Paying for trade school or technical college can feel overwhelming, but federal student loans are designed to make education more accessible. Unlike private loans, federal loans usually have lower fixed interest rates, flexible repayment plans, and options for loan forgiveness in certain careers.
Types of Federal Student Loans
- Direct Subsidized Loans – Available to undergraduate students with financial need. The government pays the interest while you’re in school at least half-time, during the grace period, and during approved deferments.
- Direct Unsubsidized Loans – Available to undergraduate, graduate, and professional students. These loans are not based on financial need, and you are responsible for the interest from the time the loan is disbursed.
- Direct PLUS Loans – Credit-based loans for graduate students or parents of dependent undergraduate students. They can help cover costs not met by other financial aid.
- Direct Consolidation Loans – Combine multiple federal loans into a single loan with one monthly payment, which may simplify repayment.
How to Apply
The first step to getting any type of federal loan is completing the Free Application for Federal Student Aid (FAFSA). Your FAFSA results determine your eligibility for federal loans, grants, and work-study programs. After your application is processed, your trade school or technical college will send you a financial aid offer.
Before receiving funds, new borrowers must complete entrance counseling. This short online course ensures you understand your loan obligations before signing.
Repayment & Benefits
Federal loans include features designed to make repayment manageable:
- Fixed interest rates, usually lower than private loans or credit cards.
- Income-driven repayment options that adjust monthly payments to your earnings.
- Deferment and forbearance if you experience financial hardship.
- Public Service Loan Forgiveness (PSLF) and other programs that may forgive part of your loan if you work in qualifying fields.
- No prepayment penalties — you can pay your loan off early without extra fees.
Private Loan Options
While federal loans should be your first choice, some students turn to private lenders for additional funding. One example is the Sallie Mae Career Training Smart Option Loan, which can cover the full cost of certain trade school programs. Private loans may carry higher interest rates and fewer repayment protections, so compare carefully before borrowing.
Learn More
- Scholarships, Grants & Financial Aid for Trade Schools
- Explore High-Paying Careers
- Choosing an Online Trade School
Federal loans can be a smart way to invest in your future career, as long as you borrow responsibly and understand your repayment options.