U.S. Department of Transportation

FEDERAL AVIATION

ADMINISTRATION



## REGULATORY EVALUATION

FINAL RULE

Student Pilot Application Requirements

(14 CFR 61 and 183 )



## OFFICE OF AVIATION POLICY AND PLANS

ECONOMIC ANALYSIS DIVISION

Esther Barto and Brian Seym our

APO

- 300

November 201 52 

### Table of Contents

**I. Executive Summary** 

................................ ................................ ................................ .......................... 3

**II. Introduction/Background** 

................................ ................................ ................................ ............... 5

**III. Assumptions, Calculations, and Data Sources** 

................................ ................................ ......... 8

**IV. Benefits** 

................................ ................................ ................................ ................................ ......... 10

**V. Costs** 

................................ ................................ ................................ ................................ ................... 11

1. Sensitivity Analysis

................................ ................................ ................................ .......................... 23

**VI. Discussion of Alternatives** 

................................ ................................ ................................ ......... 26

**VII. Benefit** 

**- Cost Summa**  **ry**

................................ ................................ ................................ ................ 293 

### I. **Executive Summary**

Currently, most student pilots are issued a combination student pilot /medical certificate by an

Aviation Medical Examiner (AME), then they are vetted against the terrorist watch list s by the

Tran sportation Security Administration (TSA)

. This final rule requires applicants to apply for a

student pilot certificate with an aviation safety inspector (ASI) or aviation safety technician

(AST) at a Flight Standards District Office (FSDO) , designated pilo t examiner (DPE) , airman

certification representative (ACR) associated with a part 141 pilot school, or certified flight

instructor (CFI)

. AMEs will no longer issue a combination medical certificate and student pilot

certificate. Student pilot certificates will be issued on the same medium as other pilot certificates

and will have no expiration date . All student pilot certificates issued before the effective date of

this final rule will expire according to their terms unless they are replaced by another pil ot

certificate.

This final rule responds to section 4012 of the Intelligence Reform and Terrorism Prevention

Act (IRTPA) and facilitates security vetting of all student pilot certificate applicants before the

FAA issues a student pilot certificate

. This f inal rule withdraws the propos al for pilot certificates

to include a photo graph of the individual pilot. Section 321 of the FAA Modernization and

Reform Act of 2012 supersede s section 4022 of the IRTPA , which provide d the basis for the

proposed rule. The F AA intends to propose a rule to implement section 321 (RIN 2120

- AK33)

. Additionally, t his rule withdraws the propos al to implement fees for student pilot certificates and

the FAA intends to propose a rule to implement fees under section 122 (RIN 2120

- AK37)

. The FAA expects about 500,000 original applications and replacements for student pilot

certificates between 201 5 and 202 4 , given future projected growth in the student pilot category.

The three groups affected by this final rule are the student pilot ap plicants, the FAA

, and4 authorized individuals

. 1 Student pilots will incur costs associated with completing the

application. The FAA will incur the costs of processing these applications. Once the application

is processed, there is a mailing cost for the certificate sent to the student pilot. Offsetting these

costs are the benefits which implement the direction of Congress as stated in s ection 4012 of

IRTPA

. Congress determined that the benefits to society from security vetting prior to issuance

is greater than the quicker security application vetting process.

This final rule will have an effective date of 60 days from the date of publication in the

Federal Register. Current student pilot certificate holders may continue exercising the privileges

of the st udent pilot certificate until the certificate expires according to its existing terms.

This rule will not have a significant impact on international trade, will not have a significant

economic impact on a substantial number of small firms, and will not imp ose an unfunded

mandate.

The estimated compliance cost of this rule ranges from $ 17 to $ 20.9 million . Although the

potential benefits are not quantifiable , t his final rule responds to the direction of Congress in

section 4012 of the Intelligence Reform an d Terrorism Prevention Act (IRTPA) and therefore

provides a sufficient reasoned determination to justify the costs.

1 An authorized individual is an AST or ASI at a FSDO, a DPE, an ACR at a part 141 pilot school, or a CFI who may accept a student pilot certificate application and verify the applicant’s identity.5 

### II. **Introduction/ Background** 

This final rule responds to section 4012 of the Intelligence Reform and Terrorism Prevention

Act ( IRTPA ) and fac ilitates security vetting by the TSA of student pilot applicants prior to the

issuance of an FAA certificate. This action withdraws the proposal for pilot certificates to

include a photo of the individual pilot. Section 321 of the FAA Modernization and Ref orm Act

of 2012 supersede s section 4022 of the IRTPA , which provided the basis for the proposed rule.

On December 17, 2004, the President signed into law Public Law 108

- 458, 2 the IRTPA

. Section 4022 of that law requires the FAA to issue improved pilot cer tificates that are resistant to

tampering, includes a photograph

, and is capable of accommodating a digital photograph, a

biometric identifier, or any other unique identifier the FAA Administrator considers necessary.

In s ection 4012(a)(1) of IRTPA, Cong ress required the TSA, in coordination with the FAA,

to ensure that individuals are vetted against the terrorist watch lists prior to the issuance of an

FAA student pilot certificate

. Currently, student pilots are vetted after they are issued a student

pil ot certificate.

