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Student Loans

Student Loans for Trade School

Data analytics company Gitnux projects that the number of available trade jobs will grow 10% by 2026. It reports that trade school typically lasts two years and costs an average of $33,000.

Trade school student loans can be used to cover these costs and are available from the federal government and certain private lenders.

Loan or lenderRates (APR)Our rating
Federal Subsidized5.50%Not rated
Federal Unsubsidized5.50%Not rated
College Ave4.07%16.69%5/5
Sallie Mae4.50%16.70%4.8/5
EdlyIncome-based3.9/5

If you’re looking for private student loans, click here to see our reviews.

Federal student loans for trade school 

When most people think of federal student loans, they think of loans for four-year colleges and universities. However, many trade and vocational schools also qualify for federal loans.

If you’re considering specific trade schools to continue your education, check with their financial aid offices to see whether they’re eligible to accept federal aid. You can also use the School Search function on the Federal Student Aid website. Just type in your state and the name of your school to see whether it accepts federal loans.

The Department of Education gives every school participating in the federal student loan program a unique code. You’ll enter this code when completing the Free Application for Federal Student Aid (FAFSA). If your school doesn’t have a code or isn’t searchable, it likely isn’t eligible for federal loans.

Once you submit the FAFSA with your trade school’s code, that school will receive a report based on your FAFSA data and create a financial aid package for you that may include federal student loans.

DetailsSubsidizedUnsubsidized
Rates (APR)5.50%5.50%
Loan amountVaries by borrowerVaries by borrower
Terms10 – 25 yrs10 – 25 yrs
Grace period6 months6 months

The biggest difference between the two is that the government covers the interest on subsidized loans before the borrower begins full repayment, while interest accrues immediately with unsubsidized loans.

Best private student loans for trade school

These are loans from banks, credit unions, and online lenders. Borrowers must meet certain income and credit requirements or apply with a cosigner who does and may receive higher interest rates than federal loans.

Here are our picks for the best trade school loans from private lenders.

Company
Best for…
Rating (0-5)
Best Overall
5.0
Best for Cosigners
4.8
Best for Income-Based Repayment
3.9

College Ave

Best Overall

5.0 /5
LendEDU Rating

Why we picked it

College Ave is the best private lender for trade school student loans. It offers a career training loan that can be used to pay for up to 100% of your expenses.

To qualify, you (or your cosigner) must have a valid Social Security number and meet College Ave’s proprietary credit requirements. You aren’t required to attend school full-time, but you must attend an eligible school and meet the school’s requirements for satisfactory academic progress.

  • Cover up to 100% of your costs
  • Choose your repayment terms
  • Receive a decision in just 3 minutes
Loan Details
Rates (APR)5.59%16.99%
Loan amounts$1,000 – 100% of certified costs
Repayment terms5, 8, 10, or 15 years
Repayment plansFull, interest-only, $25 flat, or deferred
EnrollmentNo restrictions
States50 states
Credit scoreMid-600s and above
Annual income$35,000

Sallie Mae

Best for Cosigners

4.8 /5
LendEDU Rating

Why we picked it

Sallie Mae is the most well-known student lender. It offers a Smart Option Student Loan for Career Training, designed for trade schools and other professional training programs.

We chose Sallie Mae as one of the best trade school loans because students can borrow whether they’re in school full-time, half-time, or less than half-time. The loan can cover up to 100% of the tuition, fees, books, and other trade-related supplies you may need for school. Your cosigner can be released after 12 consecutive, on-time payments.

  • Apply once and receive funds for the full year
  • Covers up to 100% of your costs
Loan Details
Rates (APR)5.59%16.99%
Loan amounts$1,000 – 100% of certified costs
Repayment terms5, 8, 10, or 15 years
Repayment plansInterest-only, $25 flat, or deferred
EnrollmentNo restrictions
States50 states, D.C., Puerto Rico
Credit scoreMid-600s and above
Annual incomeNot disclosed

Edly

Best for Income-Based Repayment

3.9 /5
LendEDU Rating

Why we picked it

Edly offers cosigned and non-cosigned loans to cover the costs of trade schools. You can check your rate without affecting your credit score.

Unlike traditional student loans, Edly doesn’t charge interest on what you borrow. Instead, borrowers repay a percentage of their income for 60 to 84 payments. Repayment won’t begin until your annual income exceeds $30,000 to ensure you can afford your payments.

  • Repayment doesn’t begin until your annual income exceeds $30,000
  • Check your rate without affecting your credit score
Loan Details
Rates (APR)Percentage of your income
Loan amounts$5,000 – $25,000
Repayment termsVaries by product
Repayment plansVaries by product
EnrollmentFull-time
StatesNot disclosed
Credit scoreVaries by product
Annual incomeNone

Can you get student loans for all trade schools?

Not all trade schools are eligible for student loans. Federal student loan eligibility largely depends on whether the school is accredited and recognized by the U.S. Department of Education.

