Testimony of Michael Mower, Chief Operating Officer of Upper Limit Aviation before the Senate Committee on Veterans’ Affairs for the Hearing on Pending and Draft Legislation – September 16, 2015

Chairman Isakson, Ranking Member Blumenthal, and Distinguished Members of the Committee:

Thank you for the opportunity to submit a written statement on the draft legislation related to VA education benefits for flight training that is the subject of this legislative hearing today.

Put simply, the draft bill before you today will slash veteran benefits for degree programs that include flight training at public colleges and universities.

This bill, as currently written, would cap the tuition for flight training at a number that is significantly below the actual cost to provide the training.

Although the Department of Veterans Affairs (VA) consistently lists aviation as a high demand career, this proposal would essentially serve as a financial impediment for veterans seeking a career in the aviation industry while the U.S. faces of one of the worst pilot shortages in history.

The intent of this bill is to prevent schools from taking advantage of GI Bill reimbursements. However, it is ill-conceived and duplicative, since valid and effective rules and regulations already exist that curtail potential abusesby schools seeking to take advantage of student veterans and the taxpayers.

In the end, this legislation will destroy well-planned degree programs at public institutions of higher learning across the country that offer flight training to deserving veterans and will eliminate aviation careers for veterans in an industry that is in desperate need of well-trained pilots.

Pilot Shortages

Demand for pilots will increase at a rapid pace over the next several decades, as the United States is currently facing its worst pilot shortage since the 1960’s. [1]

As global economies expand and tens of thousands of new aircraft come online, the aviation industry will need to supply more than 500,000 new pilots by 2033. [2]

Nevertheless, total pilots holding Federal Aviation Administration (FAA) certificates fell at a CAGR of 0.36% from 2004-2013 (see chart, “FAA Estimated Total Pilots”) [3]

In 1989, a total of 110,541 FAA flight tests were conducted in the United States, compared to only 42,440 FAA flight tests in 2014. [4]

Adding to the pilot shortage will be the aging U.S. pilot population, as pilots over the age of 50 years old currently hold approximately 42% of FAA pilot certificates (see chart, “FAA Certificates by Age”) [5]

Moreover, a study conducted by a subgroup of collegiate aviation researchers, including professors from Embry Riddle and 5 other universities [6], explains that a sharp increase is occurring in the training of foreign pilots in the United States.

Using data provided by the FAA’s certification branch, the study determined that in 2004 the ratio of U.S. citizens to foreign citizens training in the United States for their commercial pilot certificate was 4.80 to 1.00. In 2012, that ratio had dramatically declined to 1.19 U.S. pilots trained to every one foreign pilot trained (see chart, “US and Foreign Citizens Completing the Commercial Written”).

This fact is staggering because many of these foreign pilots will take jobs outside of the U.S., further intensifying the current pilot shortage.

The 85-15 and Two-Year Rules

The “85-15” and “Two-Year” Rules are valid exercises of Congress’ power intended to curtail abuses by schools seeking to capitalize on veterans and American taxpayers.

While the Two-Year Rule bars VA education dollars from going to institutions that have been open for less than two years, the 85-15 Rule prohibits VA education dollars from going to schools unless at least 15% of enrolled students are not using GI Bill funds to pay for the cost of their education at the school.

These rules have been in place for decades, and when enforced correctly and consistently by the VA, the rules effectively allow the open market to determine worthwhile and valuable programs – and program prices – for veterans.

This bill, which seeks to artificially and arbitrarily legislate a cap on flight training, is unnecessary and flies in the face of the longstanding and legitimate purposes of the 85-15 and Two-Year Rules.

Congressional Budget Office (CBO) Report

The sponsors of this legislation in the House of Representatives believed that imposing a cap on flight training education for veterans would generate sufficient savings to pay for other favored legislative initiatives. However, based on CBO’s subsequent score of the overall bill, those assumptions were grossly inaccurate and the assumed savings from rolling back this benefit fell short by nearly $150 million.

The same CBO cost estimate for the bill also recognized that aviation training necessarily has a high cost of delivery, stemming from the costs of aircraft, fuel, insurance, and rigorous FAA-imposed safety standards.

CBO itself determined that reasonable flight training costs averaged out to around $62,000 per year, per student. But the cap proposed by this draft is nearly one-third of the real cost for student veterans to receive this type of advanced professional aviation training.

Conclusion

Mr. Chairman, this bill as currently proposed will not only eliminate benefits and aviation career opportunities that were earned through honorable service by veterans, but it will also exacerbate one of the worst pilot shortages in the history of the United States.

The bill is also duplicative and unnecessary, as the 85-15 and Two-Year rules are already valid and effective tools for reigning in abusers within program of education.

There is simply no need for additional legislative action on this topic. The VA merely needs to consistently enforce the long-standing and valid statutes and regulations currently in place that already effectively deal with the issues and concerns that have been raised.

Thank you again for the opportunity to share our views with the Committee.

[1] Wall Street Journal

[2] Boeing Study

[3] FAA Airmen Certificate Statistics

[4] FAA Designated Pilot Examiner (DPE) Program Under Watch

[5] FAA Airmen Certificate Statistics

[6] An Investigation of the United States Airline Pilot Labor Supply

Get Started With Your Flight Training Today

You can get started today by filling out our online application. If you would like more information, you can call us at (844) 435-9338, or click here to start a live chat with us.