This final rule requires a student pilot applicant to apply for, obtain, and carry a plastic pilot

certificate to exercise the privileges of the pilot certificate issued by the FAA Civil Aviation

Registry prior to exercising the privileges of a student pilot certificate . Additionally, it modifies

the process by which student pilots apply for a certificate. Student pilot applicants will be able to

apply for a certificate using one of the following options:

• A ppear in person at a Flight Standa rd District Office ( FSDO ) before an Aviation

Safety Inspector ( ASI ) or Aviation Safety Technician ( AST ) ;

• T hrough a Designated Pilot Examiner ( DPE ) ;

2 C odified at 49 USC 44903(j)(2)(D).6 • Through an Airman Certification Representative ( ACR ) associated with a part 141

pilot school ; or

• Through a Certified Flight Instructor ( CFI )

.

A ll student pilot certificates will be issued by the FAA Civil Aviation Registry. All those

accepting student pilot applications will be referred to as authorized individuals throughout this

document. In general, t he FA A requires pilots to appear in person since the application involve s
identity verification; an examination of skills or knowledge; verification of records; or a

combination of these requirements. However, the FAA will allow current pilot certificate holder s
to continue exercising privileges of the student pilot certificate until the certificate expires. T his

final rule does not require the holder of a paper student pilot certificate to surrender that

certificate and replace it with a plastic student pilot c ertificate. Student pilot applicants will no

longer be able to obtain paper student pilot certificates at the time of application. If a pilot

certificate is lost, stolen, or destroyed, the pilot may apply for a replacement online or by mail

under current r ules. The majority of those seeking replacements will be due to their student pilot

certificate expiring.

This rule will discontinue an Aviation Medical Examiner’s(AME) authority to issue a student

pilot certificate. Today a student pilot’s first contact with the FAA is usually through an AME

due to the medical certificate requirement.

Currently, there are more than 60 ACRs associated with part 141 schools, over 99,000 CFIs,

about 1,000 DPEs, 3 and FAA personnel at 80 FSDOs. While the DPEs and FSDOs can a ccept

student pilot applications under this rule , the FAA believes

, in practice , that all applications will

be processed by ACRs associated with part 141 schools and CFIs. Each authorized individual is

required to verify the applicant’s identity , verify an y supporting documents

, and submit the

applicable material to the FAA ’s Civil Aviation Registry

.

3 The number of active DPEs fluctuates between 950 and 1,000 over the course of a year, so the FAA is using 1,000 as a reasonable estimate.7 The subsequent sections herein specify the assumptions and data so urces for the analysis

.

Then a n analysis of the benefits and costs to this final rule is pres ented in sections IV and V,

respectively. Section VI discusses the alternative consider ed

, which is similar to the final rule

except that the alternative does not allow CFIs to be a n authorized individual

.8 

### III. **Assumptions , Calculations,**  **and Data Sources**

In t his analysis, the FAA estimates the costs to comply with this rule over a ten

- year period,

from 201 5 through 202 4 . As required by the Office of Management and Budget (OMB), the

present values of these costs are calculated using discount factors of 7 percen t and 3 percent.

Below is the overview of assumptions and data sources:

• All costs are presented in 201 4 dollars

.

• Ten

- year time period of analysis is from 201 5 to 202 4

.

• 7 5 percent of student pilots w ill apply for a student pilot certificate with a Certifie d Flight

Instructor ( CFI ) and 25 percent of them will apply with an A irman Certification

R epresentative ( ACR ) associated with a part 141 school.

• No student pilot applicants are expected to apply for a student pilot certificate with a

D esignated P ilot E xam iner ( DPE ) or a F light S tandards D istrict O ffice ( FSDO )

.

• A range of $1 3 to $ 2 5.22 is used as the h ourly rate of an student pilot ’s time as advised

by Department of Transportation (DOT) guidance

. 4

• $2 3. 59 is the hourly rate for a CFI and ACR associated with a part 141 school

. 5

• $2.00 is the FAA fee for issuing a replace ment pilot certificate

.

• $0. 23 5 is the c ost per mile for an automobile

. 6

4 The lower rate of $1 3.00 is based on the Revised Departmental Guidance on Valuation of Travel Time in Economic Analysis

, Table 4 : Recommended Hourly Values of Travel Time Savings for in

- vehicle local travel

. The higher rate of $2 5.22 is based on median i ncome for all U.S. households in 201 4 ($51, 939 ) reported in U.S. Census Bureau, Table H

- 8. This range is used to estimate the value of personal time forgone by the student pilot to complete an application form and related tasks

. Further, t h ese value s have been grown by 1% for every year past 2014 as advised in DOT Departmental Guidance. http://www.dot.gov/sites/dot.gov/files/docs/USDOT%20VOT%20Guidance%202014.pdf http://www.census.gov/hhes/www/income/data/histo rical/household/

5 From the Bureau of Labor Statistics (BLS), Education, Training, and Library Occupations ( code 25

- 0000 ) in the Air Transportation Industry (NAICS 481200) is assumed to be representative of CFI and ACR occupations associated with this fin al rule

. http://www.bls.gov/oes/current/naics4_481200.htm

6 On December 6, 2013 the Internal Revenue Service (IRS) in Announcement IR

- 201 3

- 95 announced that the mileage reimbursement rate fo r a privately owned vehicle driven for medical or moving purposes is $0. 235 per mile. http://www.irs.gov/2014

- Standard

- Mileage

- Rates

- for

- Business,

- Me dical

- and

- Moving

- Announced9 • 55 miles per hour is the average speed used for calculating time spent traveling by automobile

.

• The FAA will allow a n auth orized individual to charge a fee for its services. 7 The charges

differ for each authorized individual assuming 20 minutes of processing time:

• The FAA assumes that the ACR associated with the part 141 school will charge $ 7. 86

. 8

• T he FAA assumes that the D PE will charge $25 for a n application ( provided in the NPRM)

.

