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Debt Diary: How a New Pilot Manages $116,000+ in Loans

Jan. 28, 2019
Loans, Student Loans
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Debt Diaries is a series about how student loan borrowers save, spend and pay off debt on a daily basis. Want to share your story? Email debtdiaries@nerdwallet.com for details.

Andrew Hoyler dreamed of being a pilot, and he was determined not to let money get in the way.

As the oldest of five children, that meant paying for college on his own. He attended Purdue University, where the estimated annual cost of attendance for out-of-state students is about $42,000.

Hoyler secured scholarships and graduated in three years with a Bachelor of Science degree in professional flight. But he still had to take on college debt. He borrowed federal student loans and signed up for an income-share agreement, pledging a percentage of his future income for a set period of time in exchange for education funding.

Now Hoyler is a pilot. Money challenges aren’t in his past: Payments on his student loans and income-share agreement consume about a third of his income.

But he’s making it work. Here’s how Hoyler, 22, manages his six-figure debt on an income of about $3,000 a month.

» MORE: How to pay off $100,000+ in student loans

The payoff strategy

Hoyler is a first officer — a co-pilot — at PSA Airlines, a regional subsidiary of American Airlines. He’s based out of Reagan National Airport near Washington, D.C., but he’s on the road — or in the air — for two to four days at a time, several times a month.

He’s at the bottom of the totem pole, but Hoyler’s lifestyle choices and job benefits make his entry-level wages manageable.

Most notably, Hoyler lives with his parents rent-free in Northern Virginia. He can’t afford not to, he says.

“I’d love to move out and have my own place,” Hoyler says. “But right now, it’s just not economical.”

Hoyler earns an hourly rate of $39.27 for every flight hour he works, from when the doors close until the plane arrives at the gate. He gets paid for a minimum of 75 hours each month, even if he flies fewer hours. But he doesn’t get the hourly rate during layovers, while preparing in the cockpit or at the company-paid hotel between flights.

He does, however, get a per diem of $1.80 for every hour he’s traveling for work. Additionally, he stays at company-paid hotels when he’s on the road and sometimes earns loyalty points for his stays. The points translate into perks like free meals and club lounge access.

With housing expenses out of the picture and food costs largely offset, debt payments are Hoyler’s biggest expense. He has about $101,000 in student loans, and about 8% of his income goes toward his income-share agreement. Together, those payments cost about $1,000 a month. He also has a $15,000 car loan with a $350 monthly payment.

Generally, NerdWallet recommends limiting college borrowing such that student loan payments don’t exceed 10% of after-tax income. But Hoyler’s budget works for him because he has significantly reduced food and housing costs. Use a student loan affordability calculator to estimate the amount of student debt you can comfortably afford.

Hoyler logged his purchases during a week in early January. Here’s what a few typical days of spending look like for him.

Diary entries have been edited for clarity and length.

Day 1: Platinum-level perks

Total spending: $4.24 for two sausage biscuits.

Monday morning I am assigned what is called “airport reserve,” meaning I have to be present at the airport in case of a last-second pilot cancellation. My shift begins at 5:30 a.m. and goes until 1:30 p.m. I left the company-paid hotel before breakfast was served, so I had to settle for another airport breakfast. I chose Chik-Fil-A, as it was a cheap and easy meal, plus the perk of a 10% discount for being an airport employee.

I end up not getting used by the airline, so I head back to the hotel and take a nap. I wake up around dinner time. Thanks to Platinum-level status with Marriott, I get a free dinner in the club lounge consisting of chicken kabobs, fruit and veggies. We do not always get to keep the points for when we stay in hotels, but we are lucky with some chains that do offer it to us.

» MORE: Best travel rewards credit cards in 2019

Day 3: Flying as a passenger

Total spending: $96.93 for rental car, lunch, drinks and parking.

Today I am flying as a passenger to Indianapolis to have dinner with Purdue University’s president, Mitch Daniels. [The event was a celebration of Purdue’s income-share-agreement program, which launched during the 2016-17 academic year and is called Back a Boiler.]

I am lucky enough to be upgraded to first class, which allows me to have some good snacks to hold me over for a bit. I land in frigid Indiana and head to the Hertz Gold Member Zone. Since I have USAA car insurance, they waive the underage driver fee, which has saved me hundreds of dollars over the years.

I head to Purdue, where I meet one of my best friends for lunch. We have been getting lunch every month for 14 months now, despite not living in the same place. We try to go to a new city every month, but sometimes we have to stay local, as he is finishing his senior year. It is my month to choose the restaurant and pay.

I head to a local bar where I meet another good friend for a drink. I don’t ever carry cash with me — I put everything on credit cards with good benefits, such as cash back, and pay it off in full every month — so I offer to pay for his to cover the $10 card minimum. After my free dinner with Daniels, I head to a third friend’s apartment to stay the night, instead of spending $80 for a hotel.

Day 5: Avoiding the toll road

Total spending: $0

Lots of meetings today! [Hoyler is running for school board in his local district. As he prepares for the election in November, he’s been meeting with administrators and constituents.]

After a quick breakfast at home, I knock two meetings out before lunch, which I decide will be Panera. I have a gift card, so the lunch ended up not costing me anything, and I still have $5 left to spend. I eat dinner with my family before heading back to D.C. before my 5 a.m. start time tomorrow morning. I almost take the toll road, but decide against spending the $5 to do so, and drive an extra eight minutes. They recently raised the rates by nearly $2 each way, which just isn’t worth it when there is no rush-hour traffic. I go all day without pulling out my wallet.

Andrew Hoyler’s budget

Income
WagesAbout $3,000/month
Per diem$1.80 for every hour away from home.
Expenses
Rent$0
Student loans$1,000/month
Car loan$350/month
Health insurance$168/month for medical, dental and vision
Savings
EmergencyAbout $7,000
Retirement$0

Photo courtesy of Andrew Hoyler.

About the author