Repaying Air Traffic Controller Student Loans with PSLF and Other Alternatives

Air traffic controllers are the hidden puzzle piece in keeping the world’s airways safe. Approximately 14,000 air traffic controllers serve more than 45,000 flights and 2.9 million passengers across more than 29 million square miles of airspace every day, according to the Federal Aviation Administration (FAA).

That’s a lot of responsibility.

Fortunately, air traffic controllers (ATC) are compensated well, with a median salary of $130,420 in 2020. However, some air traffic controllers might also have significant student debt.

If you attended an AT-CTI school (Air Traffic-Collegiate Training Initiative) with a two- or four-year non-engineering aviation degree, you might’ve fast-tracked your career. Conversely, other air traffic controllers might’ve pursued different education and training paths that eventually led them to an ATC career.

Read to learn how air traffic controllers can benefit from loan forgiveness programs and other strategic repayment options.

Loan forgiveness options for air traffic controller student loans

If you have federal student loans, your role as an air traffic controller could put you in a great position to receive student loan forgiveness.

Public Service Loan Forgiveness program

The vast majority of air traffic controllers are employed by the FAA, an employer which qualifies for the Public Service Loan Forgiveness (PSLF) program. PSLF allows for tax-free loan forgiveness after 10 years of qualifying payments.

Eligibility requirements include:

• Working full-time for a qualifying employer (e.g. nonprofit organization of a federal, state, local or tribal government).
• Having eligible Direct Loans (or have consolidated other federal loans into a Direct Loan).
• Making 120 qualifying payments under an income-driven repayment (IDR) plan.

However, not everyone who has air traffic controller student loans ends up in their intended position.

If you work in an air transportation support role or are otherwise employed with an alternative PSLF qualifying employer, you might still qualify for PSLF forgiveness.

IDR Waiver: A limited-time opportunity

Although the traditional PSLF program has certain nuances that resulted in application denials in the past, current and former air traffic controllers can benefit from applying for the IDR Waiver.

This limited-time opportunity has many benefits that could impact borrowers, including:

• Increased qualifying payment count if you have applied or will apply for PSLF.
• PSLF credit if you have 12 or more months of consecutive forbearance or 36 or more months of cumulative forbearance if you certify working for an eligible employer.
• Automatic changes — no need to apply to receive the benefits.
• FFEL borrowers can get PSLF credit if they apply for consolidation by June 30, 2024.

Current and former air traffic controllers with federal student loans should immediately explore the IDR Waiver. This will ensure you receive any additional qualifying PSLF payments before it expires.

Income-driven forgiveness

If you have air traffic controller student loans but aren’t eligible for PSLF, you can still pursue federal loan forgiveness. But it’ll take a lot longer.

Income-driven repayment allows for taxable loan forgiveness after 20 to 25 years of repayment, depending on the plan and your loans. However, you’ll also benefit from a lower monthly payment that is based on a percentage of your discretionary income.

The most popular IDR plans include:

• Income-Based Repayment (IBR). Provides forgiveness after 20 to 25 years (depending on when the loan was disbursed) and is based on 10% to 15% of income.
• Pay As You Earn (PAYE). Provides forgiveness after 20 years and is based on 10% of income.
• Revised Pay As You Earn (REPAYE). Provides forgiveness after 20 years (undergraduate loans) or 25 years (graduate school loans) and is based on 10% of income. This plan also includes robust federal subsidies that help cover the cost of unpaid interest.

There’s also an Income-Contingent Repayment (ICR) plan which is based on 20% of your income or a fixed amount over 12 years, whichever is less.

However, low IDR monthly payments will cause your loan balance to balloon. So, IDR forgiveness isn’t always the best option if you can afford to pay back your student loans without aiming for a 20-year (or more) timeline.

Repayment options for private student loans

Many ATCs might have air traffic controller student loans from private lenders. Unfortunately, private student loans don’t qualify for PSLF or IDR forgiveness. But that doesn’t mean you're stuck with your current interest rate with no relief.

Refinancing air traffic controller student loans

If you have private loans, then refinancing is the way to go. By refinancing your air traffic controller student loans, you can lower your interest rate or monthly payment — or potentially both. You can also score a nice cash-back refinancing bonus each time you refinance.

However, if you have federal student loans, you’ll need to evaluate the pros and cons of refinancing before moving forward. By refinancing with a private lender, you’ll lose access to federal benefits, like IDR plans, forbearance and deferment options, and loan forgiveness programs.

Employer student loan repayment

A recent survey by the Employee Benefit Research Institute found that nearly half (48%) of the companies surveyed offer or plan to offer student loan debt assistance to their employees. In comparison, only 32% responded similarly in 2018.

As companies and workplaces compete to attract and retain talent, student loan repayment assistance programs will likely become more commonplace. Even if your employer doesn’t currently offer this benefit, it’s something that could still be on the horizon.

A quick scan of the benefits offered to all FAA employees doesn’t currently include a student debt repayment assistance program. But if you work elsewhere or plan to move on from your ATC career, it’s an option that’s worth exploring with your current or future employer.

Get a plan to repay air controller student loans

There are numerous student loan repayment strategies and loopholes that can help lower your student loan payment and maximize your overall financial well-being. But pursuing loan forgiveness or figuring out the best overall repayment strategy isn’t always straightforward.

Our team of student debt experts uses a holistic approach to analyze your finances and student loan repayment options. Schedule a flat fee consultation with a member of our team to receive a customized repayment plan for your air traffic controller student loans.