Refinancing Your Student Loans for Trade School

By Kevin Brouillard · December 26, 2023 · 7 minute read

We’re here to help! First and foremost, SoFi Learn strives to be a beneficial resource to you as you navigate your financial journey. Read more We develop content that covers a variety of financial topics. Sometimes, that content may include information about products, features, or services that SoFi does not provide. We aim to break down complicated concepts, loop you in on the latest trends, and keep you up-to-date on the stuff you can use to help get your money right. Read less

Refinancing Your Student Loans for Trade School

Many students take out federal and private student loans to pay for education, including trade school. Keeping up with monthly payments helps chip away at the loan principal, but refinancing student loans could potentially save a decent amount of money over the course of the loan.

Here’s what you need to know about trade school student loans, including how to refinance student loans for trade school.

What Is Trade School?

Trade school, also known as vocational or technical school, is a post-secondary educational institution with curriculum and programs that prepare students for specific jobs in skilled trades. In addition to classroom-style learning, trade school typically provides students with hands-on training and educational opportunities to develop specialized skills in their chosen field.

High school graduates might consider trade school if they’re looking for high-paying jobs that don’t require a degree, such as an electrician or plumber. Other common trade school programs include cosmetology, dental hygiene, culinary arts, and carpentry.

Many programs are designed to prepare students for specific professional licensing exams or certification requirements. For this reason, programs can vary from several months to a couple of years depending on the requirements for that profession or field.

Trade School Student Loan Options

After exploring grants and scholarship opportunities, prospective students may need student loans for trade school. Fortunately, earning an associate’s degree or certificate from a trade school takes less time than an undergraduate degree—and typically costs less.

The average cost of tuition in the U.S. currently is $9,377 per year for in-state tuition and $27,279 per year for out-of-state tuition. Meanwhile, the average cost for trade school tuition spans $3,674 to $15,923 per year.

Trade school costs can also include textbooks, room and board, and supplies. Some programs, such as culinary school, may require students to buy specialized equipment and tools for hands-on learning.

Here are some options for trade school student loans to cover any remaining education costs.

Federal Student Loans

Trade school students may be eligible for federal student loans. The main types of federal student loans that could be used for trade school include:

•  Direct Subsidized Loans: This type of loan is awarded based on financial need. Borrowers do not have to pay interest while in school or for six months after graduation.

•  Direct Unsubsidized Loans: Regardless of need, students at accredited trade schools can take out unsubsidized loans. Borrowers are responsible for paying interest, or letting it accrue, while in school and during any grace period.

•  Direct PLUS Loans: Eligible parents of dependent students or graduate and professional students could get this type of loan if the trade school is participating in the Direct Loan Program. Direct PLUS loans have higher interest rates than direct subsidized and unsubsidized loans.

If your trade school is eligible for federal financial aid, you’ll need to complete the FAFSA to apply for federal student loans.

Recommended: FAFSA 101: How to Complete the FAFSA

Private Student Loans

Private student loans are offered by credit unions, banks, online lenders, and other types of financial institutions, rather than the government.

If financial aid and other sources aren’t sufficient to pay for trade school in full, a private student loan could help fill in the gaps. However, private student loans may not offer the same benefits as federal loans, such as deferment and income-driven repayment plans.

Lenders generally review an applicant’s credit score and financial history, so it may be helpful to have a cosigner for private trade school loans.

Average Trade School Debt in the US

While trade school can put students on the fast track to a well-paying career, many students graduate with some amount of debt. Understanding how much debt you can expect after trade school can help make sure your loan payments will be affordable once you graduate.

As stated above, the average cost of trade school tuition ranges from $3,674 to $15,923 per year. To calculate what your potential student loan debt might be when you graduate, figure out what the tuition is per year at the school of your choice, and multiply by how many years it will take to complete the degree.

Create a budget that tallies up your current fixed and variable living expenses. See if you have any wiggle room to pay for some of the tuition yourself or if you’ll need to cover the complete cost of tuition (and possibly some living expenses) with student loans. This should give you an idea of what your trade school debt will be once you graduate.

Tips for Staying on Top of Your Trade School Loan Payments

Creating a plan to pay off your student loans is important for your long-term financial well-being. Missing student loan payments will impact your credit score and ability to qualify for other financing, such as mortgages.