• The FAA assumes that the FSDO will impose no additional charge.

• The FAA assumes that the CFI will charge $ 7. 86

. 9

7 The costs that FSDOs will incur in processing these applications will be part of the overall FAA costs and the FAA will not charge a separate fee for the work done by the FSDOs.

8 The FAA estimates an hourly rate of $ 2 3

. 59 for a n ACR associated with a part 141 school. $ 2 3

. 59 /hr × 20 mins/60 mins = $ 7. 86

. 9 The FAA estimates an hourly rate of $ 2 3

. 59 for a CFI . Calculation: $ 2 3

. 59 /hr × 20 mins/60 mins = $ 7. 86

.10 

### IV. **Benefits**

This final rule responds to section 4012 of the Intelligence Reform and Terrorism Prevention

Act (IRTPA) and facilitates security vetting of all student pilot certificate applicants before the

FAA issues a student pilot certificate

. The FAA notes that following the direction of Congress

provides a sufficient reasoned dete rmination to justify the costs. These potential benefits are not

quantifiable.11 

### V. **Costs**

The compliance costs have three distinct components. The first component is the student

pilot applicant ’ s direct and indirect costs. The second component is the cos ts incurred by the

FAA ’s Civil Aviation Registry to process and issue a student pilot certificate

. TSA will not incur

any additional costs as it already vet s student pilots

. U nder this rule, TSA will conduct the

vetting prior to the issuance of an FAA student pilot certificate

. The third component is for the

mailing expenses incurred by an authorized individual to mail the applications to FAA’s Civil

Aviation Registry.

Costs are calculated as follows :

1) Student Pilot Costs = [(# of Student Pilots (Original) × ($/time to fill out form/student + $/ authorized

individual processing time/student + $/ authorized individual charge/student)] ,
2) FAA Costs = One time Software Costs + (Recurring Costs to issue a Student Pilot

Certificate 10 /student × # of Student Pilots (Origi nal and Replacements)) ,
3) Mailing Costs = (25% × # of Student Pilots (Original)) × Mailing Charges 11 / student ,

4) Total Cost = Student Pilot Costs + FAA Costs + Mailing Costs

.

Student Costs

Under the final rule, an Aviation Safety Inspector (ASI) or Aviation Saf ety Technician (AST)

at a Flight Standard District Office (FSDO) , a Designated Pilot Examiner (DPE) , or an Airman

Certification Representative (ACR) associated with a part 141 pilot school will continue to be

able to accept an application for a student pil ot certificate but will not be able to issue a student

10 Currently, paper student pilot certificates are issued by an AME s and ASI s or AST s at FSDO s . Under this final rule, the recurring costs will cover the FAA’s costs to issue a plastic student pilot certificate by the FAA’s Civil Aviation Registry.

11 Under this final rule, AMEs, DPEs and FSDOs will no longer be allowed to issue student pilot certificates. Since 25 % of new student pilot applicants are expected to go to a n ACR associated with a part 141 school to submit their application, the ACR will mail the application to FAA’s Civil Aviation Registry.12 pilot certificate. In addition, a CFI will be permitted to accept an application for a pilot

certificate. S tudent applicant s can submit their application in one of two ways:

1) S ubmit a paper applicat ion, or

2) S ubmit application electronically ( through the Integrated Airman Certification and Rating

Application ( IACRA ) )

. 12

The FAA encourages authorized individuals to submit applications electronically for the

purpose of accepting a student pilot appli cation

.

There are 2 types of student pilot applications.

• For Issuance of an Original Student Pilot Certificate; and

• Replacement of a Student Pilot Certificate.

An “original pilot certificate” is a certificate that a pilot initially receives as a s tudent pilot. A

s tudent pilot could have request ed a replacement certificate in 201 4 for two reasons : (1) the

student pilot certificate has been lost , stolen, or destroyed ; and ( 2 ) the student pilot needs to

renew the certificate before it expires.

Curren tly, student pilot certificates have a duration of two or five years, depending on the age

or aircraft rating of the student pilot

. 13 For student pilots under 40 years of age, the duration of

their student pilot certificate is 60 months; for student pilots 40 years or older, the duration of

their certificate is 24 months. U nder the rule, current student pilot certificate holders will

continue to exercis e privileges of the student pilot certificate until the certificate expires. T his

final rule does not req uire the holder of a paper student pilot certificate to surrender that

certificate and replace it with a plastic student pilot certificate. Furthermore, this final rule

requires all future student pilot certificates to be issued on the same medium and have the same

12 IACRA is the web

- based certification/rating application that guides the user through the FAA’s airman application process. https://iacra.faa.gov/iacra/ The system helps ensure applicants meet regulatory and policy requirements through the use of various data validation.

13 For student pilots seeking a glider rating, balloon rating, or a sport pilot certificate, the duration of their student pilot certificate is 60 months, regardless of the person's age.13 duration as other pilot certificates , which will eliminate the need for a student pilot to obtain a

replacement certificate due to expiration.

Once t he final rule is in effect, all replacements will be essentially zero by the third year of

analy sis . At present

, student pilots under 40 years of age have student pilot certificate s good for

60 months. The FAA expects nearly all of the student pilots under 40 are using this license as a

stepping stone towards a career as a commercial pilot. Given t he training time and cost industry

rule of thumb of roughly $10,000, the FAA expects most of these students either advance, or

lapse (drop

- off). Thus within the 5 year analysis period, the only reason these students would

need to replace their certificate s is if these are lost, stolen, or destroyed . For those student pilots

over 40 years of age, if they do not advance they will need to replace their certificate once it

expires after 24 months. Therefore, three years after the rule is in effect, there wil l be essentially

no one requesting the FAA to replace their paper certificate.

