How to pay for trade school costs

Trade, vocational and technical schools that offer training for students interested in a particular field are far less costly than traditional four-year colleges. The Association for Career & Technical Education says that in 2016-2017 students could attend public community, vocational and technical colleges for an average of $3,520 a year.

The National Center for Education Statistics reported that the average cost of a year at four-year public college stood at $19,488 in the 2015-2016 academic year.

That’s a big difference. Even better, students attending accredited trade or vocational schools can apply for the same type of student loans as can those attending four-year colleges. The difference, though, is that these students will have to borrow less to earn their degrees or certification. And many career and vocational colleges offer grants or financial assistance that can lessen the cost of attending these institutions.

Are you considering trade or vocational schools as an alternative to traditional college? That might be a wise financial choice. And you’ll have plenty of options to pay for such an education.

Why trade school? Lower costs and a quicker education

Midwest Technical Institute, a vocational school with campuses in Illinois and Missouri, said that the average cost of earning a four-year bachelor’s degree from a traditional college is about $127,000. Midwest Technical Institute, though, offers programs that cost far less. An HVAC technician training program, for instance, costs less than $15,000.

Students might go to a trade or vocational school to earn a nursing or medical credential. They might need to earn a certification to become an electrician or HVAC technician. Other programs are designed to help students start careers as dental assistants, medical coding specialists or pharmacy technicians.

And they do this efficiently. Students might earn their certification or credential in less than a year. That’s a far faster process than the four years it takes to earn a bachelor’s degree.

“I tell people that what makes the most financial sense is to pursue what you really want to do then choose the path of least resistance,” said Jarrod Nagurka, advocacy and public affairs manager for the Association for Career and Technical Education in Baltimore. “You might go to a technical college to knock some coursework out of the way and then pursue your bachelor’s degree. You might just go for your certification without worrying about the costs of a bachelor’s degree.”

Barry Layne, chief operating officer and chief marketing officer for Boca Raton, Florida-based Alternatives to College, an online directory of post-secondary education options, said that vocational schools are the right choice for a variety of students.

“This is a national trend,” Layne said. “The country is moving toward practical, outcomes-based training and education that can get you from concept to completion more quickly than a traditional college environment will.”

How to pay for school

Because trade, vocational and career education schools cost less, financing an education at one of these institutions is an easier task. That doesn’t mean a certification or trade school degree is cheap. To cover these costs, you might need to navigate the financial aid system.

“The value of a four-year college education for everyone is being questioned,” said Russell Freeman, president of Coyne College, a vocational school in Chicago. “There are some kids who graduate from high school and don’t know what they want to do. They take a program, learn a trade and go to work.”

But how to pay for such an education? Here are some options:

Federal student loans: Students can apply for a maximum of $9,500 in federal students loans a year if they are considered independent students and $5,500 if they are considered dependent students.

Students are considered independent if they are not receiving financial assistance from their parents or if they are married, a Military veteran or active-duty member of the Military, have a child or dependent or they turn 24 before January first of the upcoming academic year.

Students are considered dependent if they rely on their parents for financial assistance and report parental income on their FAFSA.

You will have to repay student loans, but federal loans come with the lowest interest rates and the best terms of all student loan types.

Not all students of trade or vocational schools will qualify for federal student loans. The school you are attending must be accredited, which means that a private education agency or association has evaluated the school and its programs and determined that it meets certain standards.

You can find out if a trade or vocational school is accredited by searching the Database of Accredited Postsecondary Institutions and Programs or Council for Higher Education Accreditation.

To qualify for federal student loans you’ll first have to complete the Free Application for Federal Student Aid, better known as your FAFSA.

You’ll provide information about your income — or your parents’ income if you are a dependent student – when filling out your FAFSA. Depending on your income, you might qualify for grants or scholarships, which is money you don’t have to pay back. You or your parents, though, might make enough money so that you can only qualify for federal student loans, which you will pay back, with interest, after you graduate.

Federal Pell Grant: You might qualify for a Federal Pell Grant. Because this is a grant, not a loan, you don’t have to repay the money after you graduate. The maximum you can earn with a Pell Grant is $6,195 for the 2019-2020 academic year. Not all students qualify for this grant, with eligibility largely based on your or your parents’ incomes. You are automatically considered for these grants when you fill out your FAFSA.

Federal Supplemental Educational Opportunity Grant: You might also qualify for a Federal Supplemental Educational Opportunity Grant. These grants are administered directly by the financial aid offices of individual schools, and not all schools offer them. You’ll have to check with your individual trade or vocational school. Again, you’ll be considered for this assistance when you fill out your FAFSA. You can receive from $100 to $4,000 a year, depending on financial need.

Career Training Smart Option Student Loan: SallieMae offers this loan program for professional training and certificate courses at trade schools that don’t offer degrees. Variable interest rates on this loan range from 6.37% to 13.71% depending on your credit. You can borrow enough to pay for all your education.

Wells Fargo Career and Community College Loan: Wells Fargo offers this private loan designed for students attending a two-year school, career-training program or non-traditional school. If you choose a variable interest rate loan, your APR will range from 7.02% to 12.25%. If you choose a fixed-interest rate loan, your APR will range from 7.24% to 12.45%. You can borrow up to $15,000 every year for a two-year school and up to $20,000 a year for a four-year school.

Direct PLUS Loan: If your parents are helping you pay for trade, career or vocational school, they can apply for a Direct PLUS Loan from the federal government. These loans work much like traditional federal student loans, only they are taken out in your parents’ names and it is their responsibility to pay them back. The interest rate on this loan for the 2019-2020 academic year was a fixed 7.08%.

Imagine America Career College Scholarship: This scholarship is available for students attending career or trade colleges and provides gifts of $1,000 for students who earn it. Because this is a scholarship, you won’t have to repay.

Scholarships from trade or vocational schools: The trade or vocational school you attend might offer its own scholarships. Midwest Technical Institute and its sister school Delta Technical School, for example, offers the Midwest Technical and Delta Technical College High School Scholarship. Students who qualify for this scholarship receive varying amounts of funding. Call your school’s financial aid office for information about scholarships it might offer.

Scholarships from employers and associations: Several trade associations and employers offer their own scholarships for students who are attending vocational schools. AmericanTrucks, for instance, offers scholarships worth $2,000 to students enrolled in a secondary vocational school or technical institute. AmericanMuscle offers $2,000 scholarships to students pursuing an automotive-themed major. And the American Welding Society offers several scholarship programs for students training to become a welder.

Cut down on the expenses of school supplies: Tuition isn’t the only expense you’ll face at trade school. You’ll also have to pay for books and supplies, which might include expensive laptop computers. You can use a student credit card that offers cash back bonuses or rewards points to charge these items. This will help boost how quickly you earn rewards points or cash back bonuses. Just make sure you don’t charge more than you can afford. Only charge what you can pay back in full each month so that you can avoid carrying a balance and racking up interest on your purchases.

Dan Rafter

Finance Writer

Dan has written about personal finance, credit cards, mortgage loans, credit scores and personal loans for more than 20 years. He’s written for the Chicago Tribune, Washington Post, and many others.