What is The ROI on Flight School?

I was struck by a few numbers from the article in the New York Times today ("Were They Just Paper Airplanes?"), namely $122,000 and $18,000.  The $122,000 was the amount in private students loans that one student at TAB Express flight school in Deland, Florida had taken out prior to the school going belly up and leaving students with lots of debt and without a pilot's license.  The tuition at the school ran $99,000 with living expenses adding about another $20,000 to the tab. The $18,000 is the salary that one of the Tab Express trainees is currently earning as a pilot for a regional airline. 

In terms of what a starting pilot can expect to make, this article indicated that a first officer after five years at a regional airline was making $28,000.  As a captain, she could expect to see her salary double.   Here is what I found on a Baltimore Sun blog: 

"My daughter is Captain on a regional jet. You are correct the starting wage is miserable considering the cost of her education. She is a graduate of Embry-Riddle Aeronautical University. What you also have to consider is in the airlines everything is driven by seniority. You have to wait your turn. It took my daughter five years to get promoted to Captain. This doubled her wages. After five years as a First Officer, she was making about $28K. So there is no “quick increase” to the $50K mentioned in your write up. A beginning accountant starts at $40K without having to worry about million dollar equipment or people’s lives."

So, let's assume that this trainee's $122,000 private loan had a 10% interest rate and 20 year term.  The annual repayment would come to a bit over $14,000/year, according to a FinAid student loan calculator.  Hmm, entering a field where one can expect to be earning $28,000 after 5 years would seem to make this a loan destined for default.  In fact, FinAid provides the following analysis with an estimate of the salary needed to repay this loan with a comfortable margin to cover other living expenses: 

"It is estimated that you will need an annual salary of at least $141,279.60 to be able to afford to repay this loan. This estimate assumes that 10% of your gross monthly income will be devoted to repaying your student loans. This corresponds to a debt-to-income ratio of 0.9. If you use 15% of your gross monthly income to repay the loan, you will need an annual salary of only $94,186.40, but you may experience some financial difficulty.This corresponds to a debt-to-income ratio of 1.3."

As credit tightens for private loans for flight schools, I would expect that either flight schools will have to drastically lower their tuition rates to improve their ROI for students or they will go out of business as more potential students recognize the difficulty of justifying their investment in flight training given the nature of the compensation structure of this field. 

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bottom line- there's no money in aviation