Student Loans for Trade School
Both federal and private student loans can be used to pay for trade school. Here’s how they work.
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Trade schools offer training for specialized occupations, including carpentry, plumbing, HVAC, web development, and health professions. Many of these are well-paying jobs projected to grow exponentially in the years to come. This translates into job security and advancement opportunities.
While trade school helps you start your career sooner than a four-year degree program, it still costs money to attend. If you need to borrow money to cover the cost of trade school, you may be eligible for federal or private loans.
In this guide:
- Federal student loans for trade school
- Private student loans for trade school
- How to apply for trade school loans
- Other options if you can’t get a student loan 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 to accept federal aid. You can also check for yourself using the College Navigator tool from the Department of Education.
When you complete the Free Application for Federal Student Aid (FAFSA), the first step to getting 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 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 on 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 at least half time.
Key features of Direct Subsidized Loans:
- Fixed rate: 4.99% APR
- Maximum loan amount: Up to $5,500 annually, depending on your year, for up to $23,000 total
- Repayment options: 10 to 25 years; monthly payments may be calculated based on your income
- Grace period: Six months
Federal Direct Unsubsidized Loans
Much like the Subsidized Loan, the Direct Unsubsidized Loan allows students to borrow from the federal government to attend school. Unsubsidized loans differ in that the government does not pay your interest while you’re in school. Instead, the interest accrues.
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.
Key features of Direct Unsubsidized Loans:
- Fixed rate: 4.99% APR
- Maximum loan amount: Up to $7,500 annually, depending on your year, for up to $31,000 total
- Repayment options: 10 to 25 years; monthly payments may be calculated based on your income
- Grace period: Six months
Private student loans for trade school
Another option you have when paying for trade school is to take out a private student loan.
These are loans offered by banks, credit unions, and online lenders. They typically have higher interest rates than federal loans, but also allow you to borrow more.
To take out a private loan, borrowers usually need to meet the lender’s income and credit score requirements; however, these loans are not based on financial need. Here are top picks from our partners.
College Ave
Editorial Selection: Best Overall
- Earn $150 cash back after completing your degree
- Up to 100% of costs are covered
- Your choice between 16 different repayment schedules
College Ave offers 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.
Key features:
- Rates (APR): 0.94% – 14.96%
- Loan amount: Between $1,000 and 100% of your school-certified cost of attendance
- Repayment terms: 5, 8, 10, or 15 years
- In-school repayment options: Full deferment, $25 monthly, interest-only, full principal and interest
- Grace period: 6 months, plus the option to apply for 6 more
- Cosigner release: Yes, after 24 on-time monthly payments
What stands out about College Ave’s Career Training & Trade School Loan
The career loan from College Ave can help you pay for up to 100% of your school-certified expenses, including tuition and personal expenses. It offers competitive variable and fixed interest rates and a $150 cash-back bonus when you complete your trade program.
Eligibility requirements for College Ave’s Career Training & Trade School Loan
In order to qualify for a career and trade school loan from College Ave, you (or your cosigner) will need to have a valid Social Security number and meet College Ave’s proprietary credit score requirements. You aren’t required to be attending full-time, but you do need to be attending an eligible school and must meet the school’s requirements for satisfactory academic progress.
Sallie Mae
Editorial Selection: Best for Cosigners
- Cosigners can be released after 12 consecutive, on-time payments
- Up to 100% of costs are covered
Sallie Mae is perhaps 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.
Key features:
- Rates (APR): 2.00% – 14.08%
- Loan amount: Between $1,000 and 100% of your school-certified cost of attendance
- Repayment terms: 5 to 15 years
- In-school repayment options: Full deferment, $25 monthly, or interest-only
- Grace period: 6 months
- Cosigner release: Yes, after 12 on-time monthly payments
What stands out about Sallie Mae’s Student Loan for Career Training
Students can borrow from Sallie Mae whether they’re in school full time, half time, or part time. This trade school loan can cover tuition, fees, books, as well as tools, equipment, and other trade-related supplies you may need for school.
Eligibility requirements for Sallie Mae’s Student Loan for Career Training
Student borrowers (and often, cosigners) will need to meet certain credit score and income criteria in order to qualify for a Sallie Mae Student Loan for Career Training. Students (or their cosigner, if they’re an international student) will also need to have a valid Social Security number.
Ascent
Editorial Selection: Best for a Soft Credit Check
- Up to 100% of costs are covered
- Check your rate without impacting your credit
Ascent is a private student lender offering cosigned and non-cosigned loans for undergraduate, graduate, professional, and career program students. Its Career Training and Development Loan is a fixed-rate product available to students in eligible certification or professional trade programs at eligible schools.
Key features:
- Rates (APR): Not disclosed
- Loan amount: Between $2,000 and 100% of your school-certified cost of attendance
- Repayment terms: 5, 7, or 10 years
- In-school repayment options: Full deferment, interest-only, or full principal and interest
- Grace period: 3 months
- Cosigner release: Not disclosed
What stands out about Ascent’s Career Loan
A Career Loan from Ascent is only available as a fixed-rate product, with three repayment options and a shorter, three-month grace period after graduation. There are no fees, however, and borrowers can pay off their loan ahead of schedule without penalty. Borrowers, including DACA students, can apply with or without a cosigner.
Eligibility requirements for Ascent’s Career Loan
Ascent borrowers must be at least 18 years old and either a U.S. resident, permanent resident, or DACA student. They can’t have a history of student loan default, and must meet Ascent’s credit criteria or add a creditworthy cosigner.
How to apply for trade school loans
If you’re looking to get a student loan for trade school, there are a few important steps you should follow.
- Fill out the FAFSA. The FAFSA, or Free Application for Federal Student Aid, is the first place you should start when you’re seeking financial aid for educational expenses. This form, which needs to be completed annually, takes into account your school expenses and factors like family size and income. This information is used to determine your financial need and calculate your eligibility for certain grants and federal loans.
- Accept federal aid options. Federal student loans offer fixed interest rates that are usually lower than what you’d get with a private lender. They also come with certain benefits and features that private loans don’t, making them the best first option when it comes to funding trade school.
- Consider private student loans to fill the gaps. If your federal loans, grants, and scholarships don’t cover all of your educational expenses, you may need to turn to private loans. These loans may have variable or fixed rates and require a creditworthy primary borrower or cosigner.
- Compare terms and find a cosigner (if needed). It’s wise to shop around before choosing a private loan to ensure that you’re finding the lowest interest rate and best possible loan terms. Adding a creditworthy cosigner may open the door to additional loans and/or lower rates.
Other options if you can’t get a student loan for trade school
In some cases, you may find that student loans aren’t an option, either because you’ve been denied for a loan or because 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 expenses.
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 up front. In turn, the student agrees to pay the school or lender a percentage of their income once they enter the workforce.
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
Federal grants and scholarships are available for trade school students. Neither trade school grants nor scholarships need to be repaid, meaning that they essentially offer free money to students who qualify.
When it comes to trade schools, each school generally offers its own scholarships and grants. There are also a few state-based and third-party programs as well. Most of these programs are offered to certain groups of students, such as children of military personnel or adults reentering the workforce.
