PSI Fee Change Goes Into Effect on January 1

Third-party testing centers, such as flight schools and FBOs, lose two-thirds of revenue from pilot knowledge exams.

Wednesday, December 28, 2022 at 07:34 AM ET

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Requirements for delivering FAA knowledge exams can add up to provider costs that exceed the amount PSI will reimburse the centers, starting in January. [Credit: Pixabay/StartupStockPhotos]

Key Takeaways:

Starting January 1, flight schools and FBOs administering FAA aviation knowledge tests will experience a nearly 70% cut in their compensation per test, dropping from $65 to $22.
PSI Services LLC, the sole contractor for these tests, implemented the reduction, citing the need for improved computer security, despite requests from aviation stakeholders for a delay.
Industry groups are concerned this fee cut will force many small, third-party testing centers to cease operations, severely impacting the accessibility of knowledge tests for pilots and drone operators, especially in remote areas.
The FAA maintains it cannot dictate PSI's compensation model for third-party providers, while critics question the justification for PSI's significant increase in revenue from the current fixed test fee.

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Starting January 1, flight schools and FBOs that administer the online aviation knowledge tests will see their cut of the $175 fee drop from $65 to $22 per test. That’s roughly a 70 percent drop in revenue for the businesses in question.

At the present time PSI Services LLC, owned by Lifelong Learner Holdings (LLH), is under contract with the FAA to provide the tests. In years past, there were two other companies, CATS and LaserGrade, but they have gone out of business, giving PSI the monopoly.