Table 1a depicts the number of active student pilots and total original and replacements

issued from 2011 to 2014. In 201 4 , there were 1 20,546 active student pilot s with paper

ce rtificates

. 14 O f these 1 20,546 active student pilot s , 49,959 15 (4 1.44 percent of the total)

certificates were issued in 201 4

. Of these paper certificates

, 37,164 (30.83 percent of the total)

were o riginal student pilot certificates issued and the remaini ng 1 2

, 7 90 ( 10.61 percent of the

total) were replacement certificate s. Since t he total number of active student pilots is relatively

stable over the years

, the FAA assumes that the new certificates are offset by an equal amount of

students are leaving the p rogram each year

. The FAA estimates that this offset continues into the

future and these percentages will remain constant during the entire forecast period of this

analysis. This estimate is lower than the average over the historical period which results in fewer

replacements per year into the future. The number of new student pilots is the key driver of

14 FAA U.S. Civil Airmen S tatistics, 201 4 , Table 1, Estimated Active Airmen Certificates Held, http://www.faa.gov/data_research/aviation_data_statistics/civil_airmen_statistics/

15 FAA U.S. Civil Airmen Statistics, Table 16 and Table 17 minus 1,854 since 1,854 is accounted for in Table 16 (49,261

– 1,854) + 2,552 = 49,95914 future costs for this rule. Table 1 b below contains the FAA forecasted number of future student

pilots for the years 2015 through 2024. 16

In 201 5 (the f irst year of the analysis period)

, Table 1b shows the FAA forecasts that there

will be 119,550 active student pilot s

. T able 1a shows that for 2014, there w ere 30.83 percent

original certificates and 10.61 percent r eplacement c ertificates compared to the nu mber of active

student pilots. The FAA believes that this percentage is the best forecast for future original and

replacement certificates. Table 1c shows the number of replacements and the balance of paper

student pilot certificates for years 2015 to 201 7. To obtain the number of original and

replacement certificates issued in 2015 , the FAA multiplied 3 0.83 percent and 1 0.61 percent to

119,550 respectively to obtain 36,857 original student pilot issuances and 12

, 684 replacement s.

Once we subtract the 12, 684 replacements and the 36,857 student pilots that dropped out or

acquired th eir next pilot license, we have a balance of 71,005 paper student pilot ce rtificates

. For

2016, the FAA forecasts that there will be 118,950 active student pilots. In 2016, the F AA

assumes that 30.83 % of the 118,950 active student pilots or 36,672 will drop out or move on to

their next pilot license of those 71,005 left in the balance of student pilot paper certificates

.

10.61%

, or 12, 621

, of the 118,950 forecasted Active Student pilots need replacement certificates.

So for 2017 the balance of Student Pilot Certificates is 71,005

– 36,672

– 12, 621 = 21

, 712 . In

2017 only 21,712 of the 120,546 Student Pilots with Paper Certificates are left. Factoring in the

drop off rate, we are lef t with 0 Paper Certificates in 2017

.

16 Source: Table 30 in “FAA Aerospace Forecasts Fiscal Years 201 4

– 203 4 , U. S. Department of Transportation Federal Aviation Administration, Office of Policy & Plans.” Table 30 has estimated 201 3 year

- end totals for domestic ATP, Commercial, Private, Recreational, Sport, and Student pilots; these totals are based on a report from FAA U.S. Civil Airmen Statistics.15 TABLE 1 a HISTORICAL ACTIVE NUMBER OF FUTURE STUDENT PILOT CERTIFICATES (201 1

– 20 14 )

Year Active Student Pilots Original and replacement certificates issued Original Certificates to Active Student Pilots Replacement Certificates to Active Student Pilots

2011 118,657 58,025 42,005 16,019
2012 119,946 57,042 41,645 15,401
2013 120,285 50,242 37,481 12,762
2014 120,546 49,959 37,164 12,790 *Row and Column calculations may not sum due to rounding

TABLE 1b FORECASTE D NUMBER OF FUTURE STUDENT PILOT CERTIFICATES (2015

– 2024)

Year FAA Forecast

2015 119,550
2016 118,950
2017 118,350
2018 117,800
2019 117,300
2020 116,850
2021 116,500
2022 116,200
2023 116,000
2024 115,80016 TABLE 1c FORECASTED NUMBER OF REPL ACEMENT STUDENT PILOT CERTIFICATES (2015

– 20 17 )

Year FAA Forecast Forecast Original and Replacement Certificates Or i ginal Certificates Replacement Certificates Balance of Paper Student Pilot Certificates

2015 119,550 49,542 36,857 12,684 71,005
2016 11 8,950 49,293 36,672 12,621 21,712
2017 118,350 49,044 36,487 0 0

Table 2 depicts the breakout of the original issuance student pilot certificates, replacements

, and the total number of student pilot certificates affected by this final rule during the 10

- year
time period of analysis.

