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$165,000 debt and no flying job. Advice?

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$165,000 debt and no flying job. Advice?

Old 22nd May 2023, 18:57
  #101 (permalink)  
 
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Originally Posted by aussieflyboy
Plenty of Pilot jobs around at the moment.

Year 1 SE Piston: $50K income - $500 repaid
Year 2 SE Turbine: $60K income - $1,500 repaid
Year 3 ME Piston: $70K income - $2,800 repaid
Year 4 ME Turbine: $85K income - $4,650 repaid
Years 5 - 7 Jet FO: $130,000 income - $35,100 repaid
Years 7 - 13 Jet CMD: $210,000 income - $126,000 repaid

13 years to pay off $165,000 HECS debt. So an 18 year old finishing the uni course at 21 could be on $200+K a year as a 35 year old and HECS debt free.
I've done a rough calculation using the repayments you have said, which which are all thousands of dollars less than the indexation for that year..

By my reckoning by the time you take the 7% indexation rate and compounding into account, you won't be debt free after 13 years. The debt will have ballooned to $233000. about 41% more than the original balance and you would have been charges around $187000 in indexation to go backwards.

Still think it's a good deal?

Imagine if you had invested that instead...you can bet someone else has got very rich and they aren't working as a pilot. Check the cars in the flying school car park.
Who remembers NK and his smug mug on the rich list having fleeced the system of $66 million via these loans?

Last edited by Clare Prop; 23rd May 2023 at 05:53.
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Old 22nd May 2023, 20:15
  #102 (permalink)  
 
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Originally Posted by Clare Prop
I've done a rough calculation using the repayments you have said.

By my reckoning by the time you take the 7% indexation rate and compounding into account, you won't be debt free after 13 years. The debt will have ballooned to $233000. about 41% more than the original balance and you would paid around $187000 in indexation to go backwards.

Still think it's a good deal?
Imagine if you had invested that instead...you can bet someone else has.
Don't forget that the debt will seriously affect your ability to get loans for anything else. So you might be education debt free by 35 but you have prolonged your entry into the housing market etc by a long time. There's no such thing as easy/free money thats loaned, debt is debt.
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Old 23rd May 2023, 01:15
  #103 (permalink)  
 
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I don't understand. Spend $165,000 that you don't have and then look for advice after.
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Old 23rd May 2023, 01:56
  #104 (permalink)  
 
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Better still, get some qualifications, get a trade or profession, work, buy a house, then if you don't have the cash use the equity in that house to pay for your flying as you go..

The other problem with ballooning HELP debt is that when you realise that your rather expensive Diploma/Bachelors in Aviation is as much use in the industry as a chocolate teapot, you are maxed out and can't use the HELP what it was intended for, ie to help people fund training as a investment in their (and the taxpayers, because it is our money) future and to fill industry needs...instead of seeing graphs like this, which BTW is 2020 when the indexation was 1.8%. It is now 7.1%.









Source: Australian Taxation Office
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Old 23rd May 2023, 11:15
  #105 (permalink)  
 
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7.1% is an outlier of an indexation rate. Itís generally not that high and is a direct result of the affects of Covid. Remember in 2021 it was 0.6%.

The ten year average is 2.5%.

$165,000 is a ridiculous amount for a CPL. You should have shopped around.

Remember not everyone has a rich mummy and daddy. The HECS HELP loan program has helped many good pilots become pilots many years earlier had they worked and payed upfront.
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Old 23rd May 2023, 13:10
  #106 (permalink)  
 
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Just how do you know even who to ask before you get into the industry?

Glossy magazine articles promoting becoming an airline pilot, due to the upcoming shortage, are surrounded by advertisements. Go to any school and they’ll tell you of the impending boom. Talk to an airline pilot and there’s a fair chance you found a good one who worked hard and also may have gotten lucky and rode the gravy train to a successful jet career.
Or maybe read the Airline CEO’s press release about giving back to aviation, whereby they open a major airline training school. In small writing there is something about debt, and the possibility of maybe interviewing for the airline upon completion of training.

I suspect a high proportion of those that borrow for their CPL have simply fallen for the hype.
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Old 23rd May 2023, 22:21
  #107 (permalink)  
 
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Originally Posted by aussieflyboy
7.1% is an outlier of an indexation rate. Itís generally not that high and is a direct result of the affects of Covid. Remember in 2021 it was 0.6%.

