Student Loans for Trade School

There are both federal and private student loans available to pay for trade school, as well as alternative options.

08/03/2020

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Trade schools offer training for many different occupations, including carpentry, plumbing, HVAC, web development, health professions, and more. Often, well-paying jobs await students who go to and complete trade school for these much-needed occupations.

The median annual wage for an electrical power lineman, for instance, is around $60,000, and the field is set to grow 9% by 2026. That translates into job security and advancement opportunities for you as you move forward in your career.

Even though trade schools get you out working and earning a living much faster than a four-year college, it still costs money to attend. Luckily, there are a number of trade school loans available and alternative options that can help.

On this page:

Federal Student Loans for Trade School
Private Student Loans for Trade School
Other Options to Pay for Trade School

Federal Student Loans for Trade School

Most people think of federal student loans as only being for four-year colleges and universities. The truth is that there are many trade and vocational schools that also qualify for federal loans. If you’re considering specific trade schools, check with their financial aid offices to see if they are eligible.

When you complete the Free Application for Federal Student Aid (FAFSA), which is the first step in getting any financial aid from the federal government, you can enter the trade school’s code just like any other college.

That school will then receive a report based on your FAFSA data and will create a financial aid package for you that may include federal student loans.

Federal Direct Subsidized Loans

The Federal Direct Loan program offers a subsidized option that allows students to borrow money for school based upon their financial need, as determined by their FAFSA.

With a subsidized loan, the federal government pays the interest on your loan while you’re in school, as well as during the six-month grace period after you graduate or are no longer attending half-time or more.

Current rates are set at 5.05% and are fixed for the life of the loan.

Federal Direct Unsubsidized Loans

Much like its subsidized cousin, the Direct Unsubsidized Loan allows students to borrow from the federal government to attend school. Where the unsubsidized loan differs, is that the government does not pay your interest while you’re in school. Instead, the interest accrues and then compounds onto the balance.

This means that when you graduate or leave school, your balance will be slightly higher than when your loan was first taken out, and each time the interest compounds, it will increase the principal amount. You’ll pay more in the long run, but the interest rate is fixed for the entire term of the loan and is still 5.05%.

Private Student Loans for Trade School

Another option you have when paying for trade school is a private student loan. These are loans offered by banks and credit unions and typically have higher interest rates than federal loans.

They’re also based upon creditworthiness instead of financial need. That means that you can get a private loan even if you’ve maxed out your financial aid, if you need more money for living expenses during school.

You will, however, usually need a good credit score or creditworthy cosigner to be eligible. If you don’t, there are also special loans designed for students without cosigners.

To find a private student loan, you can check out our guides to student loans for continuing education, certificate programs, or non-degree seeking students, or read on to learn more about one of our top choices, College Ave.

College Ave Student Loans

Check Rates

4.39% – 12.95%

1.49% – 12.99%

$1,000 – 100% of cost of attendance

College Ave is one of our top choices for private student loans with low rates and flexible repayment terms. The lender offers a career training loan that you may be able to use to pay for trade school.

Here are some highlights of College Ave:

Soft-Credit Check: Yes; soft credit check for preapproval
Repayment Terms: 5, 8, 10, or 15 years
In-school repayment options: Full deferment, $25 monthly, interest-only, full principal & interest
Grace Period: 6 months + option to apply for 6 more
Cosigner Release: Yes; after 24 on-time monthly payments
Unique benefits: $150 cash back for completing degree

Other Options to Pay for Trade School

Income-Share Agreements

Some colleges in recent years have begun offering income-share agreements in lieu of student loans. Instead of borrowing money and paying it back with interest, a few schools now allow students to have money for their education up front. In return, the student agrees to pay the school a percentage of their income after graduation, when they’re presumably in the workforce with increased earning power.

Income sharing is still a relatively new concept. Not many colleges are doing it, although the numbers are growing. Check with your prospective school to see if it’s an option for you.

Grants and Scholarships

There are federal grants and scholarships available for trade school. Neither trade school grants nor scholarships need to be repaid. It’s essentially free money. When it comes to trade schools, each school generally has their own scholarships and grants offered to their students.

There are also a few state-based and third-party programs as well. Most of these programs are offered to a select section of the population, such as children of military personnel or adults reentering the workforce.

What to Watch For

When choosing the best option for you, free is always better, and interest rates shouldn’t be the only consideration. It’s always better to start by exploring trade school grants and scholarships.

Once you move into getting loans, try federal loans first. They’re better rates than private loans, but they also come with a wide variety of repayment plans and other perks that make them easier to manage than private loans, especially if you’re still in school. Compare terms, grace periods, and the total amount you’ll pay over time.

The bottom line is that you can get a number of financial aid options to help pay for trade school — whether you want to be a chef, a mechanic, or another profession.

Ready to apply for a trade school loan? Check out our top-rated lender College Ave!