Loans at FSA


New Member
I just applied and was approved for the Key Alternative Loan, so I plan to start July 1 with the Private Audit class. My question is regarding the release of loan funds to me. I talked to Sylvia in the FSA Financial Aid office and she said a $60,000 loan is disbursed to the student in 3 installments of $20,000. However, I and my cosigner, are not comfortable with leaving that $40,000 for FSA to keep in their account. Is there a way to get the entire $60,000 disbursed in one lump sum at the beginning of training? Why should FSA have the right to keep the money in their account and earn interest while I am the one that is accruing interest on the loan? If anyone has had experience with the loan process at FSA, your insight would be very helpful. Thanks!

Not to worry. None of the money is disbursed to FSI. The check is sent to FSI but it will have your name on it. You cash it, then see accounting to deposit the funds in your account. It actually works in your favor, because you only accrue loan interest on the loan as it is disbursed, instead of the full amount from the beginning. If you have any further questions/concerns about this, call Sylvia again. She is very nice & knowledgeable about the whole thing.

Hi kdwilkes,

The key loan is disbursed in 2-or 3 installments, but the money is in your name from keyloan and you can give flightsafety whatever you want. I actually charge about $10,000 on my credit card (For the skymiles) and then pay the card off 30 days later while the $20,000 is where ever you want to put it. Interest rates are not good (2%) Basically FSI will give you the $20,000 check from keyloan and you can do whatever you want with it. Fhightsafety is not the one disbursing the funds and i think you could get whatever distrbution you want. The interest on the loan does not start until you cash the keyloan.

Anymore questions e-mail me
2% is not good? What loan gives you a 2% loan? Sounds good to me.

Also, to a previous poster-will you need $60,000 to go to FSA?
Hi All,

Paul - if I may, Your right, 2% would be excellent. But I think he was refering to the local bank accured interest.

And as for your second question, when I toured the school, I was quoted at 53k and thats start to finish and to add 10% for the fudge factor.

Best Regards,
I took $60,000 so the repayment term was 20 years. If you take less than $60,000, the term is only 15 years on the Key Alternative loan.

My other question is. . . What does FSA do with the money they have not disbursed to you? Why am I not allowed to take the entire $60,000 in one limp sum and do as I please with it?

Listen, FlightSafety does not get ANY of the Key Loan money until YOU give it to them! Key Bank will send three seperate checks over a period of time made out to YOU but mailed to FlightSafety. Therefore, FlightSafety doesn't do anything with the non-disbursed money, because it hasn't been disbursed yet! Once the check arrives at FSI, Sylvia calls you, you come pick it up & go to the bank of your choice & deposit it. Once it clears, you then cut a check made out to FlightSafety for the amount that you want to deposit in your account at FlightSafety. I hope that this explains the process in sufficient detail, if not call Sylvia!

Thanks for the replies. I finally understand! When I talked to the Key Bank people, and they said money was sent to FSA, I was under the assumption FSA did what they wanted with the money. Now I understand that I control when the funds are released from Key Bank and given to FSA and also that interest only accrues on those funds that were released by me. Thanks again for the replies!
Interesting. I visited the campus last year, and with my PPL they quoted me $34,000 through CIME, with another $8000 or so for a CFI and SE Comm ratings. I realize there may be some cost increases, but had hoped not to spend $60k.

I also did not want to borrow $60k just to get a 20-year repayment, because they way I understand it, the interest is computed at disbursement, and even if I funnel $10k of excess funds back to Key I will pay the computed interest on the whole amount.

How do they handle post-PPL time? My quote sheet from FSA shows 58 hours of single-engine solo time, presumably for timebuilding. If I show up with this time already (~110 hours with PPL) I wonder if this will be reduced. I also found a few strange items on the quote, like $850 for a Microsoft Lab (?) and nearly $5,000 in flight briefings. Is all this really necessary?
Most people borrow more than what they think will cost them for training for two reasons. One, it's good to have a cushion. Two, the extra money you borrow can be used for living expenses, i.e. food, rent, etc.

As far as your additional hours, that'll all get reviewed on orientation day, but don't count on having your number of hours reduced. There is a syllabus for Part 141 that is strictly adhered to, & cannot be changed. Perhaps if you went Part 61 you might be able to shave off a few hours of time building, but then you'll need more hours overall to reach the Part 61 Commercial requirement. I wouldn't fret it really, we are all at this stage of the game trying to build hours in our logbooks, & you'll just have a few more than the next guy.

The Microsoft labs are required (remember the Part 141 syllabus) & helpful if you use them like you are supposed to. It is much cheaper to learn how to hold on a VOR in the MS lab then in the Frasca or the real airplane. The flight brief time is how your instructor gets paid to talk to you before & after flights, scheduling you, etc. & you'll have a hard time getting around paying that!

$55,000 was my cost for training, living expenses and a 10% fudge factor. I took $60,000 to get the 20-year repayment because, even with the extra interest expense, it lowers the payment by $100 per month. I have a feeling that, as a flight instructor after graduation, I will be strapped for cash and need low monthly payments. Second, there is no pre-payment penalty on the loan, so I can send more than the monthly payment amount when earning more money and hopefully pay in 15 years or less.