Student Loans for Trade School: What to Know for 2025

Student Finance & Loan Expert

Postsecondary education can be expensive. Fortunately, trade schools offer cost-effective education and training for jobs in high-demand industries, such as medicine, construction, and manufacturing. More than that, there are different loans available to trade school students. Thus, you can begin your career early and avoid hefty debts often associated with attending four-year programs at prestigious universities. To help you get started, I, a career-planning expert with over a decade of professional experience, created this in-depth guide to trade school student loans.

What are the benefits of trade school student loans?

Student loans make education accessible to individuals who want to equip themselves with the knowledge and skills necessary to land their chosen jobs quickly.
Instead of working to pay tuition throughout their program, students have the option to pay back student loans after they graduate. Thus, students can focus on their education and produce good learning outcomes at a faster pace.
Trade school student loans allow students to prepare for roles with competitive salaries. In 2023, medical assistants in the United States (US) had a median annual wage of $42,000.

What types of loans are available to trade school students for 2025?
Who is eligible for trade school student loans?
What documents are required for applying for trade school student loans?
Are there income requirements for obtaining trade school student loans?
How do I repay trade school student loans?
Is there loan forgiveness for trade school graduates?
How to Choose Between Federal and Private Student Loans for Trade Schools
What are the current interest rates for federal student loans for trade schools?
Are there any long-term financial risks with trade school student loans?
Does investing in trade school education offer competitive long-term career outcomes?
Are there scholarships available specifically for trade school students?
Can trade school education be effectively combined with advanced degree programs?
Is refinancing or consolidating trade school student loans a viable option?
Can trade school loans effectively cover living expenses like rent?
Can early repayment strategies minimize overall loan costs?
How can online education enhance trade school financial strategies?
How Do Credit Scores and Cosigner Options Impact Loan Approval?
Are there specific organizations that offer trade school scholarships?
How does financial aid for trade schools compare to traditional colleges?
What alternative funding options are available for specific professions or fields in trade schools?
Can trade school careers yield competitive long-term earnings compared to traditional bachelor's degree programs?
Other Things You Should Know about Trade School Student Loans

What types of loans are available to trade school students for 2025?

There is a gap in college graduation rates by race if you look at private and public school statistics. This is due to many factors, including financial standing. Fortunately, students of trade schools in the US may be eligible for two main types of loans: federal direct student loans and private loans. I created the section below for you to explore and learn more about student loans that may be available to you.

Federal Direct Student Loan Program

Federal direct student loans are low-interest loans provided by the US Department of Education to help students pay for postsecondary education. They include the following loan types:

Direct Subsidized Loans. These are need-based, with the government paying the interest while the student is in school.
Direct Unsubsidized Loans. These are not based on financial need and accumulate interest immediately.
Direct PLUS Loans. These are loans available to professional students, graduate students, and parents of undergraduate students.
Direct Consolidation Loans. These are the amalgamation of a student’s federal student loans, placing them in one loan with one loan provider.

Federal loans offer flexible repayment options, including income-driven plans, which adjust monthly payments based on income. Borrowers can also qualify for loan forgiveness programs, such as Public Service Loan Forgiveness, under certain conditions.

Private Loans

Private student loans are non-federal loans provided by private lenders, such as banks, credit unions, and online lenders to help cover education-related expenses. These loans usually have variable or fixed interest rates, require a credit check, and often need a cosigner if the borrower has limited credit history.

Sallie Mae. Sallie Mae is a private lender and “education solutions” company in the US. It provides loans for undergraduate, graduate, and trade school students. Sallie Mae offers the Smart Option Student Loan® for career training and trade certificate courses, with fixed interest rates starting at 4.25% and variable interest rates starting at 5.37%. This load type allows students to apply once for one year’s worth of financial support, including for tuition, course materials, and transportation fees.
Navient. Navient is an education finance and business processing company that offers student loans and scholarships. In 2017, Navient bought JPMorganChase Bank’s private student loans portfolio, expanding its client base. The finance firm offers a 4.29% interest rate for clients who apply with a cosigner. Meanwhile, independent applicants are given a 5.6% interest rate.

Who is eligible for trade school student loans?

Eligibility for trade school student loans generally depends on several key factors. For federal student loans, applicants must be US citizens or eligible non-citizens with a valid Social Security number. They must also complete the Free Application for Federal Student Aid (FAFSA). The trade school must be accredited and must participate in federal student aid programs.

Private student loans require a credit check and often a cosigner if the applicant has limited or no credit history. Additionally, most lenders require the student to be enrolled at least half-time in an eligible program.

What documents are required for applying for trade school student loans?

