July 2021
College and Tax Planning

Trade schools provide an opportunity to quickly learn career skills without the need for a four-year degree. Instead, you can earn an associate’s degree or the skill certification necessary to pursue a career in fields like dental hygiene, information technology, carpentry, HVAC, and more. Although most students attending four-year colleges take out student loans to fund their education, student loans for trade schools are limited. Here’s a look at some student loan options available for individuals attending a trade school.

Federal student loans

Federal student loans are designed with four-year college students in mind. The first requirement is being enrolled at least half-time to qualify for federal student aid. Then, the coursework you’re pursuing must be from an eligible program at an accredited school. The best way to get clarity on federal financial aid is to contact the school’s financial aid office. The school’s financial aid administrators can tell you immediately what funding options are available and how to qualify.

If the school is eligible, apply for student loans by submitting the Free Application for Federal Student Aid (FAFSA). The federal government uses the FAFSA form to determine a student’s financial need. Exhaust federal student loan options before taking out a private loan. Federal student loans come with additional benefits like more repayment plans, loan deferment and forbearance, loan forgiveness, and more. The Federal direct loan program features fixed interest rates for the life of the loan.

Private student loans

Private student loans are another potential source of funding to pay for trade school. Unfortunately, private loans tend to be just as restrictive for non-degree borrowers, like undergraduate and graduate students. Some private lenders offer specific student loans for trade school and other career training. Sallie Mae, for example, has the Sallie Mae Career Training Smart Option Student Loan for individuals pursuing trade certificate programs and other professional training.

Your child or grandchild might qualify for student loans with other private lenders, but they will need to meet their requirements. Typically, private lenders only lend money to students attending an approved Title IV not-for-profit college or university. Requirements like this and others limit how many places you can get a private student loan for trade school. Also, remember that qualifying for a private student loan is based on their credit. If they can’t meet specific credit and income requirements, your child or grandchild’s may need a cosigner to qualify. However, keep in mind that puts someone else on the line, financially, if they can’t pay the bill.

If the school being attended school qualifies for federal or private funding, taking out a student loan is a viable option to help cover trade school costs. Since trade school programs typically last under two years, your total bill should be less than at a traditional college. If you have questions on the best way to fund your child or grandchild’s trade school cost, give us a call at the office to set up a review!

If you have questions, please contact us.

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