bearing vehicles, like CDs or money market, and let that money pick up a bit of interest while you're training, because you don't HAVE to (nor, in my opinion SHOULD you) write a check for the whole amount of your training. Paying for each rating as you go gives you options and keeps you from getting completely screwed if the flight school goes under, y'know?

With the cash you've got, you could buy a NICE IFR-equipped airplane, still have money set aside for instructor and maintenance costs and build all the time you want in it. You can set aside a little money to buy some multi-time too. And, what TX Aviator said should resonate with you soundly - there are a lot of guys out there with way more time and experience that you might be competing with for a job. At least you will be able to weather the storm with that kind of nest egg, and you will be able to pick and choose and build time. No one will own you.

Then, when you reach whatever number of hours you want, you have even more options...you could freelance CFI in it, putting that plane to work as an asset. You could sell it, recovering your equity in it (which would be a LOT, especially if the market picks up) and have more cash to live on while you hunt for a job and still have a decent standard of living to offset the pitiful salaries at the entry level.

What I get most out of your posting though, is the fact that you're only 28. Trust me - you have lots of time. There are a lot of career changers that started much later than you and have done just fine. You have the golden, most enviable position right now in that you have choices, you have money, and you're smart enough to explore those options at your leisure. You're golden, man.

Pick whatever's right for you. I would LOVE to have 50K sitting around right now. I wouldn't necessarily spend it all on flight training, but I'd sleep well knowing I had the option if I wanted to.

Good luck.

 

[Sprint100]

Wasn't Freddie Mac that guy on "Yo! MTV Raps" back in the 80s?

That was Fab Five Freddy

 

[Barty]

Here's something else to keep in mind. As credit starts becoming harder to obtain, businesses in general are going to have to start lowering their prices. More than a few schools based their business and/or expanded their operations because loans were easily obtained and the rates were relatively low.

Even if someone is willing to take out a loan in this current environment, they're probably not going to be willing to borrow quite as much, which either means they'll be flying less at current rates, or the schools will have to lower their prices on their programs to suit. Of course if you're paying your own way, it has the same effect since you'll be a little more price sensitive when you're having to write the check every month. I don't see prices dropping to the levels they were at 8-10 years ago, simply because of the price of fuel and insurance, but I think there will be some downward pressure on price to keep business where it is at.

 

[aerospacepilot]

I have a really strong opinion on taking out massive amounts of debt for flight training. I was going to type up this long post about it, but I realized that just about everything that needed to be said has already been said.

my personal opinion is that it's a sad day when the country comes to a standstill because of a lack of loans. It just shows how artificially inflated our economy actually is.

Yup.

Maybe that's the problem with our banking institutions ...

"I have no degree and no real job experience, but I'd like a $70k loan to go into a profession that is laying more people off than it's hiring, and where my first few years will be spent making a fast food salary."

"Just sign here"

Exactly!

Just my 2 cents here, but I think it is absolute MADNESS to borrow the kind of money that flight training requires at rates around 10% (or higher) for the kind of job prospects you will end up with.

I believe there are only 3 reasonable options:

1) Save all the money and pay for it yourself. Might take 5 years (or more or less) depending on your current earning power. Don't have the patience? Remember, patience is a virtue. How much do you want to be a pilot anyway? Good things come to those who wait.

2) Go to a community college/university flight school where you can get federal student loans. They won't cover all of the costs, so you will still need to provide other funds, but it will help.

3) Go to the military.

Please don't finance your flight training with credit cards. You are setting yourself up for future financial disaster.

True, but I didn't get a political science degree because I wanted to work in politics - I got it because I wanted to learn how people think and form opinions. I was fortunate to find a job that coincided with this knowledge I had acquired. I went to school to learn something - finding a job was secondary.

My point was that pilot ratings do not transfer to other jobs quite so easily. Even an English degree opens up hundreds of different potential jobs. Flying pretty much opens one - and if they're not hiring, you're screwed.

Well said!

Nope.

If people want to go $50K into debt and not be able to afford both their rent and loan payments, it's not my problem.

I've tried to get through to them but they insist on pissing away their financial futures in order to get their ratings so they can qualify for a non-existent job. Airlines are furloughing. They're cutting jobs. And you want to take on debt so that you can be qualified for a job that doesn't exist?

Tell you what. Folks who want to do this just give me $1K. I'll kick you in the nads until you bleed.

It'll hurt you just as much and you'll pay $49K before interest less.

I will offer anyone the exact same offer. Good idea Tony.

 

[DE727UPS]

"Remember, patience is a virtue. How much do you want to be a pilot anyway? Good things come to those who wait."

I agree, but how do you argue with ATP and DCA ads that claim seniority is everything so you need to "get hired now". Just had this conversation at the other site.

I say seniority is important, but not at the expense of having a good background/experience level before moving up the ladder. Now, you could also say seniority is important, but not at the expense of having to declare bankruptcy.....

 

[flyinguitar]

"Remember, patience is a virtue. How much do you want to be a pilot anyway? Good things come to those who wait."

I agree, but how do you argue with ATP and DCA ads that claim seniority is everything so you need to "get hired now". Just had this conversation at the other site.

I say seniority is important, but not at the expense of having a good background/experience level before moving up the ladder. Now, you could also say seniority is important, but not at the expense of having to declare bankruptcy.....

I totally agree. And a good seniority number is definitely not worth declaring bankruptcy! (Although I do think that's a worst-case scenario.) With regards to the ATP/DCA ads, I might or might not argue with those ads depending on the situation of the student who was considering going to those schools.

All other things being equal, it is undoubtedly beneficial to get hired as soon as possible for the seniority number. When all other things are not equal, which is the case in the real world, then it becomes a question of weighing the pros/cons of each option and making the best decision you can.

Those schools certainly offer some advantages. I sure don't know how to train pilots as fast as they do. The ATP/DCA graduates I've flown/worked with have ranged in quality from poor to excellent just like the rest of the pilots I've known.

My primary objection would be drawing mainly from my personal experience. I happen to believe strongly that patience, perseverance, discipline, restraint, and conservatism are values that lead to better outcomes than haste, materialism, instant gratification, impulsiveness, and sensationalism. There's a lot in the advertising of those schools that sounds to me like the latter values rather than the former. But that doesn't mean one couldn't make the advantages work for you, while at the same time avoiding the pitfalls. And, at the risk of sounding like a broken record, one pitfall I would avoid like the plague is a large private student loan.