Please help me!

[ccummins]

Just thought I'd throw this out there and see what you all think, and I'll try to be brief. I'm 26, zero debt(car paid, cc paid), no girlfriend/wife, plan on prepaying health and car insurance for at least a year before I head to ATP. Got approved for 62K through nextstudent(4.5% plus LIBOR, have yet to figure out what this comes to, no one will give me a straight answer). Leaving a 40K/year job to pursue my dream, although I did live on 20K a year when I was 21(had a apt, car loan, many credit cards, and a bad roommate who was never on time with bills, rent, etc.) so I've been down "tight budget" road before. I do hate the fact I have to get a loan for all of this. I'm currently having a bad experience with my FBO(planes down, too many people training, bad weather). I get maybe 2 hours a week In when all goes well. I would do the self paced program but I can only dedicate 3 of 4 weekends a month due to my job, plus I'm sure I'd have to drive further away to another airport to do it since my FBO hates ATP. I guess what I'm looking for is some motivation with this. Came close to signing the loan paper work last night and sending it in. Part of me says screw it and pack my bags, and part of me says forget it. Pros I have found so far are: excellent training at an reasonable cost, I'm live within 2 hours of many regional domiciles(I live in Richmond, VA), and my parents said I could live with them after I'm done, just have to buy them groceries ever so often. Cons: damn loan. Any advice and insight would be very helpful. Also, if anyone has completed or is currently training at the Daytona location, let me know what its like or how its going.

Thanks in advance!

Chris

[nkoenig]

chris check your pm's..

[skydog]

You have set yourself up well. Now be patient. Don't take out a loan for flight training. You have a good paying job. Live lean and save up your money for training. Then when you make the leap you can go debt free.

[Captain_Bob]

Originally Posted by skydog

You have set yourself up well. Now be patient. Don't take out a loan for flight training. You have a good paying job. Live lean and save up your money for training. Then when you make the leap you can go debt free.

That philosophy can go either way unfortunately.

Plus side of waiting and saving...

- No debt.

Potential Negatives:

- Debt.
- Miss the seniority bus. ie: if you got hired somewhere in 2007 with a quick upgrade... then you are building PIC time quickly and prepping yourself for the majors pretty quick. However, if you wait 4-5 years then we may be back in the "downside" of the aviation hiring cycle and it may take an additional few years to get hired and even longer to upgrade.

Everyone lately seems to be basing the "don't do it now and go into debt" decision on current hiring trends in the industry.

We all know it's cyclical. When I came on this board in a few years ago... people were begging for leads for ANY flying job... CFI, Traffic Watch, Jump Pilot, Pipleline Patrol, Bush Pilot, etc... ANYTHING that would keep the flying and hopefully make a paycheck at the same time. The airlines just weren't an option unless you had 1500-2000+TT and an internal Rec.

So... my recommendation is this. Go for the happy medium. Wait until you can pay off a good chunk of the bill upfront and finance the rest. Don't let life get in the way of your dreams. People will finance a $30,000 car without blinking and yet folks on here will tell you not to finance something that would lead to your dream job or career.

So basically... start doing your calculations now. Come up with a number to finance that seems reasonable on paypack and terms. Then when you reach your goal of being able to only finance that amount... go for it.

Even so... as bad as the full amount of the loan can be... I personally know many FO's who survived paying their loans, having a family, living on CFI and First year FO wages... and are doing just fine. In fact many of those same guys are upgrading and doubling their pay within only 2 years of getting hired. Obviously that's a best case scenario... but it's an example of a true scenario.

It can go either way in this industry!

Good luck!

Bob

[killbilly]

LIBOR is the margin rate on the lending bank tacked on to the school loan - I phoned Nextstudent and asked them about this - they said typically the LIBOR is 5.25% so add that to the 4.5% you're potentially paying - 9.75 based on your numbers and their "typical" LIBOR.

Nextstudent did not have ATP listed in their aviation schools list, and the gentleman I spoke with (who was very helpful) was not able to locate ATP on any of his lists; but they did have AriBen Aviator listed. Who did you talk at at Nextstudent? I'm curious about this now.

