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A "Key" Development in the Case of Silver State Helicopters
For a long time we have known that KeyBank has played a leading role in aiding and abetting the efforts of sham for-profit trade schools to scam vulnerable students. What we didn't realize, however, was the integral role that KeyBank played in fueling the growth of Silver State Helicopters, an unlicensed and unaccredited Nevada-based flight-school chain that left its 2,500 students in the lurch when it shut its doors without warning on Super Bowl Sunday and filed for bankruptcy liquidation. Most of these students are now stuck having to repay nearly $70,000 in high-cost private loan debt for training they did not receive.
Thanks to a class-action lawsuit filed by several former Silver State students in California, we recently learned that KeyBank was Silver State's exclusive private student loan provider from 2002 to 2005, a time when the flight-school chain grew by "an astounding 2,786 percent." KeyBank appears to have severed its ties to Silver State in 2005, forcing the flight-school chain to find other lenders to provide private loan funds to its students. As we previously reported, Silver State then forged an exclusive arrangement with the infamous Student Loan Xpress and the Pennsylvania Higher Education Assistance Agency (PHEAA), to make and service the loans.
KeyBank's involvement with Silver State is far from the first time the Cleveland, Ohio-based national lender has assisted the efforts of sham trade schools to scam students.
These practices first came to light several years ago when dozens of unaccredited computer training schools unexpectedly shut down, leaving their students with heavy private loan debt. Just like Silver State, these schools (owned by now-defunct chains such as Ameritrain, Solid Computer Decisions, and The Academy Schools, among others) had forged sweetheart deals with KeyBank and the student loan giant Sallie Mae to provide their students with tens of thousands of dollars of private loans to cover the full cost of tuition before any classes were provided.
In a 2003 article in the trade journal The Consumer Advocate, the consumer lawyer Tom Domonoske explained how the easy availability of private loans helped disreputable schools thrive by allowing them to attract students without having to worry about enrolling in the federal student loan programs and the government regulation such participation entails.
Under pressure from consumer advocates and some state regulators, Sallie Mae eventually agreed to provide some repayment relief to the students left in the lurch after these computer schools unexpectedly shut down. KeyBank, on the other hand, has vigorously (and often successfully) resisted shafted students' demands for debt forgiveness for classes they never attended. In doing so, the corporation has systematically denied borrowers basic protections that are in federal law to safeguard consumers from the most predatory practices of lenders.
Now it turns out that KeyBank's focus has not just been on providing liquidity to unlicensed and unaccredited computer schools but also to unregulated flight schools as well. Silver State appears to be only the tip of the iceberg. According to the class-action lawsuit, KeyBank provided private loans to students attending the Makarion Institute of Aeronautics, as well as the Sierra Academy of Aeronautics and Airman Flight School in Norman, Okla. -- all of which shut down unexpectedly, leaving students with a heavy debt load and without the training needed to become certified pilots.
As part of the class-action lawsuit, lawyers for the Silver State students accuse KeyBank of violating the federal Racketeer Influenced and Corrupt Organizations (RICO) Act by using the "U.S. mail and wires" to engage "in a deliberate pattern and practice of aiding and abetting fraudulent vocational schools that aggressively induce students into obtaining loans with KeyBank."
We do not know if this line of argument will prevail. But at Higher Ed Watch, we firmly believe that federal and state regulators, as well as policymakers, need to understand the essential role KeyBank played in the proliferation of sham schools, and the harm that the bank, in providing liquidity to these disreputable schools, has done to countless low-income and working-class students who were just trying to better their lives.
In future posts, we will take a closer look at the tactics that KeyBank and other private-loan providers have used to erode key consumer protections for borrowers. Stay tuned.
SSH & NPA are they the same?
In reference to Silver State Helicopters... I have noticed a new name taking over many of the former SSH locations... They call themselves "National Pilot Academy, and offer "promises of making you an airline pilot." At least in the Tampa area they have had radio spots with the same theme as the former SSH. Sounds all too familiar and would not surprise me if it has ties to Jerry Airola. Something to look at... the website has no phone number and no names of company or school personnel. They have canned photos on web. I drove by the "open house" hanger... a couple of cessnas... 152 & 172. Hmmm... A real airline pilot's dream ship. Where's the multiengine rating training aircraft? The aircraft registration numbers are for someone else.