TABLE 2 NUMBER OF STUDENT PILOT CERTIFICATES

Year Original Replacements Total

2015 36,857 12,684 49,541
2016 36,672 12,621 49,293
2017 36,487 0 36,487
2018 36,318 0 36,318
2019 36,164 0 36,164
2020 36,025 0 36,025
2 021 35,917 0 35,917
2022 35,824 0 35,824
2023 35,763 0 35,763
2024 35,701 0 35,701
Total 36 1 ,7 28 25, 305 3 87 , 033

As previously mentioned, a student pilot applicant can apply for their certificate with an
Aviation Safety Inspector (ASI) or Aviation Saf ety Technician ( AST ) at a n FSDO, a DPE, a n

ACR associated with a part 141 pilot school , or a CFI. Nonetheless, t his analysis assumes that 7 5

percent of student pilot applicants will apply with a CFI, 25 percent will apply with an ACR17 associated with a part 141 school, and no student pilots are expected to apply at an FSDO or

DPE.

Upon submission of the application package by the student pilot, t he authorized individual

will verify the airman's identity

, provide and sign FAA Form 8710

- 1, and forward the enti re
application package to FAA’ s Civil Aviation Registry in one of two ways:

1) One piece of 8.5 × 11 sheet of paper (8710

- 1) individually mailed to the FAA at a cost of

$3 ( provided in the NPRM ). Given the number of application packages that each

authorized i ndividual will process, the FAA determined that it will cost the m $15 per

batch mailing of 20 applications ( provided in the NPRM)

.
2) Utilizing IACRA

, t he authorized individual can also verify the airman's identity , retrieve

the application initiated by the student pilot, and electronically sign Form 8710

- 1 . T he

IACRA package will be electronically submitted to FAA’s Civil Aviation Registry.

The FAA assumes that CFIs will submit applications electronically through IACRA

. While

an ACR associated with a part 141 pilot school can send a student pilot application either

electronically or by mail to the Civil Aviation Registry , the FAA has taken the conservative

approach (greater cost) by estimat ing th is cost associated with mailing an application.

The DOT assign s the value of personal time of a student pilot to a range of $1 3 to $2 5.22 per

hour (see Assumptions and Data Source section). Th is range of hourly rate s used in th e analysis

is derived from U.S. median household income and DOT guidance on valuation of tr avel time

. The FAA expects an original student pilot applicant will take 30 minutes ( $ 6.50

- $ 12. 61 ) 17 to

17 Filling out form 8710

- 1 is an additional requirement for the majority of the student pilot applica nts. Student pilot applicants completing paperwork for an original certificate issuance will need to fill out the entire FAA form 8710

- 1 application, which should take about 30 minutes. Multiplying 0.5 hours (30 minutes) to the personal travel time of $1 3 equals $6. 50 for the lower

- bound. Similarly, m ultiplying 0.5 hours t o the personal time of $ 2 5.22 equals $ 12. 61 for the upper

- bound

.18 complete Form 8710

- 1 and 20 minutes ( $4. 33

- $ 8. 41 18 ) for the student pilot applicant to be

processed. Given the value of time, 50 minutes is valued from $10. 83 to $ 2 1.02

. 19

The CFI and ACR associated with a part 141 school could recoup their expense from the

student pilot applicant by charging $ 7.86

. 20 Thus, the student could incur an additional cost of

$ 7.86

. Consequently

, the total incremental cost for a student pilot applicant is expected to be

from $1 8.69 to $ 2 8.88

. 21 Although mailing charges will be incur red for submitted paper

applications , this expense will be covered by the authorized individual (discussed later).

Table 3 depicts th e value of 50 minut es of the applicant’s time ( $10. 83

- $ 2 1.02 ) and the

processing cost ($ 7.86 ) multiplied by the number of original student pilot applicants affected by

this final rule during the 10

- year time period of analysis. Student pilots requesting a replacement

ce rti ficat e ( due to expiration ) from the Civil Aviation Registry will not have to follow the

application procedures under this final rule, but will have to p ay a $2 replacement certificate fee

consistent with existing 14 CFR § 187.5

.

18 Airman being processed by an authorized individual will need to have their identity and documents verified as well as h ave their application signed which should take about 20 minutes. Multiplying 0.33 hours (20 minutes) to the personal travel time of $1 3 equals $4. 33 for the lower

- bound. Similarly, multiplying 0. 33 hours t o the personal time of $ 2 5.22 equals $ 8. 41 for th e upper

- bound

. 19 Student processing for lower

- bound is $1 3 /hr × 1hr/60 minutes × 50 minutes = $10. 83 ; and upper

- bound is $ 2 5.22 /hr × 1hr/60 minutes × 50 minutes = $ 2 1.02

. 20 A weighted average c alculation of the authorized individual processing expense is a s follows: $ 7.86 × .25 to ACR + $25 × .0 to FSDO + $0 × .0 to DPE + $ 7.86 × .75 to CFI = $ 7.86

. 21 Calculation: $6. 50

- $ 12. 61 to fill out application + $4. 33

- $ 8. 41 for student’s time with an authorized individual + $ 7.86 recouped authorized individual e xpense = $1 8.69

- $ 2 8.88

.19 TABLE 3 ORIGINAL STUDENT P ILOT APPLICANT COST TO FILL OUT FORM 8710

- 1, AUTHORIZED INDIVIDUAL PROCESSING TIME, AND MAILING CHARGE (201 5

– 202 4 )

Year Time to Original Applicant (Filling out Form, Processing time) Authorized Individual Charge (Original) Total Cost to Student

lower

- bound upper - bound lower

- bound upper - bound
2015 $403,153 $782,481 $292,762 $695,915 $1,075,243
2016 $405,141 $786,339 $294,205 $699,346 $1,080,544
2017 $407,128 $790,196 $295,648 $702,776 $1,085,844
2018 $409,294 $794,402 $297,222 $70 6,516 $1,091,624
2019 $411,635 $798,943 $298,921 $710,556 $1,097,864
2020 $414,153 $803,831 $300,750 $714,903 $1,104,581
2021 $417,040 $809,436 $302,847 $719,887 $1,112,283
2022 $420,120 $815,413 $305,083 $725,203 $1,120,496
2023 $423,599 $822,165 $307,609 $731,208 $1,129,774
2024 $427,095 $828,950 $310,148 $737,243 $1,139,098
Total $4,138,358 $8,032,156 $3,005,195 $7,143,553 $11,037,351

Since a student pilot will go to a n ACR associated with a part 141 school or a CFI for pilot

instruction, the FAA assumes there are no travel expenses incurred when either the ACR or CFI

accepts the application.

