Earlier this year, the U.S. Department of Labor announced $150 million in grants to support the national expansion of apprenticeships in key industry sectors. The grant program aims to increase apprenticeship opportunities for all Americans, including veterans, military spouses and underrepresented groups in apprenticeship, such as women, people of color and ex-offenders.
As more Americans are offered the opportunity to explore affordable career training options, questions arise regarding the cost of apprenticeship programs and how they may be an option for those wishing to avoid taking on more student loan debt than they can afford.
As defined by the U.S. Department of Education, an apprenticeship is a “training system that combines job-related instruction with structured on-the-job learning experiences.” Sometimes the related classroom instruction may be offered by postsecondary institutions, like community colleges, which means that federal student aid funding may be used to support students in apprenticeships.
The increased funding will offer new job seekers more opportunities as apprenticeships open that will focus on information technology, advanced manufacturing, banking and finance, and health care.
Here’s what prospective and current student loan borrowers should know about paying for these training programs.
It is possible to avoid student debt altogether, but some may choose to explore financial aid options. Qualifying apprenticeship programs may allow enrolled participants access to federal funds through grants or loans. How much financial aid is awarded to each individual is determined by the overall cost of enrollment, which is set by the apprenticeship program according to federal guidelines.
Eligibility is also dependent upon the intended outcome of the program and whether participants receive a certificate, degree or diploma. The institution must also meet state guidelines while being appropriately accredited and offer instructional tracks that are of a certain minimum length.
Students should first review their eligibility for federal grants such as the Pell Grant, Federal Supplemental Educational Opportunity Grant, TEACH Grant and military service grants. Federal work-study funds can also play a role in covering some of the cost of training wages.
Only accredited programs are eligible for loans. Student loans may be necessary to cover costs not paid by grants and work-study funds.
The range of options for program participants will depend on the status of the institution and if it is deemed eligible for federal student aid. Qualifying programs offer enrollees the opportunity to borrow through the federal direct loan program.
It helps to know the apprenticeship’s accreditation status before you enroll, as this will tell you whether it will meet eligibility guidelines for federal financial aid.
Borrow only what you really need. The Student Loan Ranger advises caution and good judgement when it comes to determining when and how much to borrow. Borrowing any amount while enrolled in a program should support the goal of completing the apprenticeship and not be used for ancillary expenses like recreation.
When in doubt about financial decisions related to an apprenticeship program and student loans, work with the program’s financial aid office directly. You can also consult the U.S Department of Education and the Consumer Financial Protection Bureau for more information about specific borrowing options.
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How to Decide Whether to Take Out Student Loans for an Apprenticeship originally appeared on usnews.com