Flight Schools offering in house financing

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Ridgeaviation

New Member
We are just opening a new school here in Florida and were considering offering in house financing for flight training(meaning we would loan students all or a portion of the cost of training in house). Just curious if anybody has heard of a similar situation at other schools? Any pros/cons I haven't thought of, apart from the obvious that some people won't pay it back....
 
If you have that much money to loan....invest it better. Seriously, the issue is that you are basically giving out an uncollaterized loan. They don't pay and there is not an awful lot you are going to do.
 
Ridgeaviation said:
We are just opening a new school here in Florida and were considering offering in house financing for flight training(meaning we would loan students all or a portion of the cost of training in house).
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If you want to throw that much money down the drain, just mail it to me.
 
Ridgeaviation said:
Well that was unanimous...... not a lot of faith that our fellow aviators will pay their bills!
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I'm not sure it's just that.

There are some built in issues that are problematic to being able to pay the money back.

The main issue is how do you pay back $100,000+ in student loans with the poverty wages ($20,000 per year) that the airlines pay their first officers once you finally get a job working for them?

The other (secret) issue is there is an 87% washout rate in the training portion of this industry. For every 100 students that start to train as a pilot only 13 of those students actually receive a private pilots license. So a student that does not complete his training, for one reason or another, can not possibly pay the loan back with earnings made from being a pilot.

Keep in mind that there are flight schools with business models that collect huge amounts upfront with the full intention of getting those students to quit or leave so that the school can charge a huge cancellation penalty or keep the unearned tution entirely. This also leaves the student on the hook for a large student loan that they can not possibly pay back.

At the very least, I would not consider student loans for anyone that does not already have their private pilot license.

Joe
 
JOEFRIDAY2 said:
I'm not sure it's just that.

There are some built in issues that are problematic to being able to pay the money back.

The main issue is how do you pay back $100,000+ in student loans with the poverty wages ($20,000 per year) that the airlines pay their first officers once you finally get a job working for them?

The other (secret) issue is there is an 87% washout rate in the training portion of this industry. For every 100 students that start to train as a pilot only 13 of those students actually receive a private pilots license. So a student that does not complete his training, for one reason or another, can not possibly pay the loan back with earnings made from being a pilot.

Keep in mind that there are flight schools with business models that collect huge amounts upfront with the full intention of getting those students to quit or leave so that the school can charge a huge cancellation penalty or keep the unearned tution entirely. This also leaves the student on the hook for a large student loan that they can not possibly pay back.

At the very least, I would not consider student loans for anyone that does not already have their private pilot license.

Joe
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I agree about 100k in loans. Reality is that it shouldn't cost half that much. We have onsite housing for free with a car here to use and have very reasonable pricing so there shouldn't be a need for anybody to go into anywhere near that amount of debt. We do an accelerated private(2-3 weeks) for instance for 6k, I was considering taking payments on a portion of that. Maybe same thing for all ratings or time build. Good point about doing it only for advanced ratings, definitely something to consider.
 
Ridgeaviation said:
I agree about 100k in loans. Reality is that it shouldn't cost half that much. We have onsite housing for free with a car here to use and have very reasonable pricing so there shouldn't be a need for anybody to go into anywhere near that amount of debt. We do an accelerated private(2-3 weeks) for instance for 6k, I was considering taking payments on a portion of that. Maybe same thing for all ratings or time build. Good point about doing it only for advanced ratings, definitely something to consider.
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There is a difference between a career pilot and someone that just wants to get his/her rating.

Having just returned from the JetCareers.com expo, I can tell you that no one there was hiring with less than 1000 hours at this time. The bigger guys were at 3000-4000 hours.

My personal belief is that this will change in the first quarter of 2011 and the numbers will be taken down to bare minimums in the regional world as the current regional pilots move up to the majors in response to the upcoming work rule changes which take effect on 08/01/2011.

This does bring me to another point that student career pilots sometimes fail to take into account.

There is no need to speed through your ratings gatherning as little time as possible. While you may get your ratings with fewer hours, you are passng up a lot of the hours that can really help you and the hours that the companies that will hire you do require.

I always tell students to not rush it and try to cut hours. Those "extra" hours you spend getting your private or instrument are some of the most valuable hours you will ever have. They also are usually the least expensive hours as well.

Joe
 
$6k for a PPL? Where can I find more info?

That includes housing with a car? How many hours, flight and ground? Books too? Checkride fee? What type of aircraft?
 
Ridgeaviation said:
I agree about 100k in loans. Reality is that it shouldn't cost half that much. We have onsite housing for free with a car here to use and have very reasonable pricing so there shouldn't be a need for anybody to go into anywhere near that amount of debt. We do an accelerated private(2-3 weeks) for instance for 6k, I was considering taking payments on a portion of that. Maybe same thing for all ratings or time build. Good point about doing it only for advanced ratings, definitely something to consider.
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2-3 weeks??? Did I read that correctly or was that supposed to be months? I simply do not see anybody getting their private license in 2-3 weeks. It took me a year and know that if you were enrolled in an accelerated program it would be much shoerter but 2-3 weeks is wayyy too soon to learn even the basics of all you need to know.
 
Italianaviator said:
2-3 weeks??? Did I read that correctly or was that supposed to be months? I simply do not see anybody getting their private license in 2-3 weeks. It took me a year and know that if you were enrolled in an accelerated program it would be much shoerter but 2-3 weeks is wayyy too soon to learn even the basics of all you need to know.
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i flew everyday for my ppl and finished in 5 weeks and exactly 40 hours. i felt like i was going quick.

2-3 weeks? that should be interesting.
 
Italianaviator said:
2-3 weeks??? Did I read that correctly or was that supposed to be months? I simply do not see anybody getting their private license in 2-3 weeks. It took me a year and know that if you were enrolled in an accelerated program it would be much shoerter but 2-3 weeks is wayyy too soon to learn even the basics of all you need to know.
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We can debate the pros and cons(there are both) of immersion training but the fact is that we have good VFR flying weather everyday and you are much more apt to retain when your training is condensed. Certainly you don't know everything but no newly minted private pilot does. It is not for everyone but a motivated student can do it. Students also come with their written out of the way. It is also worth noting that in an immersion course you live at the airport and don't have the distractions that you may at home. There is no shortcut and no way to fake a checkride but when you fly 3-4 hours a day you can definitely get it done quick. Students also have one airplane and one instructor dedicated to them.
 
Ridgeaviation said:
We can debate the pros and cons(there are both) of immersion training but the fact is that we have good VFR flying weather everyday and you are much more apt to retain when your training is condensed. Certainly you don't know everything but no newly minted private pilot does. It is not for everyone but a motivated student can do it. Students also come with their written out of the way. It is also worth noting that in an immersion course you live at the airport and don't have the distractions that you may at home. There is no shortcut and no way to fake a checkride but when you fly 3-4 hours a day you can definitely get it done quick. Students also have one airplane and one instructor dedicated to them.
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If I was instructing there, I think I could get it done. How many students have been through your program!
 
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