Student Loans for Trade School: What to Know

Trade schools, which are also referred to as technical schools or vocational schools, differ from traditional colleges because they offer career training in specific fields, rather than the general education you can expect from an undergraduate degree. In addition, trade schools often train students in a shorter time frame than a traditional four-year college — and at a lower cost.

If you’re interested in training for a specific career at a trade school, you may be wondering if trade school loans are right for you.

Federal student loans for trade school

You may be eligible for federal student loans to pay for your career training. Federal student loans generally cost less than private loans, and they give you access to a number of protections that aren’t available through private lenders, like income-driven repayment plans and loan forgiveness options.

But not all trade schools are eligible or accredited for federal student loans. You can find a directory of accredited trade schools on the Accrediting Commission of Career Schools and Colleges website.

Also, the majority of trade schools are for-profit, which means not all of them participate in federal student aid programs. You can use the National Center for Education Statistics College Navigator tool to see if your trade school is on the list.

The U.S. Department of Education offers three main types of federal student loans:

1. Direct Subsidized Loans: Direct Subsidized Loans are only available to undergraduate or trade school students at an accredited institution who demonstrate financial need. With this type of loan, the government pays the interest that accrues while you’re in school and for the six-month grace period after you leave school.
2. Direct Unsubsidized Loans: Regardless of financial need, any student at an accredited school can qualify for unsubsidized loans.. These loans require you to pay interest, or allow it to accrue, during school and the grace period.
3. Direct PLUS Loans: Parents, graduates, and professional students may qualify for a Direct PLUS Loan, provided the school they’re attending is eligible. But PLUS loans come with a higher interest rate than other federal student loans.

To apply for federal student aid, you’ll need to complete the Free Application for Federal Student Aid (FAFSA). Schools use your FAFSA to determine what federal aid you may be eligible for, such as grants, work-study programs, and federal loans.

Private student loans for trade school

Not many private lenders offer student loans that are specifically created for trade schools. But several private student loans are available for you to use for trade school even if the loan isn’t specifically defined as a trade school loan.

For example, both Sallie Mae and College Ave offer student loans that are geared toward trade schools. These career training student loans are only available at participating schools, and you can expect some additional eligibility requirements and stipulations, including:

• Both loans have a $1,000 minimum to borrow.
• College Ave is only available for degree-granting schools.
• Sallie Mae is for students in professional training and trade certificate courses (culinary, technical, etc.) at a non-degree-granting school.

Find the right trade school for you

You can find trade schools throughout the U.S., which gives you several options. To make sure you find the right vocational school for your educational needs and career goals, take these steps:

1. Confirm the school is accredited. Only students of accredited schools are eligible for federal financial aid, and lack of accreditation may make it difficult to get professional licensure in your field.
2. Check the school’s eligibility for federal aid. Even if your technical school is accredited, it may still not be eligible for federal student aid. The only way to receive federal grants and federal student loans is to apply for federal student aid using the FAFSA. Choosing an accredited trade school that’s eligible for federal student aid can make a big difference in your bottom line.
3. Compare the cost of attendance between schools. Trade schools don’t have universal pricing, which means you might find a better deal at one school compared to another.
4. Review the school’s job placement rates and reputation. In some cases, your trade school may be able to assure you that a majority of graduating students find jobs in their chosen fields.
5. Look into additional aid programs each school offers. You may be eligible for scholarships, grants, or student loans for your trade school education. Ask your school’s financial aid department if they know of any local organizations — like labor unions or local businesses — that offer support for students in trade school programs. For example, UnionPlus is a nonprofit organization that supports union members and their families.

How to take out student loans for trade school

Make sure to check all your free options for trade school, such as scholarships and grants, since these don’t have to be repaid. Once you’ve done this, the next place to look is student loans.

Here’s how to take out student loans for trade school:

• Fill out the FAFSA. Start by completing the FAFSA to see what type of federal aid you might be eligible for, including scholarships and grants. To complete the FAFSA, visit the StudentAid.gov website. Accept the federal student loans you qualify for. After submitting your FAFSA, you’ll receive an award letter from your school’s financial aid office. You can then choose which federal student aid you want to accept.
• Take out private student loans to fill the gaps. Once you’ve exhausted your federal financial aid options, consider private student loans to help fill any gaps. Unlike federal student loans, you’ll typically need good credit history and an income to qualify for private student loans. Having a cosigner with good credit could also help you get approved. And some lenders offer student loans for bad credit as well.

If you decide to take out a private student loan, be sure to shop around and consider as many lenders as possible to find the right loan for you.

You can do this easily with Credible — after filling out a single application, you can compare rates from multiple lenders in two minutes. While our partner lenders don’t offer specific trade school loans, you might qualify for a private student loan with your chosen school.

The companies in the table below are Credible’s approved partner lenders. Whether you’re the borrower or cosigner, Credible makes it easy to compare rates from multiple private student loan providers without affecting your credit score.

Trade school advantages and career options

Here are a couple reasons why you might choose a trade school over a traditional four-year college:

• Graduate in less time: You don’t have to take the full course load required for a four-year degree to complete a trade school program. Instead, you can focus on the specific courses and skills needed for your career.
• Less expensive: Trade school can often be a cheaper alternative compared to a traditional four-year bachelor’s degree.
• Job placement assistance: Many trade schools offer job placement assistance at the end of a program. But keep in mind that assistance isn’t a guarantee of landing your dream job. It could still take time to work your way up the ladder and build your income after starting in your field.

Popular careers from trade schools, technical schools, and certificate programs

Here are some of the most popular careers you can pursue by enrolling in a trade school, technical school, or certificate program:

Eric Rosenberg contributed to the reporting for this article