FAA Knowledge Tests: A Flawed System and a Money Grab

FAA Knowledge Tests: A Flawed System and a Money Grab

The FAA knowledge test system is often presented as a necessary step in ensuring pilot competence and safety. However, in practice, these exams have become little more than a bureaucratic hurdle designed to generate revenue rather than genuinely assess a pilot’s understanding. With a monopoly on testing and high fees, the system does more to pad the pockets of a few than to improve aviation safety.

A System Built on Memorization, Not Understanding

A major flaw in the FAA’s written testing process is that it does not actually measure a pilot’s practical knowledge or decision-making ability. Instead, it encourages rote memorization. Numerous test prep providers sell books, apps, and online courses that include banks of actual test questions. Students are often advised not to focus on truly understanding the material, but rather to memorize answers to pass the exam. This approach does little to improve safety or ensure that pilots can apply what they’ve learned in real-world scenarios.

Instructors and examiners frequently observe students who ace their written exams yet struggle with applying basic aeronautical knowledge in flight. This disconnect between testing and real-world competence raises a fundamental question: If the FAA’s knowledge exams are failing to assess meaningful comprehension, what purpose do they actually serve?

The PSI Monopoly and Exorbitant Fees

For years, FAA knowledge tests were administered at a variety of testing centers, often located at flight schools or Fixed Base Operators (FBOs). However, this system changed when PSI Services LLC became the exclusive contractor for administering these exams. As of 2025, the fee for most FAA knowledge exams is $175 per test. While this may seem reasonable at first glance, the sheer volume of tests taken annually translates into a massive revenue stream for PSI.

In 2023, PSI reduced the reimbursement rate for third-party testing centers from $65 to just $22 per test, forcing many independent locations to stop offering exams because the new rate did not cover their operational costs. This move consolidated more testing at PSI’s own facilities, ensuring that the company could collect the full $175 per test instead of splitting revenue with smaller testing centers. The result? Fewer available testing locations, increased inconvenience for test-takers, and a system that prioritizes profit over accessibility.

PSI was recently acquired by Educational Testing Service (ETS), a company that administers standardized exams such as the GRE and TOEFL. This acquisition signals that FAA testing is now fully entrenched in the standardized testing industry—an industry notorious for prioritizing revenue over meaningful assessment.

Outdated, Irrelevant, and Unnecessary Questions

Another major issue is that many of the questions included in the FAA knowledge exams are outdated, irrelevant, or disconnected from real-world flying. Some tests still include antiquated weight and balance calculations, outdated navigation procedures, and questions about obsolete technology. While understanding aviation history is useful, forcing pilots to memorize answers to questions that have no relevance in modern aviation serves no purpose beyond maintaining a system designed to extract money from test-takers.

Additionally, the knowledge test system has not adapted to modern learning techniques. Pilots are trained using electronic flight bags (EFBs), GPS-based navigation, and real-time weather tools, yet the tests continue to emphasize outdated paper chart calculations and manual computations that are rarely, if ever, used in real-world flying.

A Barrier to Entry, Not a Measure of Safety

The financial burden of the FAA’s knowledge testing process also serves as an unnecessary barrier to entry for aspiring pilots. Flight training is already prohibitively expensive, and the additional cost of knowledge exams only adds to the financial strain. Unlike in other industries, where training and testing fees are often kept at reasonable levels, aviation has developed a system that extracts as much money as possible from pilots at every stage of their training and career progression.

Recurrent testing for ratings such as CFI renewals and ATP certifications further contributes to the financial burden. These tests do little to improve safety but ensure that a steady stream of money continues to flow to PSI and the FAA.

The Need for Reform

The FAA’s knowledge test system is in desperate need of reform. A competency-based oral exam, similar to the FAA’s checkride structure, could serve as a more meaningful assessment. Alternatively, in-house evaluations by flight schools could replace the standardized testing model, allowing for more relevant and practical assessments of a student’s understanding.

Additionally, there is no reason why these tests should cost $175 each. The FAA should explore cost-effective online testing solutions, reducing the financial burden on pilots while maintaining testing integrity.

Conclusion

The current FAA knowledge test system does little to measure actual aviation knowledge and instead operates as a revenue-generating scheme for PSI and its parent company. With high fees, a monopoly on testing, and a reliance on outdated questions, this system prioritizes profit over pilot education and safety. Reform is long overdue, and the FAA must take steps to modernize its approach to knowledge testing before it becomes even more of a financial roadblock for aspiring and current pilots.