The ten year average is 2.5%.

$165,000 is a ridiculous amount for a CPL. You should have shopped around.

Remember not everyone has a rich mummy and daddy. The HECS HELP loan program has helped many good pilots become pilots many years earlier had they worked and payed upfront.
Spot on.

Youíre paying it down too, it doesnít just keep indexing on the rolling base.


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Old 24th May 2023, 02:57
  #108 (permalink)  
 
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I've included it being paid down.

Indexation is applied on the balance on 1 June each year. Then the tax return is done and it's determined if you have had not enough or.too much deducted from your pay, in which case you either have to stump up more or get a refund just like any tax bill. Then the required amount is taken off the loan balance. That money being deducted from wages is going somewhere else until the tax office transfer it across to the debt once a year. It's not paying down the loan throughout the year.

So the only way to get it down quicker is to make a voluntary payment before 1 June.

Study and training loan indexation rates | Australian Taxation Office (ato.gov.au)

I made a stuff up on my formula in the spreadsheet and the balance, based on 7% indexation and the repayment schedule, is $193622 with $17816 in indexation costs at the end of year 13.
At 2.5% the balance after 13 years is $93219 and the indexation costs $48369. That's still a long way off being debt free. So with the indexation being what it is, you would be better off refinancing your student debt with a bank loan and paying off a big chunk in the next week.
The good news is that when you die it gets wiped and your deceased estate doesn't have to pay it back. The taxpayers have to see it getting written off.

I'm presuming you spoke to a qualified financial advisor (not a flying school salesman) when you agreed to this massive financial commitment? They have to abide by some very strict codes of ethics so you may have some recourse there. If you just bought the package from a glossy brochure then it is a case of caveat emptor.

Last edited by Clare Prop; 24th May 2023 at 03:43.
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Old 24th May 2023, 03:20
  #109 (permalink)  
 
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Based on some rough estimates a 200 hour CPL licence will set you back about $70,000 for aircraft hire and another $10,000 for theory and stuff. Obviously a good student/instructor combo on an integrated 150 hour course could save significantly more probably dropping that down to the $50,000 to $60,000 mark. Add $20,000 for an FIR you should not be cracking $100k. Again, the HELP whatever government courses run through universities and TAFEs is a rip off scam, for both the tax payer and the student. It may have helped the odd pilot gain employment, but also debted them up to the eyeballs, but far more has been wasted on those that haven't gone anywhere near a commercial operation. As I said earlier the better system that would have maximum benefit for the Aviation sector would have been subsidies to the actual aviation operators, not fattening the pockets of the education sector, who already make billions from keeping individuals in eternal education.

The good news is that when you die it gets wiped and your deceased estate doesn't have to pay it back. The taxpayers have to see it getting written off.
Yet, while the education debts continues to spiral out of control, and so much wealth remains in inheritance its only a matter of time before we get inheritance tax and those items come out of your estate before they are passed on.

It is quite easy to understand why the government prefers HELP/HEX/VET whatever to subsiding. The student debt method means that in theory the money comes back in and is not spent, even though the truth is far from that, and subsidies are lost revenue that is spent and is not returned.
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Old 24th May 2023, 04:00
  #110 (permalink)  
 
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Yes $80grand is about right for a non integrated 200 hour CPL from go to woah.
Often that includes about double the command time of the integrated students as well, much more valuable in finding that first job than loading up with ratings.

There has been talk of changes to the debts so that they are included in a deceased estate, as they should be like any other debt to the ATO. I think that talk will get louder now that the gap between debts and repayments on the graph above is about to get a whole lot wider.
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Old 24th May 2023, 04:36
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Originally Posted by aussieflyboy
7.1% is an outlier of an indexation rate. Itís generally not that high and is a direct result of the affects of Covid. Remember in 2021 it was 0.6%.

The ten year average is 2.5%.

$165,000 is a ridiculous amount for a CPL. You should have shopped around.

Remember not everyone has a rich mummy and daddy. The HECS HELP loan program has helped many good pilots become pilots many years earlier had they worked and payed upfront.
The indexation rate average over the last 10 years may have been 2.5%, but look at who was in government over most of those 10 years.

