Using Student Loans to Fund Technical, Alternative Education

Many good jobs require additional training beyond high school, but a four-year degree isn’t necessarily the only way to an advanced career path.

Technical and alternative schools are great training and education options to college. A prosperous technical job can bring career satisfaction, a solid income and the benefits of doing something you really enjoy. But can you use student loans to finance such an education?

A study by education company Pearson projects that by 2030, technical careers in construction, information technology, health care and other skills-based industries will be booming. Preparation for these careers of the future can come not just from traditional four-year schools, but also career colleges, community colleges, vocational and trade schools, career training centers, apprenticeship programs, Job Corps centers and military vocational programs.

When thinking about technical education, be sure to see if your local community college has any tuition-free programs. Tuition-free community colleges could be an option for students who meet eligibility requirements. While there will still be expenses like transportation and textbooks, if you live in a region where you can get a technical education tuition-free or even take initial classes as you pursue a technical career, it is worth exploring.

For students considering an apprenticeship program, one of the benefits is that participants can get paid while they learn on the job in a career field of interest such as information technology and health care. This can limit student loan debt and may help a student avoid borrowing for school altogether — for instance if the program qualifies for federal financial aid and the student is eligible for a Pell Grant.

[Read: What Expenses You Should Cover With Student Loans.]

Paying for Alternative Higher Education

There are several factors to consider when looking to finance an investment in any kind of technical or alternative education.

A good place to start is to assess what amount of student debt it will take and explore financing opportunities in addition to student loans.

While student loans may be an option, note that federal student loans are reserved for accredited institutions, and not all accredited institutions participate in federal student aid programs.

In fact, many career schools and technical and vocational programs are unaccredited, making students who attend them ineligible for federal financial aid such as federal student loans, the Pell Grant and federal work-study. That’s something to keep in mind when exploring schools and programs.

The National Center for Education Statistics’ College Navigator tool can help you find out if the programs you’re interested in are accredited and eligible for federal student aid.

[Read: Understanding the Types of Federal Student Loans Available.]

Private student loans are an option, but they typically have higher interest rates and less favorable terms than federal student loans and are harder to qualify for because they require a credit check and approval. Some lenders such as Sallie Mae also offer loans for trade school and other career training programs.

Once you narrow your choices and options among institutions, contact student services or the financial aid office at each. If your plan includes taking prerequisite technical courses that are needed to enter a degree program, federal student loans may be an option depending on your field of study. However, if your chosen career program doesn’t provide a degree, you may not have access to federal student loans.

When weighing student loan options, take advantage of resources offered by organizations like the Consumer Financial Protection Bureau, which has information on its website about the reputation of private lenders.

The Better Business Bureau also provides information online regarding its investigations of consumer complaints about lenders.

[READ: How to Resolve a Student Loan Dispute.]

Funding your technical education is only part of your overall financial picture. Student debt should be looked at in context with your full financial situation such as existing debt, expenses and other obligations.

Once you have chosen a lender, borrow only what you need for your program. It’s important to remember that every dollar you borrow will cost you more during repayment because of interest. This is advice to take to heart because the amount of debt you take on will affect your full financial picture in the long term.

Use loan money only on essentials, focusing just on direct educational costs that you absolutely cannot afford out of pocket.

Regardless of the type of vocational or alternative program you ultimately choose, working with a national nonprofit financial counselor that specializes in student loan counseling can help you navigate all of the information available and make good choices.

More from U.S. News

Ways Cooperative Education Can Reduce Student Loan Borrowing

What to Expect From Student Loan Counseling

Consider School Accreditation When Determining a College’s Value

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