Loans: Friend or foe?

[JeffGreeley]

Hey everybody! I'm finally approaching the completion of my AA degree and it's almost time to move to the (small) city and go to a university. A year ago, I came to the sudden realization while working on heaps of accounting homework at 3 AM that I have a deep yearning to be a professional pilot. I had been considering this career for a long time, but for some reason I really got serious about it that night. After taking my discovery flight a few days later, I couldn't have been more fired up about my future. Since that time I've really wanted to get more training, but the nearest FBO is a 60 mile drive (Olympia, WA, the same place that I will be going to college soon). I don't have a steady income, so I if I had started training earlier, I only would've been able to afford like 10 hours of training.

I've been reading loads of advice from all the helpful people here on Jetcareers, and it's made me wonder if "abstinence" (from flying) is really the best thing for me to practice until I can afford to pay for training. A number of people on here recommend training as much as possible during college, even though the debt can be pretty intimidating. I obtained my first credit card and have been working on building a good credit score for 7 months now, and I just found out that my FICO score is 718. My goal is to get it up to 750 in the next 5 months. With this kind of credit, could I get decent loans for flight training? Ideally, I don't want a co-signer, but I could probably find someone if I had to. I won't be getting in much debt with college, because financial aid will be covering most of the costs. However, I don't want to work a part time job, go to school and take flight lessons all at the same time. So if I do get trained while in college, I'll be getting in 100% debt, since I have virtually no savings. As much as I love the idea of maybe getting my private and instrument certificates before I graduate in 2.5 years, is it really the best idea for me to get in this much debt when I'm still so young and financially unstable? One of my favorite things about members of this online community is that so many of you are able to base your advice directly on first-hand experience and wisdom. Has anyone reading this dared to get in the $10,000's of debt with private loans before finishing college or even building a decent resume? Any help would be greatly appreciated!

[Matt13C]

Since you are really concerned about debt you could always fly every other week. You could stretch your private and instrument over those two years paying all cash. You wont have as much drinking money but then again you are flying.

Another option is loans. Since you are in school you can use Sallie May or any other student loan company to finance the flying with low interest rates and differed payments. In the 2.5 years you should be able to get all of your ratings. Then you have 6 months to work as a CFI before you have to start paying them back when you graduate. As a new FO the pay is not great so you can work it so your loans are stretched out over 20 years to keep the payments to a minimum. As you work up to captain simply pay off the loans early and your done.

Or you could get a full time job out of college and fly weekends and take a few more years to work into the flying thing with no debt. It really is your choice and there are plenty of good options available. It all depends on how risk averse you are and how quickly you want to make it into a regional or any flying job for that matter.

Good luck and enjoy flying!

[aerospacepilot]

Congratulations on choosing to get your 4 year college degree. That should be priority number one, above anything and everything else.

Generally, when people have the money, it is best for them to get their ratings when going to college. That allows them to start working immediately after they graduate from college.


Since you don't have any money saved up, I would recommend a slightly different path. You don't want to drop $35,000 on all your licenses and ratings, and then have a $400 a month payment due while you are going to college full time. If I were you, I would finish your AA degree first. Depending upon your timing (say you graduate with AA in spring, start bachelors in fall), I would get a job in between and WORK, WORK, WORK!! Flying is expensive, and you are going to want all the money you can get.

Once you start college, get a feel for how much free time you have. If you can spare some time, get your private pilot license. I flew 3 times a week while getting an engineering degree, so it can certainly be done. Take out a loan for this. Once you are finished with your private license (should take about 4 months if you fly often enough), get a part time job. A $9,000 loan at 6% over 10 years (just pulled random numbers, your mileage may vary) had a $100/month payment. So if you are working 15-20 hours a week while going to school, it should be plenty to cover the payment.

The nice part about having a private is when you get some extra money, you can take friends up for a ride. This will help you build hours that you will need to get your commercial (commercial is 250hours, private usually takes only around 60).

As soon as you graduate, you can choose to either work for a year while saving money, or take out a loan and finish your flight training. Personally, I discourage huge loans. However, I always remind people that the best investment they can make is in their education (this includes flight training).