Looking at the polls today I'd say 7% will be the norm for some time to come.
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Old 24th May 2023, 10:22
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Just how do you know even who to ask before you get into the industry?

Glossy magazine articles promoting becoming an airline pilot, due to the upcoming shortage, are surrounded by advertisements. Go to any school and they’ll tell you of the impending boom. Talk to an airline pilot and there’s a fair chance you found a good one who worked hard and also may have gotten lucky and rode the gravy train to a successful jet career.
Or maybe read the Airline CEO’s press release about giving back to aviation, whereby they open a major airline training school. In small writing there is something about debt, and the possibility of maybe interviewing for the airline upon completion of training.

I suspect a high proportion of those that borrow for their CPL have simply fallen for the hype.
- You google the pilots award, you'll find the extremely poor wages paid to a flight instructor and ga pilot.

- You look at those glossy flyers, it will say how many hours are included in the package, you then google flight training schools, look at the hourly rates then do some calculations.

- If you can't think to yourself 'shit, that's a lot of money, it wouldn't cost that to become a doctor, maybe I should have a think about this' mmm, then maybe you shouldn't be a pilot.

Are just some of the ways.

If you can't do basic maths, or you did vege maths at school, you have no place becoming a pilot, as some of these people have shown. If you never thought of becoming a pilot before stumbling upon a career day or it just popped into your head one day, you should not be a pilot. The career comes with some huge challenges no matter how intelligent, how talented or how much of a natural you are and requires resilience and a good liver until you realise that that's not how to deal with things. Resilience, which none of these people have shown and is no longer taught by a school system, parents or mates. If you are lucky enough to develop it outside those places where you don't get taught, maybe you're a chance.
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Old 24th May 2023, 23:23
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You have come this far chasing the dream. Your options are:
1/. Ditch it and find a job/career that will pay off the debt; or
2/. Send it, dive in, find that job. Do whatever it takes.

In the 1990s pilots would move to Darwin or Kunnunurra or Derby or Broome and get a job pulling beers, and wait. Just doing a trip up north handing out resumes will not land you a job - your prospective new employer is entrusting you with more than just an aeroplane and they want a sense of who you actually are. Very occasionally an applicant stands out as a "hire now". Most of us don't.

You only live once.
Everything in life needs to be a "**** Yeah!" otherwise it's a no.
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Old 25th May 2023, 00:58
  #114 (permalink)  
 
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These Flight Schools are taking the piss, I mean a ‘GA Ready Course!’ Give me a break. Something like a GA ready course or Flight Instructor rating should really come with a job offer to be worth anything.
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Old 25th May 2023, 02:04
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The integrated course with a whole lot of ratings doesn't prepare people for GA. They dress the students up in a pilot costume, get them to do a one size fits all follow the bouncing ball course which is never done in the minimum hours they quoted, and make them think that they are going to get the big prize of an airline job and earn megabucks on graduation. Well, we all know how that turns out for the majority of them.

I actually thought that GA ready courses were an april fools joke but having met some of the graduates of some integrated courses they really would need to do a lot more if they have to "lower themselves" to doing a job where that snowy white shirt might get a bit of red dirt or oil on it and god forbid they may need to refuel their own aeroplane and even look out of the window instead of following a magenta line.

If people want to work in GA and the many careers in that field they should do non-integrated, where you will be job ready when you qualify, ie have command time on relevant airframes and have gone out and done your hour building using your own initiative to gain valuable experience flying Day VFR.



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Old 25th May 2023, 02:22
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Originally Posted by Clare Prop
The integrated course with a whole lot of ratings doesn't prepare people for GA. They dress the students up in a pilot costume, get them to do a one size fits all follow the bouncing ball course which is never done in the minimum hours they quoted, and make them think that they are going to get the big prize of an airline job and earn megabucks on graduation. Well, we all know how that turns out for the majority of them.

I actually thought that GA ready courses were an april fools joke but having met some of the graduates of some integrated courses they really would need to do a lot more if they have to "lower themselves" to doing a job where that snowy white shirt might get a bit of red dirt or oil on it and god forbid they may need to refuel their own aeroplane and even look out of the window instead of following a magenta line.