FAA Costs

The FAA will incur one

- time costs estimated at $130,000 to update software and recurring

costs for processin g and issuance of the student pilot certificates. The FAA will update the

FAA ’s Civil Aviation Registry’s software to allow authorized individuals to review and

electronically sign applications through IACRA. Software changes will be made for the Civil

Avi ation Registry to issue the student pilot certificate after successful completion of TSA

security vetting. Additionally, s oftware changes also will be made to the Med X press system to

remove the word “student” as appropriate in order to reflect that an AME will no longer issue a

combination medical certificate and student pilot certificate

.20 In addition to the software changes, the FAA will incur costs to process each student pilot

certificate application

. This cost includes the expense of FAA staff to revi ew the paperwork, then

process, scan, and print the plastic certificate, and finally mail the certificate to the student pilot

applicant. The regulatory impact analysis for the Photo Requirements for Pilot Certificates

NPRM estimated the cost of including a photograph for future pilot certificates in the FAA

processing costs. This final rule withdraws the proposed photograph requirement; therefore, the

FAA has removed this cost element from the processing cost estimate. As a result, the FAA’s

estimated cost for processing each student pilot certificate is $25 , including the FAA’s cost for

processing replacement student pilot certificates (due to expiration) . We provide a range

estimate from $20 to $50 as a sensitivity test. While the details are separa tely discussed later, the

total cost of FAA processing is about $1 0 million; about $ 8 million for a $20 per application

processing cost and increasing to about $ 20 million with a processing cost of $50.

Table 4 displays the total FAA expenditures for one

- t ime software updates and recurring

costs for processing and issuing the student pilot certificates.

TABLE 4 FAA ONE TIME AND RECURRING COSTS (201 5

– 202 4 )

Year Original Replacements FAA Recurring (Original and Replacement) FAA One

Time Total Cost FAA PV FAA Cost (7%) PV FAA Cost (3%)

2015 36,857 12,684 $1,238,525 $130,000 $1,368,525 $1,278,995 $1,328,665
2016 36,672 12,621 $1,232,325 $1,232,325 $1,076,360 $1,161,585
2017 36,487 0 $912,175 $912,175 $744,607 $834,769
2018 36,318 0 $907,950 $907,950 $692,671 $806,702
2019 36,164 0 $904,100 $904,100 $644,611 $779,885
2020 36,025 $900,625 $900,625 $600,124 $754,259
2021 35,917 $897,925 $897,925 $559,183 $730,095
2022 35,824 $895,600 $895,60 0 $521,247 $706,995
2023 35,763 $894,075 $894,075 $486,318 $685,234
2024 35,701 $892,529 $892,529 $453,716 $664,125
Total 361,728 25,305 $9,675,829 $130,000 $9,805,829 $7,057,832 $8,452,31421 Authorized Individual Costs

As pr eviously mentioned, the third component of the costs is for the mailing expenses

incurred by the authorized individual to mail the applications to FAA’s Civil Aviation Registry.

While an ACR associated with a part 141 pilot school can send a student pilot application either

electronically or by mail to the Civil Aviation Registry , the FAA has taken the conservative

approach (greater cost) by estimat ing th is cost associated with mailing an application. Twenty

five percent of the future original student pilot applications will be submitted in paper form by

the authorized individual . This analysis estimates an average of 20 application packages will be

sent together each costing $15. Table 5 shows the number of original certificates that are

estimated to be ma iled over the ten year time period of analysis.

TAB LE 5 NUMBER OF ORIGINAL STUDENT PILOT CERTIFICATE APPLICATIONS MAILED (201 5

- 202 4 )

Year Original Mailing Charges (Original) PV Cost (7%) PV Cost (3%)

2015 9,214 $6,911 $6,459 $6,710
2016 9,168 $6,8 76 $6,006 $6,481
2017 9,122 $6,841 $5,584 $6,260
2018 9,080 $6,810 $5,195 $6,051
2019 9,041 $6,781 $4,835 $5,849

2020 9,006 $6,755 $4,501 $5,657
2021 8,979 $6,734 $4,194 $5,475
2022 8,956 $6,717 $3,909 $5,302
2023 8,941 $6,706 $3,648 $5,140
2024 8,925 $6,694 $3,403 $4,981
Total 90,432 $67,825 $47,734 $57,90622 Cost Summary

Table 6 lists range of total costs to all parties over the next 10 years, as well as for 7 and 3

percent discount rates.