National Pilot Academy is in
National Pilot Academy is in no way affiliated with Silver State we have been in business for 10 years and have numurous airline contracts with regional airlines that we have been supplying pilots for the last several years. NPA's Founders are corporate Pilots and Master CFI's With over 100 years of aviation experience between them. NPA does not train or ever has trained in Helicopters It is insulting to think that we would ever be compared to that helicopter school who had no connections for future employment of any of its graduates other then working for them as Instructor. I am glad I can clear this up for those reading this blog
National Pilot Acadamy IS
NPA might not be affiliated with Silver State but they might as well have been cast from the same mold. There are a lot of similarities they both seem to possess.
This company doesn't seem to be very liquid anymore, you can figure this out by the fact that their CFI's have said they have trouble getting reimbursements and the fact that their aircraft fuel cards are often maxed out. NPA boasts about all their "affiliations" with airlines and their "connections" for future employment. They'll guarantee you a job (as one of their overworked, underpaid, CFI's) or maybe an interview with a regional airline. I can get an interview with a regional airline off the street so how are they helping you get a job?
Check the BBB on this company and see their many complaints about tuition, non payment of refunds, contract issues etc. Check the company history and try to figure out why the owners changed the name. Just use some common sense about their ads and the time it takes to become a pilot.
Do you even want to be the type of pilot that took no time to "earn" your licenses, the type of pilot that won't know what he or she is doing during an emergency? Ask some hard questions of them and their students. Just ask how many of their "complex" aircraft have been landed gear up by their students and instructors. Ask why one of their ex assistant cheif instructors continued to fly their 172 trainer after taking a bird strike that caused significant aircraft damage. Ask about how he got all his credentials pulled by the FAA for this. Does this sound like quality training?
Big smoke, high pressure, shoulda been car salesmen are all these guys are. Be careful with them. Just because they have 100 plus years of aviation between them doesn't make them good, and just because they've been in business 10 years doesn't mean they will be for another 10. If you're thinking about going there, just do some research and compare with other schools and decide for yourself. It's only common sense.
Makarion
Anyone out there involved with Makarion and Keybank with any updates? If so, lets blow this up with the help of Oprah or anyone else that wants to make the public more aware of the illegal practices of Keybank.
Ditto
Three other students and I are involved in a class action law suit against NPA as we speak. Currently we are trying to get our tuition refunded to us, after they tried to force us into employment contracts that we refused to sign. They still owe me roughly $20,000 and they've completely screwed my life over with useless training in outdated aircraft. Along with all of that, I now owe $80,000 dollars worth of non-dischargeable private student loan debt.
Going to this school is like committing financial suicide. By the way I thought I'd mention and confirm that they did change their name from PFI (professional flight academy) to NPA after one student was killed flying into a mountain alone in the middle of the Nevada desert on his first solo flight. YOU DECIDE!
Lawsuit
Are you still involved with the lawsuit? I'd join. E-mail me.
Aviation Flight Schools who Promise education & dont deliver
Anyone who has or is in the process of sueing Key Bank. I have a signed petition presently 10,000 signatures of pilots and citizens regarding vocational loans that have been screwed over by a flight school or Key Bank. Please email me together we can take this to Washignton, DC and change the laws Key Bank MUST BE STOPPED. ALL OF THE STUDENTS BOTH PAST AND PRESENT CAN MAKE A DIFFERENCE WE MUST WORK TOGETHER.
Silver State Helicopters
Is anyone reading this blog updated on the class action against Silver State Helicopters? I was left in massive debt by them and received a letter about the middle of last year that my student loan account was frozen and not incurring additional interest in the time being. Any info would be greatly appreciated on the status of the law suit.
New Article about Silver State on Rotor & Wing Mag March-09
Wow !!!
Very revealing article on Rotor & Wing magazine about Silver State Helicopters (SSH).
Straight from the VP of Training's mouth.
Man this is the kind of info we needed. Get a copy of this months mag and copy it and then give it to your attorney.
Rotor & Wing magazine March 2009
Pages 50-53
NPA/PFI
Over 100 years experience at NPA? What? This place is run by a bunch of high school grads. I'm not sure one of them has a degree in anything much less aviation or business management. This place is a rip off and I am happy to hear that National Pilot Academy just closed their doors! IT'S ABOUT TIME! I hope these guys do time!