Obtaining trade school student loans involves meeting several key requirements to ensure eligibility and proper use of funds. I have found that the following are three main requirements:

Enrollment in an Accredited Program. To qualify for federal student loans, students must be enrolled in a trade school or technical program that is accredited and participates in federal student aid programs. This ensures that the education provided meets certain quality standards.
Completion of the FAFSA. For federal student loans, completing the FAFSA is mandatory. This form collects financial information to determine eligibility for federal aid, including grants, work-study programs, and loans.
Creditworthiness. Private student loans require a credit check to assess the borrower’s credit history and financial stability. Applicants with limited or no credit history may need a cosigner to qualify and secure favorable loan terms, such as lower interest rates.

Are there income requirements for obtaining trade school student loans?

Income requirements for obtaining trade school student loans vary between federal and private loans. For federal student loans, there are no specific income thresholds. Instead, eligibility and loan amounts are determined based on financial need as assessed through the FAFSA. This process takes into account the student's and their family's income, assets, and other financial factors.

Meanwhile, private student loans often have more stringent income requirements. Lenders typically evaluate the borrower’s or cosigner’s income to ensure they can repay the loan. A stable and sufficient income, along with a good credit score, can improve the chances of approval and may secure better interest rates and terms for a good budget for college student or trade school students.

How do I repay trade school student loans?

As you explore different options for postsecondary education, you may wonder, “Why is college so expensive?” Luckily, you may be eligible for student loans to help cover the average private college tuition and trade school tuition. Repayment options for trade school student loans vary based on the type of loan. The following are the main options:

Standard Repayment Plan (Federal Loans). This plan requires fixed monthly payments over a 10-year period. It ensures loans are paid off quickly but may result in higher monthly payments compared to other plans.
Graduated Repayment Plan (Federal Loans). Payments start lower and increase every two years. This plan is beneficial for those expecting their income to grow over time.
Income-Driven Repayment Plans (Federal Loans). These plans, such as Income-Based Repayment (IBR) and Pay As You Earn (PAYE), adjust monthly payments based on income and family size. They offer lower payments for those with limited income but extend the repayment period.
Interest-Only Payments (Private Loans). Some private lenders allow interest-only payments while in school, reducing the immediate financial burden but not decreasing the principal amount.
Deferred Payments (Private Loans). These payments are postponed until after graduation. This option helps students focus on their education without the pressure of loan payments but can lead to higher overall interest costs.

standard repayment plan for federal loans

Is there loan forgiveness for trade school graduates?

Loan forgiveness programs can significantly benefit trade school graduates by reducing their debt burden. Federal programs, such as the Public Service Loan Forgiveness (PSLF), are available to those working in qualifying public service jobs, including healthcare, education, and government roles, after making 120 qualifying payments under an income-driven repayment plan.

Another option is the Income-Driven Repayment (IDR) forgiveness, where any remaining loan balance is forgiven after 20 or 25 years of qualifying payments. While private loans do not usually offer forgiveness, some lenders may provide relief in cases of extreme financial hardship or disability. Trade school graduates should explore these options to understand eligibility and maximize their financial benefits.

The chart below provides a visualization of the repayment term and forgiveness of the different repayment plans for federal student loans, according to current data from the Consumer Financial Protection Bureau.

How to Choose Between Federal and Private Student Loans for Trade Schools

Selecting the right type of student loan is essential for minimizing financial strain while pursuing trade school education. Federal student loans are often preferred due to their fixed interest rates, income-driven repayment plans, and eligibility for forgiveness programs. However, these loans may not always cover the total cost of education, such as tuition, tools, and living expenses.

This is where private student loans can be advantageous. These loans, provided by private lenders, generally allow for higher borrowing limits and can complement federal aid. Although private loans lack the repayment flexibility of federal loans, they may offer competitive interest rates, especially for borrowers with excellent credit. To ensure a well-informed decision, it’s crucial to compare federal and private loan options while considering the total cost of borrowing, repayment terms, and any other associated benefits. If you’re exploring alternative financing options for trade schools, check out this comprehensive guide to the best private student loans to find lenders suited to your specific needs.

What are the current interest rates for federal student loans for trade schools?

Interest rates for federal student loans are set annually and remain fixed for the life of the loan. For the 2024–2025 academic year, federal direct undergraduate loans have an interest rate of 6.53%.

Meanwhile, federal student loans available to graduate students have an interest rate of 8.08%. Moreover, federal plus loans for graduate students and parents of undergraduate students have a 9.08% interest rate (Nova, 2024).

These rates may generally be lower than those of private student loans, making federal loans a more affordable option for many students. Additionally, federal loans offer benefits, such as income-driven repayment plans and potential forgiveness programs, which can help manage the overall cost of borrowing.

The chart below shows a visualization of the interest rates offered for federal student loans for the academic year 2024–2025, based on current data from the US Department of Education (Nova, 2024).

Are there any long-term financial risks with trade school student loans?

