Student loans to pay for trade school: What to know

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Student loans for trade school can help you launch a career in a well-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 education pathway to consider — especially if you’re interested in a specific trade, like plumbing, or want to enter the workforce as swiftly as possible.

Paying for trade school out of pocket isn’t always an option — the cost of 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 a trade school education.

If you’re considering taking out a private student loan to pay for trade school, 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. lecture: What’s the difference?

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

  • time to graduate — Generally, it takes a college student two years to earn an associate degree and four years to earn a bachelor’s degree. Many trade schools offer programs in which a student can complete their coursework and graduate in two years, if not a year or less.
  • course work — A college student may choose a major and minor, but will likely be required to complete general coursework to earn a degree. For example, an English major needs to take classes in mathematics and science before they begin their major-specific courses. In trade schools or vocational schools, coursework is specifically focused on whatever program the student enrolls in. For instance, an HVAC student won’t be required to take unrelated courses in mathematics or science.
  • learning environment — College students spend the majority of their class time in lecture halls or labs. Students in tech schools and trade schools primarily receive hands-on education in workshops or labs.
  • cost — The average cost to earn a bachelor’s degree is $132,000, while the average cost to obtain a degree from a trade school is $33,000, according to the Center for Employment Training.
  • Credential received — College may offer a range of certificates, degrees, and diplomas, while trade schools may only offer diplomas or certificates.
  • job market — While both colleges and trade schools aim to build a foundation for your career path, it’s important to remember that each graduate will face unique challenges in the job market. However, trade schools aim to prepare students to secure a specific job or apprenticeship right after graduation. Colleges also attempt to prepare students for employment in their chosen industry, although some employers may require more experience or education.

How to pay for trade school

Trade school may cost less than college, but students can still have difficulty paying for trade school costs out of pocket. You may need financial aid to complete your chosen program. Thankfully, trade school students have many of the same financial aid options that college students do, including:

  • Loans — you can apply for federal loans as well as private student loans for trade school. But some exceptions apply to trade school students.
  • Scholarships — Some scholarships are available for students who enroll in trade schools. For example, Imagine America Foundation offers scholarships to eligible high school students in the state of Florida. In addition, trade schools like the Motorcycle Mechanics Institute offer scholarships to students currently enrolled in the school. And certain technical associations and nonprofit organizations offer scholarships for technical or career school students.
  • grants — Grants are also available for eligible students, through organizations including Perkins State Basic Grants, Native Hawaiian Vocational Education Program, and America’s Career Resource Network.

HOW TO FIND LOW-INTEREST STUDENT LOANS

How to take out student loans for trade school

If you can’t cover the cost of trade school through your own savings, scholarships, and grants, you may need to take out a student loan. Getting a student loan isn’t a difficult process, but it’s important to understand all your loan options before committing to one.

Student borrowers and their parents have two options for student loans — federal and private. It’s always best to start with federal student loans, as they offer benefits 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 every year, so federal student loans may not cover all your costs.

Federal student loans for trade school

Federal student aid is available for students choosing to continue their education in a trade school or career school. Although not every trade school is eligible for federal aid, it’s still important to fill out the Free Application for Federal Student Aid (FAFSA) so that you’re aware of all your federal student loan options.

Two primary types of federal student loans you may qualify for are Direct Subsidized Loans and Direct Unsubsidized Loans.

  • Direct Subsidized Loans — These loans are subsidized by the government, which means that it pays the interest on the loans while you’re in school as long as you meet the enrollment requirements. You’ll be responsible for the interest accrued on your loans whenever you graduate, leave school, or no longer meet eligibility requirements.
  • Direct Unsubsidized Loans — These loans aren’t subsidized by the government, which means that you’re responsible for the interest accrued from the moment the loan funds are disbursed.

Federal student loans are generally easier to qualify for than private loans — most have no credit check requirement. All new federal student loans have fixed interest rates and a standard 10-year repayment term — although income-driven repayment plans can extend your repayment period.

Private student loans for trade school

Not many private student loan lenders have loans specifically for trade school students. but private loans are available that permit you to use the funds for continuing education like career training, technical schools, and trade schools.

Private financial institutions like banks, credit unions, and online lenders provide private student loans. In most cases, you’ll need an established credit record and good credit score, or a cosigner with good credit, to secure the loan. Rates can be variable or fixed, and you’ll be required to make payments on the loan while you’re still in school. The interest rate you receive will depend on factors like your (or your cosigner’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 this easy, with a single application that allows you to compare rates in minutes† While Credible partner lenders don’t offer specific trade school loans, you may be able to qualify for a private student loan with your chosen trade school.

Find the right trade school for you

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

1. Confirm the school is accredited. Verify that the school is accredited; you can use the Database of Accredited Postsecondary Institutions and Programs to search for schools. It’s also wise to verify the school’s accreditation history and whether any of its programs need a separate accreditation.

2. Check the school’s eligibility for federal aid. Once you’ve verified 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 organization recognized by the US Department of Education. The school’s website should confirm not only its eligibility for federal aid, but also if it offers any other scholarships, grants, or financial aid.

3. Compare the cost of attendance between schools. As you compare costs, factor in any additional costs separately from tuition and books. For example, if you have to move to another city for School A or School B, you’ll need to consider living costs.

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

5. Look into additional aid programs each school offers. Contact the school’s financial aid office to inquire about any other aid programs you may be eligible for.

Trade school advantages and career options

You might discover that trade school is the right choice for you. The lower cost of attendance, shorter completion time, and direct pathway to a specific career are advantages that help many students find employment without a degree from a college or university. Dozens of career options are available that require only certificates or diplomas from vocational schools, trade schools, and tech or career schools.

Popular careers from 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 finance almost any degree, certificate, or diploma. Before deciding on a private student loan, compare rates and learn more about lenders with Credible.

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