More Funding Questions...

[Daz]

I've been searching and scouring this forum for some time now, and read, well, pretty much everything.

 

I'm following a dream and planning a career change. I have some, uh, newfound freedom, and no dependents to support, so I'm going to start the long (and rewarding!) trek into the world of commercial helicopter pilot.

 

Along with all of my other research (talking to various pilots, companies, schools, etc.), I'm figuring out how to pay for it all. If everything goes perfectly, I'll have the tuition mostly paid by the profits from the sale of a house, but if that doesn't happen right away, I'll be looking at other funding.

 

Some real quick and dirty digging shows me that federal student loans will only provide me with a very small portion of the tuition - is this usually the case?

 

I've also recently been on an EI claim, so there *may* be some funding available from HRDC (although I'm not counting them by any means).

 

How did you do it? Line of credit? Bank loan?

 

The bank loan might be the way to go - the house will eventually sell, and between that and the tax break from the tuition payments, the loan will be paid off.

 

BTW, I'm looking at Bighorn Helicopters, as I have family in Calgary where I can probably mooch a place to stay.

 

Any and all thougts appreciated!

Darren in Invermere

[twinstar_ca]

i think cole is your best source of info, darren.... he's into his training now and can likely tell you about all funding methods.. he wanted it and went out and got it...

[Daz]

Yep, I found Cole's posts very inspiring. I'll likely be following a similar path (at least until the house sells), though I think I'm a few years older than he is *cough* turning 36 on Sunday *cough*

 

Just curious to see how many others went a similar route..

[xrkyle]

To qualify for student loans the school you're attending must be a designated educational institution. This is done at the Federal level. When you apply for student loans you get money from the Federal government and from the Provincial government. Most provinces won't loan money if the school isn't a DEI. Don't confuse being a DEI with being a provincially accredited post secondary institution - the latter does not imply the former. Human Resources and Social Development Canada are the folks you want to talk to about that. By the way, Bighorn is a DEI. The money you get is a drop in the bucket, roughly 5k for BC. What you get is based on need and they'll look at all your assets like your house, vehicles, savings and might pro rate.

 

If you want to try and get money through EI, Service Canada is who you need to talk to.

 

I personally am not going to go to school until I have cash on hand and then some.

But, if I were in your situation and was set on going into debt to go to school, I'd look into leveraging some of the equity in the house. It doesn't sound like you have a whole lot if you can't cover school after selling and paying your mortgage after giving the ex their half but it might help subsidize your training. I don't know where you live but if the rental market is tight like in major cities and you could cover your mortgage payments with the income, I bet you could make a run of it. You could always reamortize. CMHC is going the way of the US lenders and allowing 0 down and 30, 35 and 40 year amortization periods. The 1/4 point the Fed knocked off on Tuesday put the overnight rate a 4.25% and depending on your credit, you could get something close to prime (6%) The downside of this is I don't think the interest is tax deductible like it is for student loans and you'll be paying interest from day one where as the student loans give you a 6 month grace period (I think) after your training is finished before they start hosing you with prime + 4% interest or whatever ridiculous rate it is. Keep in mind the tax deduction for the student loan is a credit and applies to the lowest tax bracket and not your marginal bracket. But chances are, being a new pilot, your marginal rate will be the lowest rate anyway

 

And remember that in order to get the tax credit for your training, you have to be making income after your training to apply it against - something that not all new pilots can pull off so you may not want to count on that as far funding your plan.

[xrkyle]

I just noticed you said you're from Invermere so my idea probably wouldn't work.

 

Oh and being a registered post secondary institution doesn't imply being a DEI. Being accredited does.

[Daz]

I actually probably could pay my mortgage by renting the house out; the demand for rentals is fairly high here. I work up at the ski hill, and I know quite a few people who are looking to rent. If the house doesn't sell by the time I'm ready to go to school, I might just use the equity in it for leverage.

Keeping the house and renting it out is one option, but we're both likely moving, so the house will probably go up for sale. Our separation is very amicable, so we may enter an agreement to keep the house (and rent it out) as a partnership investment (for lack of a better term). The nice part about selling is that I'll pretty much have tuition and expenses covered; I'd be finishing school with no debt. Also, no assets (except maybe a vehicle).

 

I'm currently an avalanche tech at a ski hill, and I've been in the ski business for almost 18 years, so I'm no stranger to near-poverty.

 

I've also debated heading up to the oilsands for a while to earn the money up front, but that would mean my training would be delayed for a while. As I'm already 36, I think I'd rather go to flight school and start knocking on doors sooner, and save the oilfield job for the point when I'm unemployed and desperate.

