Students who apply with cosigners generally receive lower interest rates and can finance a larger portion of tuition costs. Essentially, as a cosigner, you agree to pay the student’s loan payments if he or she for some reason does not. Usually a family member or friend will sponsor a student’s airline pilot career financing. Having a cosigner qualifies the student for the following benefits:
- Higher loan amount–up to full tuition.
- Lower interest rate.
- Establishment of good credit history for the student.
You can gain the maximum benefit of having a cosigner on the loan when the cosigner has a 640+ credit score. Applying with a cosigner reduces risk for the lender, therefore these applicants are eligible for rates as low as 4%.
ATP's primary lenders, Sallie Mae and Wells Fargo, offer flexible repayment options after the traditional 6 month post-school grace period has been exhausted. Sallie Mae offers Graduated Repayment, which allows for 12 months of interest-only payments before the loan enters full repayment. Wells Fargo offers up to 24 months of forbearance (no payments required) while flight instructors are building to 1500 hours of total time required to be hired by the Regional Airlines. These repayment plans give ATP's graduates the ability to earn a salary as an airline pilot (and in many cases secure a signing bonus) before making full payments.
Most lenders offer a cosigner release option. After making as few as 12 consecutive on-time principal and interest payments, the borrower may request that the lender remove the cosigner from the loan entirely as long as the borrower has sufficient credit individually. After achieving a regional airline pilot job, it may be possible to refinance the loan at a lower rate and without a cosigner. Wells Fargo and Citizens Bank will work with ATP Graduates to refinance their loans.
If a student discontinues training with ATP, the refund will be issued directly back to the lender, not the student. This minimizes interest expense and protects the cosigner. A student may choose to discontinue the program at any time, for any reason.
Additional Benefits for the Cosigner
As a friend or relative of an airline employee, you can often take advantage of airline-employee friend/family benefits, including:
- Free and/or discounted airline travel, including First Class
- Vacation discounts
- Auto-rental discounts
- Hotel discounts
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