Student Loan to finish ratings - 18 yr

[Alaskaairlines]

Hello guys!

I am at the point were I would like to get my Instrument/Comm/Multi in the next 5-6 months. The question is: I don't know if I will be able to make enough money to pay for it all by October?

What are the ups and downs of a student loan, what are the payments like, what is a good interest rate? My friend tells me don't sacrifice time and go ahead and get a loan for training - it will pay off!

Would you all be gratful to give me your input and advice? I really am trying to decide.

BTW, I am paying $115 dual for the 172 for my INST/COMM and will be paying about $180 for the Multi, at that rate any idea at about how much I would spend.....and I am one of those who catches on at a normal pace..


Anyways any info that will help out is appreciated!!

Thanks guys and gals!

 

[KATL8R26L]

LOAN

First do your figures count paying for the instructor ??

I racked up some bill when it came to multi flying, the average lesson runs around any where between $275.00 equaling around 1.3 in time to $359.00 for 1.9 with no ground.

Student loan pro and con if you can find a good paying job in another field, and do your training at night then you wont go through the loan money so fast, flying at least 3 days a week = at least a part time student, giving you time to pay off other things.

 

[KickSave]

I am about 2/3's of the way into a $40K student loan to get all my ratings. The benefit is the speed you complete everything, not having to wait til payday to take another lesson. Also, you waste less money by flying every day, not having to re-do lessons because they were so long ago.

The only problem I have is that I am a little discouraged by the very recent events that has lead my flight school to stop hiring. I was promised a job there when I started, when I started my Instrument, Commercial and even as recently as 2 months ago. But several other students were hired on as CFI's right before I was, and with enrollment down, and the senior CFI's not moving on to the next level at and decent rate, there just isn't a place for me and there is now a waiting list of CFI's ahead of me who will have to be given first crack at whatever jobs do open up.

So instead of having a regular CFI job racking up 750 plus hours a year, I'm going to be self employed and struggling to build time, and pay the rent. I know the options out there, such as looking at other flight schools, even in other areas, but I'm facing the reality that I'll probably have to get a regular job and flight instruct in my spare time. Although I don't regret for a minute the decision to get into flying as a new career (I'm 35 and single, so this was a mid life decision for me), I wish now I had done it a little differently. With the loan being about $40K, and the payments over 15 years at 5% or so looking like $330 a month, bein a self employed CFI in a down market isn't what I had in mind. In hindsight, I might have considered a pay as you go method instead. I still want to be prepared for when the hiring resumes, but I'm not sure racing to get my ratings, then sitting around and getting 10 hours a month, would have been any different than getting the ratings slower and building more time when my school starts hiring again in a year or so.

My advice is to think long and hard about the two choices and ask yourself what will happen if:
A) You find yourself not instructing full time and paying the loan back?
B) You get your ratings more slowly and get hired by that regional one or two years later than you could have, but you have no debt?

I guess it depends a lot on your age?


In hindsight, I still want to fly for a living, but I would have been more cautious about financially leveraging myself so deeply into an industry that is slowing down. I still intend to work my tail off to get customers and build my hours, but I am realistic about where I'll be in 2 years. Picture yourself in two years, given ALL the possibilities, and ask which scenario you would most like to be in.

Good luck.

/Dave

PS If you do decide to get a loan, Key Bank will give student pilots big loans, (up to $75K) and a rate between 4 and 6% will be a good one these days. Rates are as low as ever, but the payments will still depend on your term and total loan amount.

 

[Alaskaairlines]

Hey thanks guys!

Well my situtation is not desperate...........I am only 18 and just starting college.......I work for a Regional Airline and as I hear they may need more pilots by the end of the year, and they first look at there own employees before going public, and yes they hire with bare mins.......

I can accomplish my flying quickly if I have the instant money, but I still can fly 2-3 days a week with my monthly income...........so what would your advice be in this senario?

$115 an hour is with instructor and C172 - and $180 w/instructor for travelair I beleive.

Anyways any other input would be great!

 

[RedheadCFI]

Ok, .. here is my 2 cents take it for what it is worth.

I jumped in and got all my ratings via a part 141 school using brand new aircraft. I did not recieve any financial assistance from my parents so I was on my own to finance everything. I used a Key Alternative Loan. I did all my ratings in 7 months from zero time to CFI and also flew 100hrs in brand new seminoles w/air conditioning. I am currently finishing my aviation management degree which I am using Key to finance. Basically if you check the interest rates right now being a dependant from your parents you can get a loan for almost no interest due to our awesome economic status. Another advantage of using a loan to get this kind of money is deferred payments (you don't have to pay until you're working) and it is based off of non-compouding interest (the interest per year is not starting to pile). So, basically until I am totally done w/school and land that career job I won't have to start paying on the loan. ALSO, they give you like a 12month grace period after you get hired. So.. basically in my situation I will do my internship and then continue taking "on-line study courses" to defer the student loan. End note being, I can defer my payments as long as I'm "in-school" and a 12 months after the date I'm done "taking classes" With interest rates this low right now you would be stupid not to finance it. Save those greenbacks, put them in the stock market and make your money work for you or have your parents do it if you are clueless. Take that $15,000 you're going to piss away on ratings and use it better. Oh.. and the idea of doing your ratings as a night job is fun and sounds good on paper however, remember this.. the sooner you get your ratings the sooner you build hours. If you get that CFI and work as a CFI non stop you will be getting lots of hours during the whole time that you would normally still be trying to struggle through ratings and studying late night and all that fun full time job part time student BS. Trust me, I have been there man.. it works better if you go balls out at it.

