To those thinking of getting out a big private loan

[Matt13C]

There is some great advice and perspectives in this thread. But I think a big point is being missed here. Is taking a loan out for 60-70 or 100k a wise decision knowing your first few years you may only make 20-30k? No, it is not! it would be like going to Harvard with the goal of being a social worker. It really does not matter where you get your ratings from or how much you pay, all that matters is that you have them and have the hours to qualify.

With that said I think taking a 30k loan out to fund your PPL, IR, COMM and CFI is completely doable. Yes, you will still have a loan payment but it will not be overwhelming by any extent. Sure it eats into your disposable income, but anyone who went to college or any kind of trade school and did not have mommy and daddy pay for it is dealing with it.

Borrowing money is never anyones first choice. But not everyone has the option of paying as you go. Plus, even while you are training it is possible to work. Since you have the funds to fly, you should be able to save up some to get you through the first year as an FO or a CFI if you live within your means.

 

[wrxpilot]

What make me mad is that the mortgage melt down will eventually get a bail out from the gov't. It's shame on the mortgage companies for giving adults massive variable rate mortgages that they can't afford.

Yet some how shame on young adults for accepting large student loans from student lenders.

Seriously? Come on man, it's not like they physically forced you to take the loan. You made a choice, which turned out to be a bad one. Now YOU have to deal with it. Welcome to being an adult. Same goes for the mortgage people. Just because they can't take self responsibility for their own financial actions doesn't mean it ok for others to blow it off too!

I don't mean to be harsh, but the sooner you get over blaming others for your mistakes the better of you'll feel. I do sympathize with the temptation some of you guys have with these loans. I've been there, and there are posts from me several years ago complaining how impatient I was with paying as I went. It sucked a lot of times, particularly when people that started after me had flying jobs when I was still working on my instrument rating.

Fortunately I received some good advice from people here and other places to stick it out. I have no flight training debt, and I am extremely glad I did it that way.

 

[BillErvin]

If you go to another country can they still follow you? What if you go to Canada? And then commute? Just kinda "disappear" for a while. That's a lot of money. And one hell of a payment.

How about a little thing called HONOR!! :banghead: You signed on the dotted line.

Gee, I know I said I would pay it back, but now I don't want too.

I'm not flaming the guy thats trying hard too pay things back, but this quote is why this country is in the pickle its in right now. Nobody what to take responsibility for their actions anymore.

You want a house, get one you can't afford, just use an adjustable rate with interest only option. learn to fly, sure just get a huge loan, you can't afford eat or pay rent, but hey you'll have a snappy uniform to keep you warm at night in the homeless shelter

Off soap box
Bill

Oh, and student loans are not bankruptable!! (is that a word)

 

[BillErvin]

The Haves keep having. . .

And the Have nots keep not having. . .

Love America til you die. . .

And the democrats will save the world!!! Oh God!!

Did you know 80 to 90% of the millionaires in this country are first time millionaires.
In other words, they started with nothing, worked hard, built businesses, sold businesses, etc, etc.

Go find another country that can say that, go on, I dare ya:bandit:

 

[BCTAv8r]

Was going to take out a loan for $20,000 but it seems like its a bad idea (from what I've seen by SLM and from the info on here). The industry sucks right now and I'm only 19. I'll admit that I want to get there ASAP but sometimes we have to tell our emotions to #### and think logically.

 

[jwp_145]

Was going to take out a loan for $20,000 but it seems like its a bad idea (from what I've seen by SLM and from the info on here). The industry sucks right now and I'm only 19. I'll admit that I want to get there ASAP but sometimes we have to tell our emotions to #### and think logically.

I'm interested in what four-letter swear word you were using there.

Please PM me with details.

 

[invertmast]

Like i said in my post bankruptcy is not a immediate option for student loans. Its a long, hard, and nearly impossible road.

Like i said.. i'm trying everything i can to NOT have to file bankruptcy, but at the rate i'm going now, its not looking very good. the aviation business around my mothers house is basically only Flight instructing, the Dad's house is surrounded by all the nascar teams and all in the charlotte area, but i dont have the times to get on w/ one of those groups.

The only other options i have, seeing how the loan institution has already told me numerous times "you pay the entire monthly payment, or you pay 50% of it minimum" is:
1. Move to Australia and get all my ratings transferred to CASA ratings (instrument written and flight exams), and find a job here (already been told, that i'm practically gauranteed a job w/ the times i have ANYWHERE i want in australia).
2. Change divisions at my current job to fly in a A90 or C-12 that involves 100 days on 72 day off rotations over in the "sand-box" making about $20-30k every rotation, w/ the realization their will be "people" on the ground shooting at me, and having to stay on a military base the entire time w/ little to no communication to the outside world
3. Stay where i am and stress myself out every month trying to pay living expenses, loan payments and carry on a social life (which would be nill at that time).