Long-term financial risks include extended repayment periods that increase overall interest costs and the potential for negative impacts on credit scores if repayment challenges arise. Students should critically review loan terms to ensure an understanding of variable interest rates, hidden fees, and the implications of refinancing or consolidation. For professionals in niche fields, especially those in healthcare or veterinary programs, assessing specialized financing options is vital—consider resources such as paying for vet school to determine if alternative loan products better align with long-term financial planning.

Does investing in trade school education offer competitive long-term career outcomes?

Trade school financing can result in early workforce entry, reduced debt exposure, and prompt return on investment in high-demand sectors. Graduates often benefit from targeted training that aligns with industry-specific needs, positioning them for steady career advancement and competitive earnings over time. This focused approach also demands ongoing professional development and market research to adapt to evolving job requirements. In contrast, exploring options like online accredited bachelor degrees may provide broader academic exposure, yet requires weighing additional time and financial commitments against potential career benefits.

Are there scholarships available specifically for trade school students?

Trade school students in the US have access to various scholarships that can significantly reduce the cost of their education. Just keep in mind that you need to submit all necessary requirements, including your scholarship application letter, transcripts, and personal statement. I have found the following three notable scholarships:

Imagine America Foundation (IAF) Scholarships. IAF gives out scholarships specifically to students interested in career and technical education. Eligible students can receive up to $1,000 to help cover tuition and other education-related expenses.
Mike Rowe Works Foundation Work Ethic Scholarship. Founded by TV host Mike Rowe, who hosts the Discovery Channel show Dirty Jobs, this scholarship rewards students who demonstrate a strong work ethic and a commitment to mastering a skill. Scholarships are awarded to students pursuing training in skilled trades to help them cover tuition and other fees.
Horatio Alger Association Career & Technical Education Scholarship Programs. The Horatio Alger Association offers financial assistance to students in trade school through five scholarship programs: the National Career & Technical Education Scholarship; the John Hardin Hudiburg Career & Technical Education Scholarship; the Protective Life Career & Technical Education Scholarship; the Valencia College Career & Technical Education Scholarship; and the Warren Webster Scholarship Program. Depending on the program, recipients can get up to $10,000 each to cover tuition, fees, books, and supplies. The scholarship aims to support students who have overcome significant personal challenges and are committed to achieving their educational and career goals.

Can trade school education be effectively combined with advanced degree programs?

Trade school training increasingly aligns with evolving industry standards that value both practical expertise and academic excellence. Some institutions offer integrated pathways, allowing students to complement hands-on skills with advanced study, which can enhance strategic thinking and leadership potential. Such hybrid models create opportunities for accelerated career growth without foregoing the advantages of technical training. For example, partnerships between technical programs and universities that offer dual master's degrees enable students to gain a competitive edge while expanding their professional networks in a rapidly changing job market.

Is refinancing or consolidating trade school student loans a viable option?

Refinancing or consolidating trade school student loans may offer lower interest rates and simplified repayment by combining multiple loans into a single payment. Borrowers should carefully compare lender offers, assess fixed versus variable rate options, and review terms that might include fees or adjustments to repayment conditions. Evaluating creditworthiness, employment stability, and current debt levels can ensure that refinancing or consolidation aligns with long-term financial goals. In certain cases, exploring additional educational opportunities—such as the best online degree programs for working adults—can position borrowers for improved financing options in the future.

Can trade school loans effectively cover living expenses like rent?

Trade school student loans are sometimes used to cover non-tuition costs, including housing expenses. Borrowers should confirm that their loan package allows for allocation toward living expenses, as eligibility criteria and funding restrictions may vary between federal and private products. It is advisable to evaluate how such allocations could affect the overall loan balance and subsequent repayment terms. In addition, some lenders offer options specifically designed to supplement tuition financing with additional aid for accommodations, such as private student loans for housing.

Can early repayment strategies minimize overall loan costs?

Prepaying trade school student loans can reduce the total cost by lowering interest accrual over time. Students should verify that their loan terms allow for additional payments without penalties. Early repayment may decrease the principal faster, thus shortening the repayment period and reducing overall interest. It is advisable to compare conventional repayment plans with alternative options provided by various lenders, including options from the best private student loans, to identify the most cost-effective strategy.

How can online education enhance trade school financial strategies?

The integration of flexible online programs with traditional trade education can create additional avenues for financial planning and academic advancement. Students may use online platforms to access supplemental coursework or certifications while managing loan balances effectively. By comparing traditional trade school offerings with online accredited colleges that accept financial aid, individuals can evaluate innovative educational models that align with specific career goals and financial constraints.

How Do Credit Scores and Cosigner Options Impact Loan Approval?

Lenders rely heavily on robust credit evaluations to determine loan eligibility and secure favorable interest rates for trade school students. A strong credit score can lead to better terms, while limited credit history often necessitates a cosigner with established financial strength. This additional approval layer reduces perceived risk for private lenders and can improve overall loan conditions. Prospective borrowers should work on enhancing their credit profiles or consider a financially qualified cosigner to expand funding opportunities without compromising long-term financial goals. For an overview of alternative education financing options, consider exploring short degrees that pay well.