To qualify, the school must maintain accreditation from an agency recognized by the Department of Education and meet acceptable levels of quality in its programs.

Lenders of private student loans often consider the school’s accreditation status, the type of programs offered, and the institution’s overall reputation. They also consider the likelihood of graduates securing employment in their field of study. Most lenders have a list of schools that have been approved so enrolled students can receive student loans to attend those institutions.

How to apply for trade school loans

Before applying for trade school loans, ensure you’ve exhausted all other options. Prioritize getting federal grants and scholarships because you don’t need to repay them. You might even find opportunities for employer-sponsored grants.

If you can’t secure grants or scholarships, or they don’t cover the entirety of your education costs, the next step is to apply for a federal student loan for trade school. 

If your school doesn’t qualify for federal student loans, applying for private student loans is the final option. Many private student loans will pay for trade schools, including flight schools, real estate schools, and cosmetology schools.

Here are the steps to take to apply for a trade school loan.

  1. Fill out the FAFSA. The FAFSA is the first place you should start when you’re seeking student loans for educational expenses. This form, which you must complete annually, takes into account your school expenses and other factors, including family size and income. This information is used to determine your financial need and calculate your eligibility for certain grants and federal loans.
  2. Accept federal aid options. Federal student loans offer fixed interest rates that can be lower than those from private lenders, especially if you or your cosigner have less-than-perfect credit. They also come with certain benefits and features that private loans don’t, making them the best first option for funding trade school.
  3. Consider private student loans to fill the gaps. If your federal loans, grants, and scholarships don’t cover all your educational expenses, you may need to turn to private loans. These loans might have variable or fixed rates and require a creditworthy primary borrower or cosigner.
  4. Compare terms and find a cosigner (if needed). It’s wise to shop around before choosing a private loan to ensure you’re finding the lowest interest rate and best possible loan terms. Adding a creditworthy cosigner may open the door to additional loans or lower rates.

Other options to pay for trade school 

In some cases, you may find neither federal nor private student loans are an option for you. Perhaps you’ve been denied a loan, or your school isn’t eligible to accept federal aid. 

In this case, you may need to consider other ways to pay for your trade school tuition and expenses.

Trade school grants

Federal grants are available for trade school students, and you don’t need to repay them. The most well-known federal grant is the Pell Grant, which is available to qualified trade school students with financial need. The maximum Pell Grant award is $7,395, which can go a long way in funding trade school.

Skills Training Grants are provided by The Department of Labor’s Employment and Training Administration. This is just one example of grants trade school students can apply for, and they don’t need to be repaid.

Trade school scholarships

In addition to grants, research available scholarships as well. Many trade schools offer their own scholarships. You might be able to find state-based and third-party scholarships, too. Third-party scholarships typically come from organizations, clubs, and unions. 

If you still need funds after applying for scholarships and grants, see whether your school is eligible for federal student loans. Federal student loans have low fixed interest rates—and more flexible repayment terms than private student loans. 

To be eligible for federal student loans, you must have a financial need, be a U.S. citizen or eligible noncitizen, and be enrolled in an eligible program. Not all trade schools qualify for federal student loans, so it’s important to choose one that does if you want to apply for federal loans.

You can apply for private student loans for trade school, but keep in mind private student loans might have different borrower requirements, such as a good credit score or an eligible cosigner.

Income-share agreements 

In recent years, certain schools have begun allowing income-share agreements in lieu of student loans. Instead of borrowing money and later paying it back with interest, some schools or private lenders will offer students the money for their education upfront. In turn, the student agrees to pay the school or lender a percentage of their income once they enter the workforce.

Income sharing is a newer concept; however, its market share is growing. Jobs for the Future, a nonprofit organization, summarized a Strategem Marketing Insights report that showed the ISA market in the U.S. is projected to grow at a 5.5% annual rate until 2030.

There is little awareness or regulation of ISAs yet, so if you choose to pursue one, be sure you understand the income requirements, the percentage of your income you’ll have to pay back to satisfy your debt, and your potential income once you finish your education.

Tuition reimbursement

Another option is to work with an employer that offers tuition reimbursement. In this program, your employer agrees to pay for your education directly or reimburse you for tuition you’ve already paid. One well-known tuition reimbursement program is through Home Depot, which offers tuition reimbursement to salaried, full-time, and part-time employees.

As with any agreement, be sure you understand all parts of it before participating, including whether you have to work for that company for a certain number of years to qualify for tuition reimbursement. It’s also wise to speak to HR and ask how long the company has been offering tuition reimbursement and whether it plans to continue offering the program in the future.

Recap of trade school student loans

Loan or lenderRates (APR)Our rating
Federal Subsidized5.50%Not rated
Federal Unsubsidized5.50%Not rated
College Ave4.07%16.69%5/5
Sallie Mae4.50%16.70%4.8/5
EdlyIncome-based3.9/5