If people want to work in GA and the many careers in that field they should do non-integrated, where you will be job ready when you qualify, ie have command time on relevant airframes and have gone out and done your hour building using your own initiative to gain valuable experience flying Day VFR.
Its the same in all industries at the moment. In the old days you had industry placement and apprenticeships. Now a lot of uni courses skip placements so that the first time an engineer sees a real work environment is day one of employment and so on.

The CPL course like a drivers licence and heavy vehicle license is about providing the candidate with the minimum required skills to be able to start off at a base line. It was always accepted that experience added on top of that made the pilot, otherwise even CASA would not have minimum hours for various positions and further qualifications.

If I wanted a new mechanic for my BMW repair shop and there was no experience help available I would not expect a freshly minted TAFE trainee to know the ins and outs of BMWs. Instead I'd take them on as an apprentice and show them how it's done, then pay them well to keep them once they do it to a high standard.
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Old 25th May 2023, 02:35
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Originally Posted by Clare Prop
The integrated course with a whole lot of ratings doesn't prepare people for GA. They dress the students up in a pilot costume, get them to do a one size fits all follow the bouncing ball course which is never done in the minimum hours they quoted, and make them think that they are going to get the big prize of an airline job and earn megabucks on graduation. Well, we all know how that turns out for the majority of them.

I actually thought that GA ready courses were an april fools joke but having met some of the graduates of some integrated courses they really would need to do a lot more if they have to "lower themselves" to doing a job where that snowy white shirt might get a bit of red dirt or oil on it and god forbid they may need to refuel their own aeroplane and even look out of the window instead of following a magenta line.

If people want to work in GA and the many careers in that field they should do non-integrated, where you will be job ready when you qualify, ie have command time on relevant airframes and have gone out and done your hour building using your own initiative to gain valuable experience flying Day VFR.
Exactly.

If the OP wants to salvage his dire situation, and if he has any money left at all, he should round up a few mates, hire a C206, throw beer, fishing gear, a tent and swags in the boot and head off on some cost-sharing trips around the bush. If he could find another pilot needing PIC, they could do a combined 50 hours. Each could only log 25 hours as PIC - and none as 'co-pilot' (don't even think about doing that) - but could log the other 25 as observer or supernumerary, not counting it towards total flying hours of course.
Take advantage of the trip to throw a few resume's around during refuel stops. Approaching the chief pilot from airside could be advantageous.
It's only exposure to the real world of GA that's going to help him now.

Last edited by Mach E Avelli; 25th May 2023 at 02:48.
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Old 25th May 2023, 03:21
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Yep, all that pushing the boundaries of the comfort zone, networking and having a great time should be done before CPL ideally.
I've had CPs call me and say "Has X that was up here hour building a few weeks ago got their CPL yet because I need a pilot that's got experience in remote areas"
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Old 25th May 2023, 08:05
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Exactly what Clare Prop said at Post #117! I'm glad I'm retired from the flying school scene. I recall having a few 'robust' discussions with a marketing manager who was exuberantly 'selling the dream" and suggesting that he might like to temper it with a touch of reality.
By the time the academics from CASA had finished with the syllabus and all the boxes were ticked during training, there was precious little time or money left to properly equip a student for the commercial world.
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Old 25th May 2023, 12:04
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Originally Posted by ravan
Exactly what Clare Prop said at Post #117! I'm glad I'm retired from the flying school scene. I recall having a few 'robust' discussions with a marketing manager who was exuberantly 'selling the dream" and suggesting that he might like to temper it with a touch of reality.
By the time the academics from CASA had finished with the syllabus and all the boxes were ticked during training, there was precious little time or money left to properly equip a student for the commercial world.
The problem you have is that you are selling something that the customer is already dreaming about. If you give them a dreary picture of that dream they will just go to the next place that sells the picture of the dream they envisage. As said before the best way to really sell a commercial ready course is to have a job lined up at the end of it. It might not be permanent full time work, but something that gets the hours ticking over for a start.

Marketing/advertising will never reflect reality, otherwise why pay for marketing, it sells what could be under the perfect conditions. The key is not to promise anything you could be sued for later, hence all the little * and fine print even on TV ads.

GA has generally suffered from terrible marketing, with excuses I've heard range from expense, to 'if I advertise, everyone gets more students not just us'.

If I remember correctly a particular flying school used to have the slogan "First in flight training" because they were located on First street Moorabbin.
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