Are there specific organizations that offer trade school scholarships?

Aside from those previously mentioned, several more organizations provide scholarships specifically for trade school students, including the following:

American Welding Society (AWS) Scholarships. The AWS offers various scholarships for students pursuing careers in welding. These scholarships, such as the AWS Foundation National Scholarship, can provide up to $6,000 for tuition and related expenses.
Associated General Contractors (AGC) of America Scholarships. AGC provides scholarships to students enrolled in construction-related trade programs. It awards these scholarships to students who demonstrate academic excellence and a commitment to a career in construction.
National Association of Home Builders (NAHB) Scholarships. The NAHB offers scholarships to students pursuing careers in residential construction. Scholarships, such as the NAHB Professional Women in Building/National Housing Endowment Scholarships and Grants, provide financial assistance to female students, promote diversity, and encourage more women to enter the construction industry.

How does financial aid for trade schools compare to traditional colleges?

Financial aid for trade schools and traditional colleges share similarities, but there are key differences to consider. The following are three main points of comparison:

Types of Aid Available. Both trade schools and traditional colleges offer federal aid, including grants, loans, and work-study programs. However, trade schools often have fewer institutional scholarships and grants than four-year colleges and universities.
Loan Amounts. The loan limits for federal student loans are generally the same for both trade school and traditional college students. Despite this, trade school students may need to borrow less overall due to shorter program lengths and lower tuition costs.
Eligibility Criteria. Eligibility for federal financial aid is similar for both types of institutions, requiring completion of the FAFSA. Nevertheless, trade school students must ensure their programs are accredited and eligible for federal funding, which can be more restrictive than traditional colleges.

What alternative funding options are available for specific professions or fields in trade schools?

Students pursuing specialized professions, such as dental assistants or hygienists, may have alternative funding opportunities tailored to their career paths. Federal loans and scholarships are common, but some private lenders also cater to niche fields within trade schools. For example, if you’re pursuing a dentistry-related profession, exploring tailored financial products like dental student loans can help meet the unique financial needs of your training.

Additionally, industry-specific organizations and trade unions often offer grants or low-interest loans for students in particular fields. Some professional associations also provide funding based on merit or financial need. These alternatives can help reduce the financial burden while aligning closely with the academic requirements and career prospects of specific vocations.

Can trade school careers yield competitive long-term earnings compared to traditional bachelor's degree programs?

When evaluating long-term financial outcomes, it is important to balance the benefits of earlier workforce entry and lower debt against the potential for incremental income growth over time. Trade school graduates often secure stable roles in high-demand sectors, which can lead to reliable earnings and career advancement. Comparatively, certain bachelor's degree paths—especially in high-demand fields—may offer higher starting salaries and stronger long-term growth trajectories. For example, insights into the earning potential of advanced healthcare roles can be explored through the highest paying bachelor degrees in healthcare analysis. Prospective students should assess industry-specific trends, career stability, and personal financial goals to make informed decisions regarding their educational investments.

Key Findings

Trade school student loans include federal direct student loans and private loans.
Federal direct student loans are low-interest loans provided by the US Department of Education to help students pay for postsecondary education.
Private student loans are non-federal loans provided by private lenders, such as banks, credit unions, and online lenders, to help cover education-related expenses.
For the 2024–2025 academic year, federal direct undergraduate loans have an interest rate of 6.53%, while federal student loans available to graduate students have an interest rate of 8.08%. Moreover, federal plus loans for graduate students and parents of undergraduate students have a 9.08% interest rate (Nova, 2024).
The Imagine America Foundation (IAF) gives scholarships to students interested in career and technical education. Eligible students can receive up to $1,000 to help cover tuition and other education-related expenses.

Other Things You Should Know about Trade School Student Loans

How long does it take to pay off trade school student loans?

The time it takes to pay off trade school student loans typically ranges from 10 to 20 years. The duration depends on the loan amount, interest rate, and repayment plan chosen. Borrowers can shorten this period by making extra payments or choosing a more aggressive repayment plan if their financial situation allows.

Is trade school debt the same as college debt?

Trade school debt and college debt are similar in that both can include federal and private loans with varying interest rates and repayment terms. However, trade school debt is often lower because trade programs typically cost less and have shorter durations than traditional four-year colleges.

Who qualifies for student debt relief?

Eligibility for student debt relief typically depends on factors such as income level, type of loan, repayment plan, and employment in qualifying public service jobs. Programs, including Public Service Loan Forgiveness (PSLF) and income-driven repayment plans, offer relief to those meeting specific criteria, such as working in public service or having made a certain number of qualifying payments.

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