[ccummins]

Thanks to everyone for such a quick response. Love the atmosphere here, everyone wants to see you succeed.

Bob you are very wise. Very true people buy $30K+ for a car and no one says anything, or take my sister, went to a 4 years school out of state and has way more student debt then ill ever have. What I'm starting to realize is that I better start working toward my dream full time. The first years will be rough and I will have to make sacrifices, but I'll be doing what I love.

Billy, ATP got me financed Through NextStudent. SallieMae didn't like me. You will have to take 2 courses Through UVSC in order to get the money for ATP. Its a backward way of getting financed. Plus, the flight training you get ATP can go toward your degree at UVSC. Not a bad deal in my opinion. The two classes they told me to take are "Air Traffic Control" and "Flight Physiology". I hold an AAS so I've transfered my credits over, basically all my Gen Eds are taken care of, just have to focus on the Aviation part. And you are right about NextStudent, very friendly and helpful with any question or problem you may have. The guy even told me he looks forward to seeing me in the skies.

I also told my boss today about my plan to goto ATP. He told me good luck and I'll always have a job with them if this doesn't work out.

Thanks again everyone!

Chris

[av8sean]

No debt. No chick. No kids. You're in the sweet spot. Go do it!

[LoadMasterC141]

Little confused about the NextStudent thing--Was it NextStudent or SLM that said you had to take 2 UVSC courses? Would they say the same thing to someone with a 4 year degree versus two I wonder? I was considering NextStudent, but am curious as to the reasoning behing the need for you to take the classes(if it was them that said that).

Also, how come SLM did not like you? Was your credit low? No cosigner?

When I apply, my FICO will be around 700, and I'll have two cosigners, one with 700 and the other with absolute perfection. I'll be applying for $30k and paying the rest if all goes well this year. Truly, I am hoping to stay below 7.5% total interest. 9.75% sounds a little high; 7.5 is high enough.

Bob gives great advice. Save up as much as you can, live cheap, and continue living cheap when you are making more money, and pay off that loan fast so you don't pay close to as much interest. I have never paid a loan to maturity.

Oh and congrats on your decision and best of luck! I'll see you there in late summer!

[aussieflyer]

Originally Posted by killbilly

LIBOR is the margin rate on the lending bank tacked on to the school loan - I phoned Nextstudent and asked them about this - they said typically the LIBOR is 5.25% so add that to the 4.5% you're potentially paying - 9.75 based on your numbers and their "typical" LIBOR.

Nextstudent did not have ATP listed in their aviation schools list, and the gentleman I spoke with (who was very helpful) was not able to locate ATP on any of his lists; but they did have AriBen Aviator listed. Who did you talk at at Nextstudent? I'm curious about this now.

LIBOR stands for London Interchange Bank Offer Rate.

Basically, it is the wholesale rate that banks offer cash to each other on the london market, which is the leading banking centre for the cash market.

So by them saying LIBOR plus 4% they are fixing their margin at a constant 4%. Even though the LIBOR rate may move up and down they will have hedged and have a constant 4% margin on the loan position.

Its pretty common to use the LIBOR rate rather than a fixed rate in personal loan documents.

You can check the current 90 day libor rate by just going to google and putting libor rate in the search box.

Hope that helps.

[MichaelCPS]

Originally Posted by LoadMasterC141

Little confused about the NextStudent thing--Was it NextStudent or SLM that said you had to take 2 UVSC courses? Would they say the same thing to someone with a 4 year degree versus two I wonder? I was considering NextStudent, but am curious as to the reasoning behing the need for you to take the classes(if it was them that said that).

Also, how come SLM did not like you? Was your credit low? No cosigner?

When I apply, my FICO will be around 700, and I'll have two cosigners, one with 700 and the other with absolute perfection. I'll be applying for $30k and paying the rest if all goes well this year. Truly, I am hoping to stay below 7.5% total interest. 9.75% sounds a little high; 7.5 is high enough.

Bob gives great advice. Save up as much as you can, live cheap, and continue living cheap when you are making more money, and pay off that loan fast so you don't pay close to as much interest. I have never paid a loan to maturity.