All my debt is with one loan company that basically wont help me out at all.. all they have done is tell me i can put a forverance (sp?) on the loan until i get out of economic hardship (max of 6 months). So i'm in the exact same boat as you.

 

[tonyw]

Max, look at it this way. If you do pay as you go and get it done by the age of 40, you'll have 25 years to fly. It's not like not doing it right now means you won't get to fly at all.

Hell, if I ever get into it, I'll probably be around 50 at the rate I'm going. I will STILL have 15 years to fly.

To me, a 15 year career is a long one. And a 25 year career is even longer.

For those of who who are thinking of taking out loans, I strongly urge you to listen to what invertmast and champcar are saying.

If you live to work, then perhaps having the debt load you're going to pick up if you go hard core is worth it.

But realize you will do nothing but eat, sleep, and go to work if you want to be able to make ends meet.

Is that a life? Not to me it isn't.

 

[Sprint100]

If you live to work, then perhaps having the debt load you're going to pick up if you go hard core is worth it.

But realize you will do nothing but eat, sleep, and go to work if you want to be able to make ends meet.

Is that a life? Not to me it isn't.

True words right thar, but nobody asks themselves what if my life, I mean job, falls from under me.

 

[WestIndian425]

For those of who who are thinking of taking out loans, I strongly urge you to listen to what invertmast and champcar are saying.

If you live to work, then perhaps having the debt load you're going to pick up if you go hard core is worth it.

But realize you will do nothing but eat, sleep, and go to work if you want to be able to make ends meet.

Is that a life? Not to me it isn't.

Add WestIndian425 to that list. It is very difficult and reorganizing the finances is a top priority. It starts with changing how we think about money and I know it's not too late to do that.

One thing I can say is that if you're honest with yourself, whoever you may be that is struggling with debt, you'll find that you're not alone and there are ways to get help. One of the things I love about my job is the fact that there are some pretty savy and wise coworkers out there who is more than happy to give you some good advice, and it pays to read.

One definition of insanity is doing the same things over and over and expecting different results.

 

[Sprint100]

Just to clear it up, I am NOT against a piloting career and don't think others are either. I just look at the career and the risk involved that it has to be done with alot of tact.

 

[Italianaviator]

1. Move to Australia and get all my ratings transferred to CASA ratings (instrument written and flight exams), and find a job here (already been told, that i'm practically gauranteed a job w/ the times i have ANYWHERE i want in australia).

Yeah but you have to look and see if there hiring over there too. I've heard its difficult to get a job over there becuase there are not that many places that need pilots and eevn fewer places that will probably be hiring.

I may be wrong though.

 

[tonyw]

Just to clear it up, I am NOT against a piloting career and don't think others are either. I just look at the career and the risk involved that it has to be done with alot of tact.

I'm not against a piloting career, either. I have decided it is not for me because of the time it would require for me to catch back up to where I am now and because I have a job I like.

However, for those of you who want it, I say go for it. But I say go for it WITHOUT INCURRING DEBT!

 

[Nihon_Ni]

i think we're avoiding the real 800 pound elephant in the room....


...why and how does higher education cost so farking much, its this morally right, and what alternatives are there.


in my opinion, a person seeking education should not have to enslave themself....

but how to actually implement that notion...i have no idea.

There was a little place called the Soviet Union that used to have a deal like this. Turns out that their notion wasn't feasible after all....

 

[BillErvin]

2. Change divisions at my current job to fly in a A90 or C-12 that involves 100 days on 72 day off rotations over in the "sand-box" making about $20-30k every rotation, w/ the realization their will be "people" on the ground shooting at me, and having to stay on a military base the entire time w/ little to no communication to the outside world

I think flying the sand box in a C-12 would be a good gig as long as you don't mind the tracer rounds. I'd jump all over that, flying around in a C12 beats driving around in a convoy.

Actually its pretty tough to hit an airplane without using up a lot of rounds, unless you got a shoulder fired SAM and even that a tough bet on a turboprop.

As far as life on a base downrange, it ain't that bad for civilian contractors, you can call home every night if you want, plus you have TV internet and snail mail. Things have changed a bit over there, unless your 11 Bullet catcher working out of an FOB

Take the money and run man, you might just like it, and you'll pay off your loans in no time. You want free of the debt or not:rawk:
By the way, thats tax free money up to about 80K a year for most folks, and thats a huge deal!!

 

[tonyw]

On the other hand, you've got places like Sweden that pay for college. So you can say well, it failed in the Soviet Union but it works just fine in Sweden.

 

[BugSmasher]

A propos to nothing, but I'd say now is about the best time ever to take on as much debt as you possibly can. Double digit inflation is just around the corner. Pay the bank back in monopoly money.

...and thus the cycle of borrowing and lending continues, and the U.S. Dollar becomes "monopoly money" around the world. While interest rates are low for those with cash liquidity or hard assets, they the few who are capable of getting a loan. Those flight training loans will not be offered as easily now. That's probably a good thing.

