When Silver State Helicopters went bankrupt in 2008, it left more than 2,000 students on the hook for more than $100 million in loans. Most flight schools don’t operate with the same full up-front payment policy, but the event drew attention to the vulnerability of students in the case of a sudden flight school closure of this nature.
A recently passed law in California is intended to protect the financial wellbeing of students, but AOPA thinks it may go too far—saddling flight schools with a financial burden that may be insurmountable for many, and possibly leading to the closure of many training operations.
AOPA joined a packed house of members of the aviation community June 7 to explain the potential detriment of the law before the California Bureau of Private Postsecondary Education (BPPE) Advisory Committee. The law requires flight schools to pay multiple new administrative fees and open their books to regulators as part of an effort to provide more business accountability and protect students who seek an education at a postsecondary school.
AOPA led off the testimony to explain that while there may be good intent to protect flight students, these regulations, as written, will certainly do more harm than good for the industry. AOPA specifically pointed out that the financial burden of these regulations would be insurmountable for many flight schools and could lead to the swift closure of numerous training operations and leave many instructors out of the job—and students without a place to train.
The bureau reminded those in attendance—ranging from long-time flight school owners to newly minted CFIs—that this bill has been signed into law and that the associated fees are set by statute. However, AOPA urged the bureau to exercise its regulatory latitude to at least push back the registration deadline for schools from Aug. 1 of this year to Jan. 1, 2011, to give AOPA and flight school operators more time to work with the legislature to work out a fix—a decision that will be considered by the bureau in the coming days.
“It has become clear from our meetings with legislators that their sole intent was to protect students financially, and they clearly did not anticipate the potential damage of this regulation,” said AOPA California Representative John Pfeifer. “So it is our hope that we can now buy some time to work out a more reasonable solution before any damage is done. While AOPA certainly supports the idea of some measured accountability to protect students from the very small minority of flight operations with unscrupulous business practices, this regulation is clearly not the most effective way forward.”
According to the bureau, as it stands now, all flight schools will be responsible to file by Aug. 1 or risk non-compliance. It is still not clear whether individual flight instructors will be expected to follow suit. AOPA will continue to provide updates as this issue develops.