TABLE 6 TOTAL AND PRES ENT VALUE COSTS OF THE FINAL RULE (201 5

- 202 4 ) (Millions, 2014 $)

AFFECTED GROUP TOTAL COST PRESENT VALUE
7 PERCENT 3 PERCENT
LOWER UPPER LOWER UPPER LOWER UPPER
STUDENT PILOTS $ 7. 1 $11. 0 $ 5. 0 $7. 7 $6. 1 $9. 4

FAA $ 9.8 $7. 1 $8. 5
AUTHORIZED INDIVIDUALS $0.07 $0.05 $0.06

TOTAL $17. 0 $ 20.9 $12. 2 $1 4.9 $14. 7 $18. 023 

### 1. **Sensitivity Analysis**
In the base case all student pilots over 40 will not have a paper license in 2017 (year 3 for those who obtained their license in 2014) due to the fact t hat they either upgraded licenses or needed to renew in two years. Also in the base case, the FAA assumes that by year 2017 there will be no requests made for replacements since the student pilots who have not dropped off are

assumed to have advanced to th e next license before the expiration of their paper certificate. T he

FAA provides a sensitivity analys i s for the effects of having to process replacements for student pilots under the age of 40 who are requesting a replacement in years 2017 to 2019. Given that the number of drop

- offs from the paper certificate is a best estimate, the FAA did a sensitivity analysis on years 2017 to 2019. Below are the replacement numbers for the low and high range.

For 2017 t hrough 2019 , in the l ow and high range , the FAA estimated that 10% of the drop

- offs came from the holders of the paper certificates. With this new assumption, the balance of student paper certificates now gets exhausted by 2019 (the fifth year for those student pilots who obtained their paper student pi lot certificate in 2014)

. We believe the replacements for 2017 through 2019 will be low because the majority of the student pilots under 40 years of age will move on to the next license or drop

- off before their student pilot certificate expires and that is why we selected very small percentages compared to the 10.61% used in the base case. In the low range, in order to obtain the number of replacements for 2017 through 2019, the FAA

forecast was multiplied by about

. 00 5 percent

. In the high case range, the FAA forecast was multiplied by about .01 percent

. T he summary cost table is the same for both ranges. The FAA ’s

cost increase d from $9.8 million in the base case (no replacements after year 2016) to $9.9 by varying the replacement numbers in the low and hi gh range.

Lowe r bound for replacements:

Year Drop offs from Paper Certificates Replacements
2015 36,857 12,684
2016 36,672 12,621
2017 3,649 628
2018 3,632 625
2019 3,616 62224 Higher bound for replacements:

Year Drop offs from Paper Certific ates Replacements
2015 36,857 12,684
2016 36,672 12,621
2017 7,297 1,256
2018 7,264 1,250
2019 7,233 1,245

Summary Cost Table for Low and High Range of Replacement Certificates

(Millions, 2014 $)

AFFECTED GROUP TOTAL COST PRESENT VALUE
7 PERCENT 3 PERCENT
LOWER UPPER LOWER UPPER LOWER UPPER
STUDENT PILOTS $7.1 $11.0 $5.0 $7.7 $6.1 $9.4

FAA $9.9 $7.1 $8.5

AUTHORIZED INDIVIDUALS $0.07 $0.05 $0.06

TOTAL $17.1 $21.0 $12.2 $14.9 $14.7 $18.0

T he FAA also provides a sensitiv ity analys i s for the effects of using an alternative value regarding FAA’s cost to process each student pilot certificate application

. As mentioned in the previous section

, the FAA estimates that th e cost to process each student pilot certificate applicati on could range between $20 and $50 per application. Table 7 presents the lower and upper bound s of the FAA’s cost , as well as the total cost of this final rule. Given the c ost of $20 to produce a student pilot certificate, the lower bound of FAA costs wou ld be reduce d by about 20 percent compared to the final rule, and total costs would be reduced by about 10 percent

. With a cost of $50 to produce a student pilot c ertificate , the upper bound of FAA costs would almost double compared to the final rule , whil e t otal costs would increase up to 5 0 percent.

TABLE 7 TOTAL AND PRESENT VALUE COSTS FOR STUDENT PILOT CER T IFICATE PROCESSING VALUE OF $20 AND $50 (201 5

– 202 4 ) (Millions, 2014 $)

AFFECTED GROUP TOTAL COST PRESENT VALUE
7 PERCENT 3 PERCENT25 LOWER UPP ER LOWER UPPER LOWER UPPER
STUDENT PILOTS $11. 0 $7. 7 $9. 4
FAA $ 7.9 $19. 5 $5 .7 $14. 0 $6. 8 $ 16.8
AUTHORIZED INDIVIDUALS $0.07 $0.05 $0.06

TOTAL $19. 0 $ 30.6 $13. 5 $ 21.8 $16. 3 $26. 3

*S tudent pilot personal time of $25.22

Note: The sum of individ ual items may not equal totals due to rounding.26 

### VI. **Discussion of Alternatives**

For purposes of analysis, the FAA developed an alternative to the final rule. In that

alternative, the FAA eliminated the AME’s authority to issue a combination student

pilot /med ical certificate and did not give CFIs the authority to accept a stude nt pilot application.

Without an AME ’s authority to issue student pilot certificate s or a CFI ’ s authority to accept

student pilot applications, the student pilot applicant would incur a financial burden of additional

travel expenses when apply ing with other types of authorized individuals , such as, DPE s and

FSDO s

. I n that case the FAA estimated that 70 percent of the student pilots would travel to a

DPE
, 5 percent to a n FSDO , and 25 per cent to a n ACR associated with a p art 141 pilot school

.

Under this alternative, 75 percent of the student pilot applica nts would incur additional travel

expenses to and from the DPE and FSDO. The remaining 25 percent applying with an ACR

associated with a part 141 school would incur zero travel expenses, because they are already

expected to t ravel t his location due to flight training

.

