Student loans to pay for trade school: what you need to know

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Trade school student loans can help you launch a career in a high-paying trade. Learn how to get federal and private trade school loans. (Shutterstock)

College isn’t your only option for continuing your education after high school. A trade school, also known as a vocational school or career school, is another training route to consider, especially if you are interested in a specific trade, such as plumbing, or want to enter the labor market as quickly as possible.

Paying for a trade school out of pocket isn’t always an option – the cost of a trade school can vary widely, from a few thousand to tens of thousands of dollars. Fortunately, federal and private student loans are available to help cover the cost of trade school training.

If you’re considering taking out a private student loan to pay for your professional education, Credible can help you get started. It’s free to compare student loan rates from multiple lenders on Credible, and it won’t affect your credit.

Trade School vs College: What’s the Difference?

Although trade schools are a form of higher education, they differ from colleges in various ways, from the courses offered to the type of degrees graduates receive.

  • It’s time to graduate — Typically, it takes a student two years to earn an associate’s degree and four years to earn a bachelor’s degree. Many trade schools offer programs where a student can complete their courses and graduate in two years or even one year or less.
  • Course – A student can choose a major and a minor, but will likely need to take general courses to earn a degree. For example, an English major must complete math and science courses before starting their major-specific courses. In trade schools or vocational schools, classes are specifically geared towards the program the student is enrolling in. For example, a HVAC student will not be required to take unrelated math or science courses.
  • Learning environment – College students spend the majority of their class time in lecture halls or laboratories. Students in technical schools and trade schools mainly receive practical training in workshops or laboratories.
  • Costs – The average cost to earn a bachelor’s degree is $132,000, while the average cost to earn a trades degree is $33,000, according to the Center for Employment Training.
  • Accreditation received — College may offer a range of certificates, degrees, and diplomas, while trade schools may only offer diplomas or certificates.
  • The job market – Although colleges and trade schools aim to lay the foundation for your career path, it’s important to remember that every graduate will face unique challenges in the job market. However, trade schools aim to prepare students for a specific job or apprenticeship right after graduation. Colleges also attempt to prepare students for employment in their industry of choice, although some employers may require more experience or education.

How to Pay for a Trade School

Trade school can cost less than college, but students may still struggle to pay trade school fees out of pocket. You may need financial assistance to complete your chosen program. Fortunately, trade school students have many of the same financial aid options as college students, including:

  • Loans — You can apply for federal loans as well as private student loans for a trade school. But some exceptions apply to trade school students.
  • Scholarships – Some scholarships are available for students enrolling in trade schools. For instance, Imagine America Foundation offers scholarships to eligible Florida State high school students. Additionally, trade schools like the Motorcycle Mechanics Institute offer scholarships to students currently enrolled in the school. And some technical associations and non-profit organizations offer scholarships to technical or vocational school students.
  • Subsidies – Grants are also available for eligible students, through organizations such as Perkins State Basic Grants, Native Hawaiian Vocational Education Program, and America’s Career Resource Network.

HOW TO FIND LOW INTEREST STUDENT LOANS

How to get a student loan for a trade school

If you cannot cover the cost of trade school with your own savings, scholarships, and grants, you may need to take out a student loan. Getting a student loan is not a difficult process, but it is important to understand all your loan options before committing to it.

Student borrowers and their parents have two options for student loans – federal and private. It’s always best to start with federal student loans because they offer benefits that private loans don’t, such as income-driven repayment plans and access to student loan forgiveness programs. But the amount you can borrow with federal loans is capped each year, so federal student loans may not cover all of your costs.

Federal student loans for trade school

Federal student aid is available for students who choose to continue their education in trade school or career school. Although not all trade schools are eligible for federal aid, it is still important to complete the Free Application for Federal Student Aid (FAFSA) so that you are aware of all of your federal student loan options.

The two main types of federal student loans you may qualify for are subsidized direct loans and unsubsidized direct loans.

  • Subsidized direct loans — These loans are subsidized by the government, which means it pays interest on the loans while you are in school as long as you meet the enrollment requirements. You will be responsible for the interest accrued on your loans each time you graduate, leave school, or no longer meet the eligibility requirements.
  • Unsubsidized Direct Loans — These loans are not subsidized by the government, which means that you are responsible for accrued interest from the time the loan funds are disbursed.

Federal student loans are generally easier to obtain than private loans – most have no credit check requirements. All new federal student loans have fixed interest rates and a standard repayment term of 10 years – although income-oriented repayment plans can extend your repayment period.

Private student loans for business school

Few private student lenders offer loans specifically for trade school students. But private loans are available which allow you to use the funds for further education such as vocational training, technical schools and trade schools.

Private financial institutions like banks, credit unions, and online lenders offer private student loans. In most cases, you will need an established credit history and a good credit score, or a co-signer with good credit, to secure the loan. Rates can be variable or fixed, and you’ll have to make payments on the loan while you’re still in school. The interest rate you receive will depend on factors such as your (or your co-signer’s) credit score, income, and repayment term.

If you’re considering a private student loan, it’s important to shop around and compare rates from multiple lenders. Credible makes it easy, with a single app that lets you compare rates in minutes. Although credible partner lenders do not offer specific trade school loans, you may be eligible for a private student loan from your chosen trade school.

Find the right business school for you

Finding the right trade school for you comes down to choosing which college to apply to. But since most vocational, vocational, and trade schools are private institutions, it’s important to research each school in detail to compare its reputation, costs, and how it will create a pathway to your career. Follow these steps to find the right trade school for you:

1. Confirm that the school is accredited. Check that the school is accredited; you can use the Database of Accredited Postsecondary Institutions and Programs look for schools. It is also wise to check the school’s accreditation history and if any of its programs require separate accreditation.

2. Check the school’s eligibility for federal aid. Once you’ve checked its accreditation history, it’s time to determine if the school is eligible for federal aid. Keep in mind that if a school offers federal financial aid, it must be accredited by an independent body recognized by the US Department of Education. The school’s website should confirm not only its eligibility for federal aid, but also whether it offers other scholarships, grants, or financial aid.

3. Compare the cost of attendance between schools. When comparing costs, consider all additional costs outside of tuition and books. For example, if you need to move to another city for School A or School B, you will need to consider the cost of living.

4. Review the school’s placement rates and reputation. No college or trade school can guarantee a job placement. But many will proudly note their reputation for helping place graduates. Review these success rates to see how likely you are to find a job right after completing your program.

5. Examine the additional support programs offered by each school. Contact the school’s financial aid office to inquire about other aid programs you may be eligible for.

Trade School Benefits and Career Options

You may find that business school is the right choice for you. The lower cost of attendance, shorter completion time, and direct path to a specific career are benefits that help many students find jobs without a college or university degree. Dozens of career options are available that only require certificates or degrees from vocational schools, trade schools, and technical or vocational schools.

Popular Careers in Trade Schools, Technical Schools, and Certificate Programs

  • IT Technician
  • Dental Hygienist
  • HVAC technician
  • Licensed practical nurse
  • Web developer
  • Electrician
  • building inspector
  • Plumber

You can use private student loans to fund almost any degree, certificate, or diploma. Before deciding on a private student loan, compare rates and learn more about lenders with Credible.

About Judith J. George

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