The Flight School Closed. The Loan Didn't. | EP 59

<p>A parent takes out a home-equity line.</p><p>A student wires tens of thousands of dollars to a flight school.</p><p>The school has experienced instructors, airline partnerships, manufacturer affiliations, national press coverage, and every outward sign of credibility.</p><p>Then the school closes.</p><p>And the money is gone.</p><p>In this episode we look at the financial structure behind prepaid flight training—and why students and families may be taking on far more counterparty risk than they realize.</p><p>If you prepay $50,000, $80,000, or $100,000 for training that will be delivered over months or years, you are not just buying lessons.</p><p>Economically, you may be making an unsecured, interest-free loan to a private company.</p><p>And unlike the aircraft, instructors, maintenance, certificates, and checkrides, the money itself may not be protected by the FAA.</p>In this episode:<ul><li>The FLYT Aviation case in Georgia, where authorities allege that more than 70 students lost over $500,000 from prepaid accounts, scholarships, and financing programs</li><li>Why Jason says the defendants are entitled to their defense</li><li>Four flight-school failures or closures discussed across roughly 12 months, across Georgia, Texas, Missouri, and Florida</li><li>Why students can become unsecured creditors when a school fails</li><li>How a change in ownership can expose a gap between student account balances and the cash actually backing them</li><li>Why airline partnerships, manufacturer designations, experienced instructors, and national media coverage can create a “prestige halo” without telling you where your money sits</li><li>Jason’s criticism of the pattern he describes as: <b><strong>“Promote on the way up. Report on the way down.”</strong></b></li><li>Why the FAA regulates the training but not necessarily the prepaid balance</li><li>The economics of America’s aging trainer fleet—and why a school may be operating 40-, 50-, or nearly 60-year-old aircraft with extremely high airframe times</li><li>A nine-aircraft trainer fleet Jason is currently appraising, including aircraft with roughly 11,700 to 18,000 hours and multiple engines at or around TBO</li><li>Why the cost of a new trainer makes replacement difficult for many schools</li><li>How prepaid student balances can become part of a school’s working capital—funding airplanes, overhauls, payroll, and expansion</li><li>Why that same structure can become dangerous when enrollment slows, ownership chang