Yes, you can use student loans to pay for trade school. If your school is accredited and takes part in federal student aid, you can borrow federal Direct Loans to cover tuition, tools, books and living costs, just as you could at a college. Private loans are an option for any gap that remains.
Borrow carefully. Trade school is often far cheaper than a four-year degree, so many students can cover most of the cost with grants and scholarships and borrow only a little. Start with free money, then federal loans, and use private loans last.
Recent changes (as of October 2026)
These changes apply to federal loans first disbursed on or after July 1, 2026, most of them under the federal budget law signed in July 2025.
- New repayment choices. New borrowers can choose only between the Tiered Standard plan and the income-based Repayment Assistance Plan (RAP). SAVE has ended, and PAYE and ICR close to everyone by July 1, 2028.
- Parent PLUS limits. Parents can now borrow up to $20,000 a year and $65,000 in total per dependent student. Previously there was no set cap below the cost of attendance.
- Part-time borrowing. Loan limits are now reduced for students enrolled less than full time, in line with how Pell Grants work. Ask your school how this applies to your schedule.
- Workforce Pell. Since July 1, 2026, Pell Grants can cover some short programs (8 to 15 weeks) once their state approves them. This may reduce how much you need to borrow. See Pell Grants for Trade Schools.
What’s coming next
- July 1, 2027: New interest rates are set for loans first disbursed in 2027-28, based on the May 2027 Treasury auction.
- July 1, 2028: PAYE and ICR close, and borrowers in those plans must move to RAP or IBR.
Federal student loans for trade school
Federal loans are the best place to start if you need to borrow. They don’t require a credit check (except PLUS loans), have fixed interest rates, and come with protections that private loans don’t offer, such as income-based payments, deferment, and loan forgiveness and discharge programs.
Types of federal loans
- Direct Subsidized Loans are for undergraduates with financial need. The government pays the interest while you’re in school at least half time, during your six-month grace period, and during deferment.
- Direct Unsubsidized Loans are for all eligible undergraduates, whether or not they have financial need. Interest builds from the day the loan is paid out.
- Direct PLUS Loans for parents let the parent of a dependent student borrow, subject to a credit check and the caps above.
2026-27 interest rates and fees
For loans first disbursed July 1, 2026 to June 30, 2027:
| Loan | Fixed interest rate | Origination fee |
|---|---|---|
| Direct Subsidized and Unsubsidized (undergraduate) | 6.52% | 1.057% |
| Parent PLUS | 9.07% | 4.228% |
The origination fee is deducted from each disbursement, so you receive slightly less than you borrow.
How much you can borrow
| Year in school | Dependent students | Independent students* |
|---|---|---|
| First year | $5,500 (up to $3,500 subsidized) | $9,500 (up to $3,500 subsidized) |
| Second year | $6,500 (up to $4,500 subsidized) | $10,500 (up to $4,500 subsidized) |
| Third year and beyond | $7,500 (up to $5,500 subsidized) | $12,500 (up to $5,500 subsidized) |
| Total limit | $31,000 (up to $23,000 subsidized) | $57,500 (up to $23,000 subsidized) |
*Dependent students whose parents are denied a PLUS loan can also borrow at the independent limits.
Limits are lower for many trade school programs. If your program is shorter than a full academic year, or you attend less than full time, your school will reduce your loan limit to match. Your school can never lend you more than its cost of attendance minus other aid.
Who qualifies
To get a federal student loan you need to:
- Be a U.S. citizen or eligible noncitizen. International students don’t qualify.
- Be enrolled at least half time in an eligible program at a school that takes part in federal student aid.
- Have a high school diploma, GED or recognized equivalent, or qualify through an approved ability-to-benefit option. See Trade School Requirements.
- Not be in default on an existing federal student loan.
- Make satisfactory academic progress once you’re enrolled.
Subsidized loans also require financial need. Your credit history doesn’t matter for Direct Subsidized or Unsubsidized Loans.
How to apply
- File the FAFSA at StudentAid.gov and list your trade school’s federal school code. See our FAFSA guide for trade schools.
- Review your FAFSA Submission Summary for errors.
- Compare your school’s aid offer. It will list grants, scholarships and loans. Accept free money first.
- Accept only the loan amount you need. You can accept less than the amount offered.
- Complete entrance counseling and sign the Master Promissory Note on StudentAid.gov.
- Your school receives the money and applies it to tuition and fees. Anything left over is refunded to you for other costs.
Private student loans for trade school
Private loans come from banks, credit unions and online lenders such as Sallie Mae and College Ave. They can fill a gap after grants, scholarships and federal loans, but they cost more and protect you less.
- Credit-based. Approval and your rate depend on your credit or a cosigner’s. Rates may be fixed or variable.
- School certification. Most lenders ask your school to confirm your enrollment and cost of attendance, so your trade school must be one the lender works with.
- Fewer protections. No income-based plans, no PSLF, and limited deferment. Some lenders release a cosigner after a number of on-time payments.
- Compare offers. Look at the APR, fees, repayment term and hardship options, not just the advertised starting rate.
Tip: Be wary of school-arranged financing or “income share agreements.” Read the contract carefully, and compare it with federal loans first.
Repaying your loans
Federal loans give you a six-month grace period after you leave school or drop below half time. For loans first disbursed on or after July 1, 2026, you choose between:
- Tiered Standard plan: fixed payments over 10 years if you owe less than $25,000, 15 years for $25,000 to $49,999, 20 years for $50,000 to $99,999, and 25 years for $100,000 or more.
- Repayment Assistance Plan (RAP): payments of 1% to 10% of your income, minus $50 a month per dependent, with a $10 monthly minimum. Any remaining balance is forgiven after 30 years.
Borrowers whose loans were all made before July 1, 2026 can also use the older standard, graduated and extended plans and Income-Based Repayment until July 1, 2028. Read more in Student Loan Forgiveness for Trade Schools.
Private loans follow the terms in your contract. Ask your lender about forbearance or modified payments before you miss a payment.
Before you borrow: a quick checklist
- Have you filed the FAFSA and applied for grants and scholarships?
- What do graduates of this program typically earn, and what share find jobs in the field? Ask the school for its placement and licensing exam pass rates.
- Is your total debt at graduation lower than your expected first-year salary? That’s a common rule of thumb for borrowing that you can afford.
Frequently asked questions
Can I get federal student loans for trade school?
Yes, if your school is accredited and takes part in federal student aid, and you’re enrolled at least half time in an eligible program. File the FAFSA to apply.
Do I need good credit to get a trade school loan?
Not for federal Direct Subsidized or Unsubsidized Loans. Parent PLUS loans and private loans require a credit check.
How much can I borrow for trade school?
Dependent first-year students can borrow up to $5,500 in federal Direct Loans for 2026-27, and independent students up to $9,500. Shorter programs and part-time enrollment have lower limits.
What is the interest rate on federal student loans for 2026-27?
6.52% fixed for undergraduate Direct Loans first disbursed between July 1, 2026 and June 30, 2027, plus a 1.057% origination fee.
Can international students get loans for trade school?
Not federal loans. Some private lenders lend to international students with a U.S. cosigner.
What repayment plans are available for new loans?
Loans first disbursed on or after July 1, 2026 can be repaid under the Tiered Standard plan or the income-based Repayment Assistance Plan (RAP).
The bottom line
Use grants and scholarships first, then federal loans, and borrow only what you need. Turn to private loans last, after comparing several offers. A smaller loan matched to a program with strong job placement is the best way to make sure trade school pays off.
Last reviewed: October 2026