SILVER STATE HELICOPTERS & SLX/AES
Great article in R&W mag this month with an interview with the VP of training himself. Very revealing!
I too am in debt for nothing thanks fo SSH & shady lending practices of SLX.
Unless you were an expert on the Truth In Lending Act and the Fair Credit Reporting Act, you wouldn't have known you were being duped by SSH & SLX. Laws were violated and rules were broken and rights were stomped on.
One thing I know for sure now, SLX wants us to go away. They suspend your account now while the dust settles and you get comfortable then when they think the coast is clear, they will hit you with your payment terms and demand repayment.
Don't let up, don't get frustrated. Even if you have no financial stake or employment as a pilot at stake. We need to seek justice for all.
Make sure your point of contact for SSH students knows how to reach you, make sure the Bankruptcy court & trustee have your current info. Don't let up. Write to your congressman, senator, atty general, etc... stay on it!
ssh/slx whats going on?
is there any new info on the case against SSH and SLX? i read last week in the ny times how key bank had a role in a florida flight school that closed and the students got left with the mess. the students fought hard and finally got key bank to forgive there loans. please note this was a different flight school. we need all to stick together this was a ponzi scheme for sure.
sham for profit flight school loans
I enrolled at premier helicopters in broomfield colorado in nov 2004. At the time, they operated under the name universal helicopters which is headquartered in Scotsdale AZ. Premier was more than happy to provide all the necessary documents to get me an $80,000 loan with Key Bank and when Key severed ties they then were more than glad to get me any thing more I needed through salie mae. Also they had me deposit my money with Pilot Career foundation in Orem Utah under the premise that pilot career worked with Utah valley state college and I would get an aviation degree and Pilot career would hold the money and disburse to premier heli as premier needed for my training.
I was going to school at Premier part time and so it took me till July of 2005 to get ready for my private check ride. About that time I was preparing to go to Iraq and Premier knew this and was making preparations to get me an examiner for my checkride. Well I was to leave for Iraq in one week and Premier claimed they could not find an examiner but knew of one in Kansas City and was sending 2 other students there for a check ride and when they got to kansas city would let me and the owner of Premier know if the examiner could or would do my checkride. Never heard another word from that instructor and Premiers owner was coveniently gone and did not answer his phone all that week so I left for Iraq with no checkride. A year later I came back from Iraq and approached Premiers owner who informed me "you're barking at the wrong dog." By the way the week before I went to Iraq I also got married and when I got back moved to CA soon after Learned premier was opening schools all over the place Colorado Springs CO someplace in Texas I believe and one in AZ. I guess their eyes were bigger than their wallets because after calling Broomfield and Colorado Springs I got a disconnected number and their website no longer works. I have learned from other sources they are out of business and they have had their helicopters repossesed.
Well that leaves me with a loan for $80,000 plus interest THAT IS CURRENTLY HELD BY GREAT LAKES. Oh yeah werent they also named in the silver state case. Yes that's what I thought. and I only have my private license which I got in half the time in Long Beach at Los Angeles Helicopters-- A VERY REPUTABLE COMPANY IN EVERY ASPECT I WOULD HIGHLY RECOMMEND LA HELICOPTERS TO ANYONE.
These rippoff practices by sham artists must stop and we the students (victims) in this ponzi scheme must be forgiven of these debts as they were presented to us by companies that had less than professional desires at the expense of thousands of students just looking for a better life and an education that allows for that. I am glad I found this site it will definitely be helpful for my attorney.
KeyBank and Pilot Career Foundation
I am also a victim of these scam artists. I also went to a school in livermore, CA that only left me with a private and an Instrument rating that now is costing me 80,000 dollars. Please reply to cs_math@hotmail.com to see if we can unite and fight these bastards. Please, anyone with information on a lawsuit reply to the above address.
-Fernando
Stockton, CA
Silver State victim
I was enrolled in Silver State Helicopters in New Braunfels, Tx. My loan was thru Key Bank, I did not get any certifications when they closed their doors, I figured that I could financially ride it out until the end of the bankruptcy hearings without any lawyers...I was wrong and at the bottom of a financial mess, is it too late to get in with any of the class action suits in Texas to get my account froze until the end of this thing?...Any recommendations would be appreciated greatly.
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