Borrowing money is like the "consumption" of the new millennium. Students, including those of us who aspire to become professional pilots, are in debt, so are homeowners, so are the banks that loaned us the money, and so is the United States to sovereign funds in the Middle East.

As a 30-year old, I can't conceive of entering the profession other than by paying for it with cash. Saving is the same as earning, and from reading JC, I've learned that the industry is just too fickle to be dependable. Flying to me is a passion-driven choice. But to be able to fly free of debt is to be able to fly with piece of mind. A job on the side will be a must, as well - unfortunately. Its a sad state, and borrowing is a big part of what got us here.

Isn't it nuts that less than six months ago, we were talking about pilot shortages, and 192-hour Comm/Multi new hires? Now thousand of pilots (including the ones who made it to a major, who were living the dream) are on the street. For all of us career changers and aspiring pilots, we should wait it out and save up during this downturn, so that we can fly with confidence when the cycle rebounds.:rawk:

 

[Nihon_Ni]

On the other hand, you've got places like Sweden that pay for college. So you can say well, it failed in the Soviet Union but it works just fine in Sweden.

If you call this working just fine, then I agree with you:

Sweden has some of the lowest scores worldwide in fiscal freedom and government size. The top income tax rate of 60 percent is one of the highest in the world, and total government spending equals more than half of GDP. The labor market was highly regulated, but reforms have led to a score equal to the world average in labor freedom.

Sweden has a very burdensome income tax rate and a moderate corporate tax rate. The top income tax rate is 60 percent, and the top corporate tax rate is 28 percent. Other taxes include a value-added tax (VAT) and a capital gains tax. In the most recent year, overall tax revenue as a percentage of GDP was 51.1 percent.

http://www.heritage.org/Index/country.cfm?id=Sweden

 

[doog]

1. Move to Australia and get all my ratings transferred to CASA ratings (instrument written and flight exams), and find a job here (already been told, that i'm practically gauranteed a job w/ the times i have ANYWHERE i want in australia).

Who told you that? I lived in Oz for 3 years... unless you're an Aussie citizen you have about zero chance of getting a flying job there. Firstly, no ratings are "transferable". You can get a special flight permit for the private that is restricted to day VFR... other than that you you would need to reobtain the CASA equivalent of the rest of the ratings. Also unless you're a citizen you will have a heck of a time obtaining a work visa, "pilot" is not on the list of occupations in demand... in fact, unless you're in mining or nursing, you have little chance... even with an advanced degree.

 

[Boris Badenov]

...and thus the cycle of borrowing and lending continues etc etc.

Well, I wouldn't be borrowing money to get in to flying, no. I'm not sure that was ever a great move and now it seems glaringly stupid. That said, the "cycle of borrowing and lending" is the engine of any capitalist economy. Borrowing encourages individual accomplishment and maintains competitiveness and upward (and downward) mobility. There was a system in place prior to capitalism. It was called feudalism. Let's not throw out the baby with the bathwater.

If anything, the problem with the American economy which has caused the boom/bust cycle isn't that people borrow, it's that the rules are stacked in favor of the people with lots of capital. In a more pure system, it would be a fiscal necessity to lend in order to keep the value of your captial. In our system, it's a no-brainer to lend, since if you lend and aren't paid back, the same idiot taxpayers who you're lending the money to in the first place wind up paying you back through some sort of government insurance/bailout nonsense. Also, it might be worth remembering that all that green paper we trade with is just that. Paper. Our fiat money is linked to absolutely nothing. It has value because the gummint says it does. This is the same gummint that can't, for decades on end, keep its checkbook balanced. With that in mind, is it any wonder that the nuts and bolts of finance are bleerily left behind in various insane periods of exuberance/hangover? A return to a gold or silver standard would do wonders to even out the economy. When a buck is actually worth something, it's not nearly as easy to cook the books, pump and dump, and basically keep your hand in the pocket of the proles.

That said, this is the way things work now. Only a fool would stand on some principle the powers that be are ignoring and get a plateful of dirt in return. The Fed has jacked the money supply so extraordinarily out of all reason that we're heading for stagflation no matter what Bernanke does (and give the guy a break...he inherited a boat half full of water and people are blaming him for sinking it). The system is totally corrupt. Until we can fix it (and it's going to take a lot of extreme pain to do that...both because we've been living like a high school girl with daddy's credit card and the people who sit at the top of the pyramid aren't going to willingly give up their 0 risk wealth strategy), smart money says play it. Playing it for Joe Six Pack who can't insulate himself through foreign investment or commodities means getting a hold of something with real value on credit, then paying the a-holes back in their worthless scrip when the other shoe drops.

Alas, buying gold on credit is pretty tough, at least without some sort of significant collateral. However, buying real estate isn't. If you've kept your nose halfway clean for the last two or three years, pay your bills on time, and have a job, you can probably qualify for an FHA loan. Something to think about.