Student loans are not the only way to finance your education

Two of the dominant responses to our recent series of pilot shortages concerned affordability of training and compensation for pilots entering the workforce. Many experts have suggested the numbers are just wrong.

For many who decide to pursue that worthwhile quest of becoming a professional pilot, student loans provide the opportunity to pursue their dreams. Indeed, they seem quite generous. Between private and federal lenders, new students can get almost unlimited access to money.

But should you finance your training solely through student loans? Students attending colleges/universities enjoy the benefit of applying for federal and state financial aid grants (including federally supported student loans) to pay for tuition, books, and other costs. Elsewhere, pilots have the option of completing all of their flight training with companies that can take you from zero to hero in under nine to 12 months that cover the costs using a personal loan that starts earning interest (often at significant rates, unless secured by a house or other assets) with payment schedules that begin when the money is accepted.

The backup plan

There are two experiences that shaped my decision-making psyche in my relatively young racing career.

The first came at the very beginning. In the first semester of my freshman year of college, before I even set foot on a plane, I tore my ACL trying to win a football scholarship. Although inconvenient, my injury wouldn’t have been so disruptive in other careers, but pilots need their legs to push the rudder pedals. So a torn ACL stood in my way, both for football and aviation.

As new pilots are promised a lucrative career, I wonder if there is another way to relieve students for the future.

I put my football activities aside and had to go to rehab for the whole school year, missing a full academic cycle in flight training. At the very beginning, I realized how my health would be equivalent to my career. Also, disturbance aside, all of this made me doubt that I was putting all my eggs in one basket.

When I wrote about whether pilots should go to college, many people emailed me saying that a pilot’s degree offered many people something to fall back on if things turned around wrong. They were on to something, but I wonder what would happen if that was the way the experts were advising those in flight training. In other words, would it be better to advise student pilots that in addition to flight training, they should consider major trends in the changing world and choose a comparable field of study that they would enjoy also, expecting something could go wrong?

On the one hand, it would let them know that other options are on the table – that if you have the mindset to be a pilot, there are equally rewarding areas worth pursuing. It doesn’t have to be something to fall back on.

To save money. Not really

The other experience that shaped my career was the issue of paying for training every time I flew. Because I moved to the United States for pilot training as an international student, I was only able to go to college because my parents could afford to send me there. I wouldn’t know about the wealth of private and federal student loans that some of my classmates have benefited from.

In a way, my ACL injury bought us time to determine consistent cash flow, because as most pilots will explain, the most effective way to train is to run through it without s ‘Stop. If you have to take a break, as many do, for financial reasons later, it can affect your skill. This means spending more on sessions to cool off.

The other benefit is that when I paid for each training session, I fully understood the reality of spending hard-earned money, and it encouraged me to develop habits that ensured that my training was effective. Money means something when you know where it comes from. Accepting that loans weren’t an option forced me and my parents to think about other ways to generate income, and after I finished my training, those income streams remained. What if you didn’t rush straight into training but considered that too?

When I finally graduated from college, I realized that these two consequences had perhaps the most lasting positive effects on my career. Understanding my career volatility and being debt free is a long trail to almost anywhere.

Later, when I started working as a CFI, I found myself in another dilemma. My paycheck would fluctuate based on factors beyond my control such as weather, mechanical delays, ATC delays and others. Being pushed to my own financial limits with very little wiggle room, I wondered how my counterparts were handling all of this with their student loans.

How pilots typically approach loans

On different occasions, I have met pilots with fully funded loans over $200,000. They explained that they would have 20 years to pay it off and their monthly payments ranged between $1,000 and $2,000. There was no room for disturbances. Sure, some would be able to refinance those loans as they go, moving to the airlines and working their way up, but when we zoom out, working nearly two decades to become financially complete again seems costly. I say expensive because conventional wisdom holds that time, over money, is the most important commodity.

According to Data USA, a Deloitte and MIT database that tracks US public data, the average age of major airline pilots is 44.4. Elsewhere, the US Department of Labor, Bureau of Labor Statistics (BLS) also shows that the median salary will be $160,970. Another way to look at it is that even with the pilot shortage in the industry – and the current financial incentives offered by many airlines – it takes years to get to the point where you start reaping the rewards of the investment made in training. In fact, a common feeling among pilots has been to stick to a tight budget while paying off their loans early in their careers, and to be as tight as possible in the early years, as there are rewards. on the background.

After all, their early-career cash flow—and their existing loans—demand it.

Is there another way?

As new pilots are promised a lucrative career, I wonder if there is another way to relieve students for the future. Additionally, when we look at the magnitude and pace of return on investment expected for those studying in fields such as software or computer engineering – especially with low barriers to entry – could pilots better s to settle in pursuing a degree in these areas of fields? What about having a more enjoyable lifestyle right from the start while relishing the benefits of flying by being able to afford it?

Embrace emerging technologies for their financial advantage.

There are a lot of options here that I think students should consider. For one thing, as I said before, pay attention to industry trends. When I wrote about the threat and promise of advanced air mobility, aside from the disruption expected to occur in the industry, there is actually an opportunity to pair your desire for flight with a group of college students in full boom. This might not sit well with many departments with dedicated pilot programs, but ultimately, your future is ultimately in your hands.

If you have to go into debt with student loans, would it be better to consider emerging technologies across the aviation industry that might require someone who is not just a pilot, but also has the capabilities techniques to work on these projects, and in addition, offer much more initial capital? You could have the best of both worlds.

Should you buy your own plane to train?

There is one other thing you might consider. Buy your own plane to practice. Believe it or not, the university professor who taught the theoretical part of my CFI course advised us to do it, although we laughed at the idea. Looking back, Professor Joe Clark was onto something. With the complex requirement to do most of your training in one plane removed, a used Cessna 172 could allow students to take all of their training, from private to CFI, and they would only have for hire for their multi-engine qualifications. If they did it with a partner, it might cost a fraction of the cost of the traditional method, but would have positive long-term effects, as you would be able to acquire hours for your airline pilot certificate much faster and sell the aircraft. then to recover the money invested. The plan offers the added benefit of aircraft ownership: convenience and pride.

There is more to say about pilot projects and student loans. In March 2020, when the industry was held back due to the pandemic, an interesting phenomenon occurred. The airline industry, like most others, relies on the flow of pilot labor, supported by mandatory retirement at age 65 for senior pilots. This allows newcomers to come in and realize their initial investment in training. Yet even though everything suddenly came to a halt, it took a while for the flow of pilots already on the move to stop – who had already borne the costs of training and were now facing furloughs or a break. in hiring pilots even with their student loans still due. What would have happened to the industry if the government had not provided assistance? If the pilots couldn’t keep moving up the pay scale, because there were no upgrades or the departments just weren’t hiring, how could they manage their true cost?

How then to consider financing his career as a professional pilot? As I’ve shared, my experiences have made me see that there are more options than I originally imagined If you need to take out student loans to fund a college degree, I think it’s worth worth considering degree programs that are not specifically geared towards pilots. Instead, look at those with fewer barriers, like those who just need internet access or access to certain software, but offer more immediate benefits right out of college. You can continue your flight training at the same time and enjoy both without having all your “financial eggs” in one basket. Additionally, it is worth considering subsidizing the cost of training by purchasing a trainer aircraft that will serve you long after training.

About Judith J. George

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