How does this sound?
Focus on college (it is the most important)
Get a private pilots license and build some time by taking friends for rides
Work as much as you can
When you graduate, finish the rest of your licenses and ratings.

Good luck,
Let us know if you have anymore questions.

[Pietrantonio]

I'm going to be honest. Loans can have their advantages, but it comes with a cost. I recently thought that loans were a "friend" until I tried to apply for the 2nd half of my loan to finish training. I, and my co-signer was denied all of a sudden. I thought back to how long it took just to get the 1st half, and all the back and forth BS I went through - we'll now we need this paper...etc....

So, in otherwords, I've placed loans as my "foe". When I think about it, having to pay back 400-600 for 30 years of my life, really turns my stomach. Listen to what a lot of people have to say here. Theres a lot of truth, and lots will chime in on this topic. It took me to actually dip my foot in the water to realize that loans were a "foe". You may be different, and actually benefit from loans, but this is just my perspective.

Good luck with the training. I would work on finishing your degree, and pay as you go. You'll probably have your PPL in hand by your Junior year, and then just build x-country time to meet the req. for your Instrument Rating. Depending on your working, saving, and time to fly habits, you should be able to walk away with a PPL, IR, and your 4 year degree in a few years. Then w/out college in the way, work and save. You can take people up and utilize the pro-rata share option. That will save you some money.

Airplanes will always been flying. No need to rush. If the mins go up, so you have to just instruct, etc...a little longer. It's really not a big deal. Good luck with everything! Keep us updated on your progress.

[Berkut]

Originally Posted by Matt13C

Since you are really concerned about debt you could always fly every other week. You could stretch your private and instrument over those two years paying all cash.

This isn't a good idea, in my opinion. You should fly often during your training. Flying often aids your retention and you spend less time re-learning things you've forgotten from lesson to lesson. Dragging it out would cost more than if he had just taken a loan out in the first place. Better to save over that period than to space the lessons out.

[moxiepilot]

let me start off reiterating that learning to fly is not like investing in a 401(k). If you put i n5 hours here and 5 hours there, over time, the cumulative experience does not get to a magic number making you a pilot.

the key to learning is consistency and frequency with a sprig of dedication, passion, sweat and panic.

I would recommend holding off your training until you have a good stash of cash. To give you an example, I gave this advice to some one who did not listen who trained for 3/4 of their rating, but could not finish due to cash.

now they have to go back and practice how to do all the stuff that they learned, which includes showing an instrtuctor they can still safely solo, go x-c etc. Hes looking at spending another 3 grand at least, whereas he couldve spent about $500 and finished if he just waited a little longer

[SteveC]

If I were in your shoes I would go to college, and study everything I could about flying at the same time. I would do all of the bookwork and studying for the numerous exams that I will need to take while I have the time and am in the studying mode. I would spend hours and hours on websites like this one so I can learn about the real world of the piloting profession. I would hold off on actual flying lessons until I could pay for it myself without loans. It might take a year or two out of college to do so, but it is important to me to stay out of debt to the greatest extent possible. Stay solvent!

Haven't pulled these out in a while:

SteveC's accumulated "Loan Rant" posts

[N826AW]

Avoid the loan if you can. But if you can't avoid one, be sure to pay it off way early. Loans become a problem when you take the full term to pay them off. If you are able to pay down the loan in 5 years, it may not be so bad. You will pay some interest but you will probably finish your ratings. There is some value in finishing quicker, how much so depends on you.

Good luck with your training and be sure to stick around JC. Its a good place to learn and contribute.

[Sprint100]

Loans are like that girl you date who seems nice at first, but then you get married, aka the repayment period, and you find out what a nutjob, slacker she is taking all your money.

[JeffGreeley]

Originally Posted by Sprint100

Loans are like that girl you date who seems nice at first, but then you get married, aka the repayment period, and you find out what a nutjob, slacker she is taking all your money.

Ahahah... perfect answer! Thanks everybody for all your great replies! You've certainly given me a lot to think about.

