As the cost of college continues to increase, some students may find trade schools and vocational programs more appealing than four-year bachelor’s degrees.
“Trade school” is an informal term for career-focused education, and programs that fall into this category may also be called career and technical colleges or vocational schools. These can prepare students to work in construction, mechanics, the culinary arts and much more. They typically cost less than a four-year undergraduate degree and take less time to complete.
But trying to finance trade school can be complicated, especially if you’re not sure where to start. Read below to learn how student loans for trade school work.
[Read: Best Private Student Loans.]
Can You Use Federal Student Loans for Trade School?
You may not qualify for federal student loans if your program is not accredited. You can search for accredited schools through the Department of Education’s official database.
“Generally, to be eligible for federal financial aid, you have to be in an eligible degree or certificate program,” says Alisha Hyslop, senior director of public policy at the Association for Career and Technical Education.
Some schools grant associate degrees, while others only provide certificates. It’s possible to receive federal aid for either kind of program.
To apply for federal student loans, you must complete the Free Application for Federal Student Aid. The FAFSA is the government’s official application for federal student loans, as well as federal grants and work-study.
[READ Best Student Loan Refinance Lenders]
Should You Consider Private Student Loans for Trade School?
If you can’t get federal aid, you can apply for a private student loan. Unlike with federal loans, private lenders will run a credit check before approving you for a loan.
You will likely need a co-signer to qualify for a private loan, unless you have strong enough credit and meet other eligibility requirements. Adding a co-signer can also help you get a lower interest rate.
One major difference between federal and private loans is that private loans offer fewer repayment programs. Private loans also may have higher interest rates.
“For trade schools, if someone needs to borrow money, I would advise them to look at federal loans first,” says Jack Wang, financial aid advisor at Innovative Advisory Group.
Still, if you’re evaluating private lenders, your options include:
— Ascent Funding: Ascent’s loan options include “bootcamp loans,” which offer funding for eligible programs in data science, education, plumbing and more.
— College Ave: College Ave’s loans include the Career Loan with Success Rewards, which students can use for associate degrees. Students with this kind of loan can get $150 in cash for finishing their programs.
— Sallie Mae: Borrowers can consider Sallie Mae’s Smart Option Student Loan for Career Training, which can cover professional training and trade certificates.
[READ Best Parent Student Loans: Parent PLUS and Private]
How Can You Choose a Student Lender for Trade School?
If your program is eligible for federal and private student loans, it’s usually best to maximize your federal loans first.
If you don’t qualify for federal student loans, you will have to choose a private lender. When comparing private lenders, start by looking at the interest rate. It’s also important to look at factors such as whether or not the lender requires a co-signer and what fees you’ll be charged.
When deciding how much to borrow, consider how much you can expect to earn with your new training. You can find wage data for your future profession through the Bureau of Labor Statistics.
Other Types of Financial Aid for Trade School
In addition to federal student loans, you may qualify for federal grants. If you can afford to pay partly in cash, trade schools may also offer payment plans that charge low fees, such as $20 or $30 per semester.
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How Can You Get Student Loans for Trade School? originally appeared on usnews.com
