PSI to Drastically Reduce Third-Party Test Center Reimbursement, Effective Jan. 1

***Update*** In a Dec. 22 letter, PSI declined to delay testing fee changes that will go into effect on Jan. 1. In its response, PSI states that the decision to decrease third-party test center fee reimbursements by 65 percent was done so "only after extensive analysis to mitigate against any potential risks." While PSI recognized the change would drive some third-party test centers to discontinue offering testing services, it also claimed that the closures "would not have a material impact on either access or availability of testing to any individual." That risk would seemingly be mitigated by PSI opening it's own testing center where third parties leave the network, suggesting the aim it to drive out third-party testing centers and replace them with PSI-run facilities.

Separately, ATEC has requested a singularly complies list of all FAA knowledge testing centers so industry can assess the impact the fee structure change will have on test centers in the new year. Data gathered from that effort will drive advoacy efforts moving forward.

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Last month, the FAA knowledge test contractor, PSI, notified third-party test centers that fee reimbursements for each test administered would be significantly cut in the new year. Since testing rate caps are set by contract (between PSI and the FAA), the change effectively reduces the already narrow profit margin for third-party testing centers by about 65 percent.

PSI oversees more than 750 testing centers, many of those are third-party FAA knowledge test providers maintained by educational institutions and small business. The contractor asserts that the changes are necessary due to increased costs associated with operational security and to ensure "all centers providing the same proctored testing services [are] treated equally and operate under a level playing field, which has not been the case to date.”

Concerned about the impact on knowledge test accessibility, a coalition of aviation organizations, including ATEC, asked for a delay to the fee structure change. The group estimates that third-party providers administer a significant majority of FAA knowledge tests and that the new fee structure could create substantial financial hardships and ultimately result in a stoppage of service at many of these testing centers.

Absent a delay in the planned change, the new reimbursement rates will go into effect for all third-party test centers on Jan. 1.