By the way, lose the dream that the "regional" airline is going to hire you at 250 hours. Maybe if you get the blessing of god sure,. but don't forget no matter how thick your kneepads may be there are still insurance minimums that must be met. If they "promise" you a job get that in writing because I know a lot of guys I flight instruct with that were "promised" a job with a regional... until you get a signed contract with them don't even dream of it. From my limited experience once you get your COMM ASEL or AMEL ticket you're basically getting signed off to be un-employed or eating ramen noodles teaching guys how to fly for the next 2 years. There are probably 200 other ramp agents w/CFI's and 4 year degrees in your "regional" waiting to get that "inside pick-up"

I'm not putting you down man or saying that you should look negatively on the career. Hell, if it takes you twice as long as everyone else to get that airline job you'll still be 5 years younger than most of the guys getting hired in. All I'm saying is focus on the training and getting it done as soon as possible. Oh, and spend the extra money to build flight time and PIC time in the twin, don't do commercial cross countries in the single even if that means getting a private multi-rating. Sure, it'll cost more now but later when you're striving, begging, and cheating for twin time you'll look back and go thank god. Alright I'm done ranting and raving if you have any questions man toss them my way. I work for a good size flight program at a university and I hear lots of career ideas and battle plans to get there so feel free to ask any questions.
Good luck with everything,
-Nick

 

[KickSave]

Hey thanks guys!

Well my situtation is not desperate...........I am only 18 and just starting college.......I work for a Regional Airline and as I hear they may need more pilots by the end of the year, and they first look at there own employees before going public, and yes they hire with bare mins.......

I can accomplish my flying quickly if I have the instant money, but I still can fly 2-3 days a week with my monthly income...........so what would your advice be in this senario?

$115 an hour is with instructor and C172 - and $180 w/instructor for travelair I beleive.

Anyways any other input would be great!

Couple of thoughts. If you're only 18, then getting hired right away isn't likely anyway, since you'll still need to get that degree. If you can fly 2-3 times a week on your current income, then you can fly 5-6 times a week without borrowing as much money. You will definitely get your ratings faster if you fly every day, but believe me, staying out of debt when you are about to take a very low paying job for the next several years isn't a bad idea either. If it were me, I'd get the ratings as fast as possible, but pay for as much as I can myself. Even when that Regional does finally hire you, it will be several years before you start making really good money. The less overall debt, the better your life will be then.

I know the Key Loan that RedheadCFI talked about works very well, I have one myself. You can borrow a ton, but only really borrow what you used - in other words, take out a $40K loan, use just $20K and return the rest if you don't need it. I would also advise you NOT to borrow money just to build time. Let your students pay for your twin time and all those single hours. Most important is to get with a good school that will provide you a steady flow of students to build the time quickly. Getting the ratings in 7 months vs in 12 months isn't the difference between making 747 captain when you're 50 years old. Having a full schedule of students to teach once you have the ratings is the key to getting that first job more quickly.

/Dave

 

[bobbysamd]

Sallie Mae and Stafford loans

I heard this morning on NPR that interest rates for Stafford loans has plunged drastically. Maybe that would be a choice for you, although you might have to attend a 141 school. Here's a link to the story.

Here's a link to Stafford loans.

I must second the above comments about being hired by an airline at 250 hours - even with the blessing of G-d. Except for MAPD and foreign airlines with their own training programs, no one is hired to fly for airlines at 250 hours. There are more experienced pilots available. You do have your foot in the door because of your job, though. If you can keep your job and build a track while finishing college and your ratings, and then find something to build experience, you might have an advantage over street applicants.

Good luck with your plans.

 

[Alaskaairlines]

Thanks guys!

Nick, really appreciated the indepth reply!

TO clear things up, the place I work at DOES hire rampers with 300TT and like 10 Multi............yes, you will be in rt seat of a Twin Otter -- but thats still Twin Turbine time. I have lots of buddies who are now flying the Otters and they got on with about 300tt and about 10-15 multi, yes it sounds extreme, but thats the way this airline functions. The reason they do that is after having the new hire employed on the ramp for sometime (varies, about 1 yr), they can make a decision about his abilitles.........if he can't handle the ramp atmosphere, then definately not the airplane.........and so far its worked great. I think only 1 guy has ever washed out of training.

So any replys on this side now?

 

[RedheadCFI]

Reply:

Yeah I definately have a reply. If you would please PM me the name of the airline and the name of a hiring officer that I can reference you to. I'm sure they'll be happy to pick up a 500 hour pilot if I work for a few weeks on the ramp. Seriously, if your regional does any kind of internships could you please send me a link for some information it would be much appreciated.
-Nick