Quote:
Originally Posted by Matt13C
Since you are really concerned about debt you could always fly every other week. You could stretch your private and instrument over those two years paying all cash.

This isn't a good idea, in my opinion. You should fly often during your training. Flying often aids your retention and you spend less time re-learning things you've forgotten from lesson to lesson. Dragging it out would cost more than if he had just taken a loan out in the first place. Better to save over that period than to space the lessons out.

I tend to agree with Berkut on this one. Knowing me, I probably wouldn't retain my training well enough if I took sporadic, spaced-out lessons like Matt suggested. What do you guys think is a good amount of training to do each week, so that retention isn't a problem?

Originally Posted by aerospacepilot
If I were you, I would finish your AA degree first. Depending upon your timing (say you graduate with AA in spring, start bachelors in fall), I would get a job in between and WORK, WORK, WORK!! Flying is expensive, and you are going to want all the money you can get.

Once you start college, get a feel for how much free time you have. If you can spare some time, get your private pilot license.

As much as I hate to say it, this is really good advice. I think that I'll follow it and will work my arse off this summer. I might keep working throughout the school year if it isn't damaging my grades. Then, hopefully I'll have saved up enough cash to quit my job and focus on flying in my spare time throughout my senior year.

I value Pietrantonio's warning about loans, but I don't think that I'll avoid them entirely (maybe I'll change my mind after reading SteveC's Anthology of Loan Rantings, though). If I can pay for most of my training up front, then hopefully loans won't screw me over.

Originally Posted by Pietrantonio
Airplanes will always been flying. No need to rush. If the mins go up, so you have to just instruct, etc...a little longer. It's really not a big deal.

I think it's good to keep this in mind, but telling aspiring aviators this is like telling a guy who's stranded in the desert that he doesn't need to worry, because water will always be there waiting for him... 500 miles away. Truth is, I can wait, but it's pure torture. Screw abstinence.

SteveC's accumulated "Loan Rant" posts

Wow, that is a wicked collection of posts, Steve! Thanks for referring me to it. I'll read them later when I have more time.

Originally Posted by N826AW
Avoid the loan if you can. But if you can't avoid one, be sure to pay it off way early. Loans become a problem when you take the full term to pay them off. If you are able to pay down the loan in 5 years, it may not be so bad. You will pay some interest but you will probably finish your ratings.

I can't help but take your advice seriously when you're waving your finger at me like that.

Thanks again for being so helpful, everyone!

[N826AW]

I didn't mean to make it sound like I was wagging my finger. Just advice from someone who found the cost of flight training rise faster than he could save.

[JeffGreeley]

Originally Posted by Berkut

This isn't a good idea, in my opinion. You should fly often during your training. Flying often aids your retention and you spend less time re-learning things you've forgotten from lesson to lesson. Dragging it out would cost more than if he had just taken a loan out in the first place. Better to save over that period than to space the lessons out.

Originally Posted by N826AW

I didn't mean to make it sound like I was wagging my finger. Just advice from someone who found the cost of flight training rise faster than he could save.

No, I meant your avatar.
Those Delta flight attendants are irresistable...

[Matt13C]

Originally Posted by Berkut

This isn't a good idea, in my opinion. You should fly often during your training. Flying often aids your retention and you spend less time re-learning things you've forgotten from lesson to lesson. Dragging it out would cost more than if he had just taken a loan out in the first place. Better to save over that period than to space the lessons out.

I don't think it is a bad thing to fly every other week. Will it take you a bit longer, possibly, I think it all depends on the person. There are people, I am sure, who flew a few times a week and didn't get their PPL until well above the average just as I am sure there are people who flew once a week or every other week who got their PPL under the average time.

In a perfect world we all would be able to fly everyday and pay cash for all of our lessons. But if he just wants to fly, starting out every other week is not a bad thing. The difference in money could be offset by numerous things. What if he waits two years and the price of fuel doubles or triples. It will not matter that he is flying every day and finishes a mere 10 hours sooner, he will still be paying more than he would if he starts now.

Neither school of thought is wrong. Personally, I prefer flying as often as possible, but that is because I love being in the air. But I think flying every other week is better than not flying at all.