Just as in the final rule, the costs for the alternative also include the 30 minutes to complete

Form 8710

- 1 ( $6. 50

- $ 12

. 61 ) 22 and 20 minutes ( $4. 33

- $ 8. 41 ) 23 for the student pilot applicant

to be processed with an authorized individual

. In addition to these costs , the FAA developed two

sets of travel estimates that depend on where the pilot lives in order to determine the time and

mileage necessary for a pilot to visit a DPE or FSDO to submit the necessary materials for the

application.

22 Airman filing paperwork for an original student pilot certificate will need to fill out the entire 8710

- 1 package, which should take about 30 minutes. Multiplying 0.5 hours (30 minutes) to the personal travel time of $1 3 equals $6. 50 for the lower

- bound. Similarly, multiplying 0.5 hours t o the personal time of $ 2 5.22 equals $ 12. 61 for the
upper

- bound

. 23 Airman being processed with an authorized individual will need to have their identity and documents verified as well as have t heir application signed which should take about 20 minutes. Multiplying 0.33 hours (20 minutes) to the personal travel time of $1 3 equals $4. 33 for the lower

- bound. Similarly, multiplying 0. 33 hours t o the personal time of $ 2 5.22 equals $ 8. 41 for the upp er

- bound

.27 The FAA obtained zip code information for student pilots from the FAA’s Airmen

Certification Database. 24 The student pilot zip code file s and a file with the authorized

individual s zip codes were used with zip code matching software that takes two lists of locations

and sorts them by geographic distance from one another. By doing this, the FAA obtained the

average distance a student pilot would need to travel to reach the closest authorized individual

. The first run included the DPE locations with zip codes. The second run included the FSDO

locations with zip codes. On average a student pilot will need to travel 17 miles one

- way to reach

t heir closest DPE location and 55 miles one

- way to reach their closest FSDO location. 25 26

Student pilots , under this alternative , would have to spend , on average, almost an additional

32 minutes compared to the final rule traveling to and from the DPE and FSDO. This additional

time increases the cost to the student applicant from $6. 91 to $ 13. 4 compared to the final rule.

Thus

, the average cost of total time spent by the student pilot applicant is from $1 7.75 to $ 3 4.42

. The student applicant would also inc ur expenses per mile travel ing to the authorized

individual location. Given a cost of $0. 235 per mile of travel (see assumptions) and an average

round

- t rip distance of 29.3 miles to a n authorized individual , the cost of miles traveled per

student pilot ap plicant is $ 6.89

. In addition to the time spent filling out the form , time being processed with an authorized

individual, and the travel expenses, t he FAA estimated the charge s by authorized individuals to

the applicants. Using the aforementioned percenta ge breakout of student pilot applicants at each

type of authorized individual , t he weighted average of these charges is $ 19. 47

. 27 Table 8

presents the details of time, mileage, and cost for a student pilot to complete an application.

24 http://www.faa.gov/licenses_certificates/airmen_certification/releasable_airmen_download/

25 Round

- trip of 34 miles (17 × 2) will take: (3 4 miles / 55 MPH) × (60 minutes / 1 hour) = 37 minutes.

26 Round

- trip of 110 miles (55 × 2) will take: (110 miles / 55 MPH) × (60 minutes / 1 hour) = 120 minutes.

27 T he percentage breakout is 25 % with an ACR associated with a part 141 school, 70% with a DP E
, and 5% at a n FSDO : $ 7.86 × .25 + $25 × .7 + $0 × .05 = $19. 47

.28 TABLE 8
TIME
, MILEAGE , AND COST FOR A STUDENT PILOT TO COMPLETE A PILOT APPLICATION BY DISTANCE

Category Pilot Location Weighted Average Average Cost
ACR (Part 141 School) DPE FSDO LOWER UPPER Complete Form 8710

- 1 (minutes) 30 30 30 30 $6.50 $12.61
Process Form 8710

- 1 (minutes) 20 20 20 20 $4.33 $8.41 Round trip travel (minutes) 0 37 120 31.9 $6.91 $13.41 Total time spent 50 87 170 81.9 $17.75 $34.42

Miles traveled (round

- trip) 0 34 110 29.3 $6.89

Portal Charges $7.86 $25.00 $0.00 $19 .47 $19.47

Total Cost to Pilot $44.10 $60.78

In sum , the average cost for each student pilot applying at a n authorized individual under the

alternative is from $4 4.10 to $ 60.78

. 28 Also, mailing expenses will be incurred by all aut horized

individuals (ACR, DPE, and FSDO) to mail the applications to FAA’s Civil Aviation Registry.

28 Calculation: $ 17.75 + $6.89 + $19. 47 = $4 4.1 0 (lower

- bound); and $ 3 4.42 + $ 6.89 + $ 19. 47 = $ 60.78 (upper

bound).29 

### VII. **Benefit**

**- Cost Summary** 

This final rule responds to section 4012 of the Intelligence Reform and Terrorism Prevention

Act (IRTPA) and facilitates security ve tting of all student pilot certificate applicants before the

FAA issues a student pilot certificate which helps to ensure aviation safety

. As Congress

understood there would be additional costs due to a quicker vetting process. As shown in Table

6, t he es timated compliance cost of this rule range s from $ 1 7 to $ 2 0.9 million. Although the

potential benefits are not quantifiable , t his final rule responds to the direction of Congress and

therefore provides a sufficient reasoned determination to justify the cos ts.