Earning a certification from a flight school is a wise career choice in terms of salary; the average commercial pilot earns over sixty-thousand dollars per year, and airline captains can expect double that amount. That is why it makes good sense for students to invest in their future by financing their education. Traditionally, students loans, such as those available through SallieMae and other lenders, provide funding for students attending flight schools. However a relatively new alternative is making waves in the higher education finance world; an income share agreement (ISA) is a great option for students who want to avoid the debt concerns associated with student loans. Below is more information on ISAs as well as several advantages of using an income share agreement to help finance your flight training:

What are income share agreements?

Income share agreements are simple in principle and easily understood.  An investor or group of investors fund a student's education, with a commitment the student will pay the investors a fixed percentage of their income for a set period of years. The investors are hoping to earn a positive return on their investment in human capital, while the student obtains financial resources for pursuing an educational opportunity leading to higher pay. This arrangement yields several advantages for the flight student who pursues an ISA for their financial needs:

  • Easier to obtain for lucrative paying career students - Since investors are looking for a maximum return, they will seek to invest their funds with students who have higher earning capabilities in the long run. That means flight students are more likely to obtain an ISA at a lower percentage of income than those with lesser financial incentive for investors.

  • Repayment is based on income - Since a student loan payment is a set amount paid on a monthly basis, it can be financially challenging for individuals who have income restrictions, yet are still held to a fixed amount. With an ISA, the percentage owed is tied purely to income and will drop as income drops. This is a self-regulating arrangement that helps to prevent financial catastrophe for unemployed individuals.

  • Pairable with other financing arrangements - While it may be that an ISA is the only financial help you will need to attend flight school, obtaining one does not restrict you from other financial aid opportunities. Both federal and private loans are still available, if you need them, and you are less limited overall by having additional options.

  • Less impact on future debt considerations - An ISA is less likely to be a trouble spot for those who obtain one rather than conventional student loans. For example, ISAs are not reported as an obligation with a balance on credit reports as long as monthly payments are made regularly. In addition to this tangible advantage, ISAs are less stressful in the minds of ISA signatories as compared to those with conventional student loans. Finally, if an unexpected hardship becomes too great to handle, ISAs are considered as unsecured debt within the US Bankruptcy Court system and may be removed altogether during proceedings.

  • More freedom to explore career options - Even though the average commercial pilot makes a high wage, there are individuals who wish to pursue lesser-paying roles in non-profit or religious employment The repayment structure of ISAs provides breathing room for those who make career plans that might reduce their salaries, and prevents the perceived need to seek higher-paying jobs merely because of money.

  • Relieve strain from higher education funding at large - While deciding to pursue an ISA is likely to be done because of your own best interests, making the decision to use an ISA for funding your education helps alleviate the overall strain on the financial aid system. It opens another venue for students and relieves building debt pressures in higher education. Signing an ISA is actually a small, but tangible, act of public service.

 For more information about your finance options for flight school, contact an aviation school such as Parkland College.