Here are 5 tips for managing your trade school loans.

1. Review Your Loan Terms

Determining whether you have private student loans vs. federal student loans—or a combination of the two—is an essential first step to repaying trade school loans.

Federal student loans provide certain benefits, including deferment and forbearance, income-driven repayment options, and loan forgiveness programs. With subsidized federal loans, for instance, the government pays the borrower’s interest while loans are in deferment.

Prioritizing payments toward unsubsidized federal loans and private student loans that accrue interest while you’re in school could help stay on top of debt. Additionally, focusing on the loans with the highest interest rate could cut the total interest you pay over time.

2. Enroll in Autopay

Setting up automatic payments, or Autopay, can help ensure you don’t pay late. It allows you to “set it and forget it” when it comes to making your monthly trade school loan payment.

Most federal and private student loans offer a 0.25% discount rate by signing up for automatic payments, which creates additional savings on the total cost of the loan.

3. Pay Interest While in School

If you have unsubsidized loans, the interest will accrue while you’re in school and during grace periods or forbearance. Making monthly interest payments while you’re still in school can prevent interest capitalization, which is when unpaid interest is added to the principal amount of a student loan.

With interest capitalization, your loan principal balance increases, meaning that interest is now charged on a larger balance. Staying on top of interest payments won’t reduce the principal, but it can keep the balance from growing in the meantime.

4. Make Extra Principal Payments

Putting more money toward the loan principal each month can reduce the total cost of your trade school loan over time.

Be sure to ask your loan service to allocate the additional payment to your higher interest loans first to save more on interest. Otherwise, servicers may apply extra funds to the next month’s payment, potentially moving up the student loan due date rather than paying off the loan principal.

5. Make Bi-Weekly Payments

By paying half of your student loan payment every two weeks instead of once a month, you’ll make an extra monthly payment each year. This can help pay off your student loans early and save on interest.

Making bi-weekly payments also lines up with many workers’ pay periods, making for easier budgeting.

Refinancing Loans for Trade School

If you have federal or private student loans, you are eligible to refinance them if you choose to do so. By refinancing trade school loans, borrowers could potentially save money on interest over the life of the loan.

Refinancing student loans will replace your existing loans with one private loan. For federal loans, this means you’ll lose federal loan benefits by refinancing. If you are currently using federal benefits, such as income-based repayment, or you plan to in the future, it is not recommended to refinance with a private lender.

Taking stock of your credit profile is an important first step when considering refinancing student loans. Lenders will consider your credit history and income to determine eligibility and refinancing terms.

It’s recommended to check with multiple lenders and compare rates, fees, and repayment terms. Once you’ve settled on a lender, you’ll complete a loan application—often online—before you can be approved for refinancing.

Refinance Your Trade School Loans With SoFi

Refinancing trade school loans could help you get out of debt sooner and save money over the life of the loan, assuming you’re able to refinance at a lower interest rate. If you have federal loans, note that refinancing means giving up perks like loan forgiveness and income-driven repayment.

See if you prequalify for a student loan refinance in just two minutes.


Does FAFSA cover trade school?

Yes, FAFSA can cover trade school if it’s an accredited institution. You need to complete the FAFSA to determine your eligibility for federal financial aid for trade school.

How do you get trade school paid for?

Students can apply for federal financial aid to help pay for trade school if attending an accredited institution. Trade associations and companies are another potential source for scholarships and grants. Usually, this assistance is geared toward students studying a specific trade or field.

Can you use student loans for trade school?

Yes, you can apply for private or federal student loans to pay for trade school. Note that some trade schools are eligible for federal student loans, while others are not.

Photo credit: iStock/RichVintage
SoFi Student Loan Refinance
If you are a federal student loan borrower, you should consider all of your repayment opportunities including the opportunity to refinance your student loan debt at a lower APR or to extend your term to achieve a lower monthly payment. Please note that once you refinance federal student loans you will no longer be eligible for current or future flexible payment options available to federal loan borrowers, including but not limited to income-based repayment plans or extended repayment plans.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see Equal Housing Lender.

Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.


TLS 1.2 Encrypted
Equal Housing Lender