 

Thanks for the heads-up on the tax. I wasn't counting on it per se, but I knew it would help as a little something extra when i'm spending the first years sweeping hangars.

 

Just confirming - Bighorn *is* in fact a DEI? I'll be paying them a visit in the new year, so I'll be chatting with them then, but any info I get now is great.

 

Thanks for your post!

[Cole]

Take a trip down to Creston, KVH isnt an acredited school but it is acknowleged so you do get a tax credit on the amount you spend.

 

The rates are reasonable and the training is top notch.

 

My advice is basically to use common sense, I have 2 lines of credit, one for $20,000 and one for $30,000.

 

Obviously you use the lowest intrest one first starting with whatever you already have. Pretty simplel.

 

As far as schools go I highley reccomend KVH but on the same token I dont think many schools are around long if they arent putting out decent students.

 

If you do decide to come take a look and a fam flight at KVH make sure to get a hold of Wendell befor hand, were flying 6+ hours a day right now and wendell books students almost a year in advance now.

 

If you have any further questions Ill be around, Im back in Penticton for the weekend as Wendell's gone to the states for a few days.

 

Cheers and good luck

Cole

[xrkyle]

I actually probably could pay my mortgage by renting the house out; the demand for rentals is fairly high here.

 

I've also debated heading up to the oilsands for a while to earn the money up front, but that would mean my training would be delayed for a while.

 

Just confirming - Bighorn *is* in fact a DEI? I'll be paying them a visit in the new year, so I'll be chatting with them then, but any info I get now is great.

 

I'd run the numbers then because it's never a bad idea to hold land if you can - plus long term, who knows what's going to happen with the Jumbo Glacier project? Another plus I forgot to mention was once you converted your house over to a rental property, the interest on the mortgage is tax deductible. Renovate (captial costs are tax deductible too) and cut it up into two or three units to generate a positive cashflow. All this is easier said than done

 

I thought of going up and working my butt off in the oil and gas sector too. I spoke to some friends who were there and found that as a new roughneck making the entry level wage it wasn't really worth it even with the ridiculous amounts of overtime. If you have IT or financial skills or certain trades, the UAE might be a good place to go. You basically earn the same as you do in Canada, minus all the tax. Just make sure living accommodation are included - the cost of living is very high there.

 

In the end I decided against all those options because I wanted to start ground school and working in the industry ahead of time - even if it took another 6 months to save up.

 

Yes Bighorn is a DEI - you can get a list by province on HRSDC's website.

[Daz]

Good to hear from you, Cole!

 

I have yet to do deep research into KVH, but I will. The main reason I'm considering Bighorn is 'cause I can probably stay in Calgary for very cheap (likely free).

 

I just might head down to Creston and pay a visit to KVH.

 

I assume that as KVH is not accredited that both your LOC are from the bank?

 

One of my thoughts would be to take out loans/LOC, then if the house sells, find a safe investment that pays the same interest as the loans charge - then the house profit would be at least cancelling the interest of my loans, and if things ever get tight, I could just use the cash from the house sale to bail myself out. If things go well, then I have a nice investment. If I'm lucky, I can find an investment that even pays a bit better (more research I need to do...)

 

Cheers!

 

Darren Burt

Invermere, BC

[Daz]

I'd run the numbers then because it's never a bad idea to hold land if you can - plus long term, who knows what's going to happen with the Jumbo Glacier project? Another plus I forgot to mention was once you converted your house over to a rental property, the interest on the mortgage is tax deductible. Renovate (captial costs are tax deductible too) and cut it up into two or three units to generate a positive cashflow. All this is easier said than done

 

That's true - Invermere real estate isn't dropping in price by any means. My house is too small to split up, but it's small size and the fact that our mortgage is relatively small (got in before the crazy boom) means that renting it out to two folks would cover the mortgage payment. I didn't realize that mortgage interest is tax deductible when my house is a rental property - that's good news (every little bit helps).

 

The more I look at Ft Mac area jobs, the more I find it's just as you pointed out - the entry level wage is not bad, but the work, the hours and the cost of rent/living can be almost counterproductive. I don't have many skills that would translate to skilled oil/gas jobs, so I'm leaning away from that...

One thing about my current job - it's seasonal, and I technically get laid off every spring and re-hired in the fall. When I leave, I won't be quitting, I will have been laid off (and leaving on excellent terms). As they're always desperate for experienced ski patrol/avalanche techs, I could likely come back to work for the winter at any time.

 

Great info in your post; thanks!

 

Darren