Oh and congrats on your decision and best of luck! I'll see you there in late summer!

There is an alternative to NextStudent and SLM: MyRichUncle.Com. I believe they work closely with NextStudent (it may be the same company), but I have had students apply for loans with both companies and myrichuncle ALWAYS has the better terms.

Michael

[bigs]

Chris,

I did the whole huge loan thing in 2000/2001 at Pan Am when it was still in Ft. Pierce. As everyone has said, there are a lot of pros and a lot of cons. I left with my CFI and $75,000 in debt (including living expenses while down there), and then moved back to Richmond, VA. I learned a lot from some really great instructors (some not so great), flew nice airplanes, and made some great friends. Just be sure you understand the ramifications of going that far into debt. I couldn't afford to fly when I moved back up here, and am just now getting to the point where I'm able to get back into it even a little bit from a money standpoint. It took getting a good paying sales job and a few good financial years strung together to even be able to think about getting back up in the air...but I have missed it terribly and will find a way to achieve what I set out to do.

Another consideration is whether the loan is fixed or variable. My loan is a fixed rate, but I have a lot of friends who took out key bank loans, deferred portions after flight training (bad idea, interest keeps accumulating) who owe almost as much as they did five years ago. Just think long and hard before digging that deep of a financial hole for yourself, as the reality of climbing out of it is quite painful.

That being said, if you really want to fly then find a way to make it happen. I know it can be kind of tough around here, as you basically would have to drive to either Manassas or Williamsburg to get any kind of multi-time since neither Hanover nor Chesterfield has a multi-engine airplane any more, but ATP may be a great alternative for you. Make sure you will be able to instruct with them to build your multi time after getting your ratings. I've known several people that have gone that route. Also, in Manassas Dulles aviation seems to have a pretty squared away program. I met with them at one point, and ATP Manassas I believe is on the same field. Anyways, best of luck and let me know if you would like any more information.

Take care,
Bigs

[ETAV8R]

Great questions and thread.
There is hope yet. I haven't tried the nextstudent route yet.
I have been denied on two occasions with SM. Hoping to re-apply this spring.

Any answers for the guys with 4yr degrees already? ATC sounds like a cool class but my plate is full right now as is. Working on my PPL and learning Part 139 and 1542 for my new airport operations job along with all the ojt for said job are kicking my ass. I'm working two jobs for various reasons.

[ccummins]

Thanks again for all of your help. I went ahead and applied @ myrichuncle.com for a loan. They have ATP listed under UVSC, so its essentially the same process as NextStudent. Hoping to come away with a better rate! I'll let everyone know what happens.

As far as taking the two courses ATP recommends, I'm hoping to get them done before I start ATP since they are on-line. If anyone is interested I checked out the syllabus for ATC and Flight Physiology. ATC has 5 assignments, 1 class project(visit an ATC facility or use an ATC simulator software), a midterm exam and a final exam. Flight Physiology has a research paper(5-7 pages), 2 midterm exams, and a final exam.

[ETAV8R]

Well that sounds pretty basic.

[CaptainChris87]

wow sounds like your pritty determined to get this done,no loans, and most important no gf/wife, so you can go full throttle. if you got any questions PM I currently finished comm-multi and am waiting fo rCFI school on Jan 2. Good luck! and always know JC's here for you with any questions or concerns.

[CaptainChris87]

Originally Posted by nkoenig

chris check your pm's..

which chris?

[nkoenig]

ccummins

[ccummins]

As promised here is what happened with my "MyRichUncle.com" financial aid application. Got approved this morning for 58K. Fee only came to $2,416, while NextStudent was $4,134. Rate during deferral came to 2.65%, NextStudent was 4.15%. Rate following deferral came to 3%, Next Student was 4.5%. These rates will be added to LIBOR. Not a big saving, but anything helps. Hope you all find this info helpful.

Chris


*got a call an hour after I got the email from MyRichUncle, The same company runs both MyRichUncle and NextStudent, asked me if I wanted both loans, go figure*