Financing Your Flight Training
Paying for your flight training should be simple. Take out a loan, fly the
plane, pay back the loan. Unfortunately it is no longer that simple. Many flight
training programs exploit the eagerness of a new pilot to learn and their lack
of knowledge about cost and interest. We will explain all of this later in this
section.
Average College Costs
Average State University Tuition '06
$?/yr
Total Debt
$?
Average Room and board '06
$?/yr
Total Debt
$?
Total Education costs*
$?
* Figures shown above are estimates based on current average flight training costs
throughout the nation based on data collected from XXX.
Average Flight Training Costs
Total Flight Training costs*
Private SEL
$10,000
Commercial MEL, Instrument
$50,000
CFII, MEI
$15,000
Total
$75,000
* Figures shown above are estimates based on current average flight training
costs throughout the nation based on data collected from XXX.
Financing Options
Private Loans
Repayment of a $75K loan with a co-signer and a standard 20 year
repayment period at X.XX% = approximately $XXX/Month
Repayment of a $75K loan without a co-signer and a standard 20 year repayment
period at X.XX% = Approximately $XXX/Month
If the Pilot has a co-signer for the loan they are generally able to get a lower
interest rate, as seen with the X.XX% above, but the total repayment of
principal and interest still comes to a whopping $XXX,XXX over the course of the
entire repayment of the loan.
Federal student aid
Text
Veterans Educational Benefits
Text
Sample Initial Earnings
Let’s take a basic hourly rate such as $21/hr for a first year First Officer at
an airline and then multiply that by the average minimum guarantee seen at the
airlines, 75 hours per month. So we have 21X75= 1575/month. $18,900 gross
earnings for the year and $6324 in loan payments. This leaves a pilot with
$12,576 in pretax earnings, which needs to cover all expenses for the year.
You can quickly see here were making a wise decision with regard to training is
important and how the current interest rates at many lending institutions are
less than attractive when compared to future earnings. As a second and third
year First Officer we will use $30/hr and $32/hr. This brings us an income of
$2250/month and $2400/month respectively. These numbers are still considerably
far off from the income needed to comfortably repay a monthly loan payment of
$527. The pretax income of a third year First Officer at 32/hr is only $28,800.
Assuming a 3rd year upgrade to Captain and an income of 61/hr that results in a
monthly pre-tax income of $4575/month. At this point the income is at a level
capable of loan repayment but not sufficient enough to compensate for the
previous three years of above means living.
When you figure in the cost of college and other expenses such as a car,
insurance, healthcare, food, clothing, and uniforms it is easy to see that the
results can be drastic. Be sure to research all available financing options and
when selecting employment be sure you think about your ability to financially
survive on the estimated earnings.