With nearly 45 million borrowers collectively owing $1.5 trillion in student loans, it begs the question: is it worth going into debt for a traditional college degree? Over 69% of students graduated with student loans in 2018, with the average student carrying $29,800. There is no questioning the value of education, but starting your career that deep in the hole can have consequences far into your financial future.
Trade schools, apprenticeships and certificate programs, however, are alternative educational opportunities with a clear path towards a higher salary, higher job placement rates and less debt. And their popularity is growing. According to the Department of Labor Employment and Training Administration, there has been a 56% increase in active apprenticeships since 2013. Certificate programs have also become a fast way to level up credentials and salary without the price tag of a bachelor’s degree or MBA program, especially in the information technology (IT) field where a certificate can earn a 22% salary bump.
While all of these paths to a higher education differ in terms of coursework, they often provide a faster and cheaper option than a traditional four-year degree. In this article we’ll be exploring the costs and benefits of:
In 1984, the Perkins Act paved the way for trade schools (now known as career and technical schools, or CTEs) to receive federal funding in an effort to broaden high school and post-secondary education opportunities. It has been renewed by Congress multiple times over the years, most recently in 2018 by President Trump. The current legislature provides $1.2 billion in annual funding for CTE programs.
While CTE coursework involves classes, much of the curriculum consists of hands-on learning with the goal of adequately preparing students for a specific profession. One of the main benefits of CTEs is the job placement programs that often come with them.
CTE programs fall into 16 career clusters or paths, ranging from manufacturing, to information technology, to agriculture. A 2018 survey by HigherEdGrowth reported that the two most popular trade school enrollments are in heating, ventilation, and air conditioning (HVAC) programs, and electrical programs. According to the Bureau of Labor Statistics (BLS), there are expected to be over 15 million new job openings to CTE graduates through 2022.
Salary levels and job growth
Salary levels for CTE graduates vary widely depending on the industry, however, the BLS reports that the fastest growing sectors for CTE graduates are health science, business management and administration, and architecture and construction.
Health sciences: Over 3 million new jobs are expected to open up in the health science sector through 2022. The median annual wage for healthcare workers is $28,710. Popular health science professions include nursing assistants, nurse practitioners, home health aids and physical therapist assistants. Nursing assistants are expected to see the largest increase in job openings, with an expected 594,000 new job openings between 2012 and 2022. Alternatively, physical therapy assistants earn upwards of $48,090 a year.
Business management and administration: Under the business administration track, customer service representatives account for the fastest growing jobs in this field, with an expected 942,000 new job openings by 2022. The median annual salary for customer service representatives is $33,750. Other popular jobs in this field include office clerks ($32,730 a year) and secretaries and assistants ($38,880 a year).
Architecture and construction: Construction laborers are in demand, with close to 500,000 new jobs expected to open up by 2022. The median annual salary for a construction laborer in 2018 was $34,810. On the other hand, electricians earn an average annual salary of $55,190.
HigherEdGrowth reported that for the 2017-2018 school year, the most popular CTE program was heating, ventilation, and air conditioning (HVAC), which accounted for 48% of enrollments. HVAC professionals earn on average $47,610 a year. There are currently over 300,000 HVAC jobs, and that is expected to increase 15% by 2026.
Ways to pay for trade school
CTE programs can be costly. Value Colleges reports that a typical program costs $33,000 in total. With the average cost of four-year, in-state public colleges coming in at $37,640, the savings are minimal. The difference: most CTE programs only take one to two years to complete, which means students can begin earning a salary that much sooner.
For-profit trade schools have come under some scrutiny in the past by misrepresenting what they can offer students. To get the best return on investment, prospective students should do their due diligence when researching options and make sure their program is licensed by a state agency or is accredited.
Only accredited CTE institutions are eligible for federal student loans. If considering a CTE program at an accredited institution, the first thing to do is file a FAFSA and research grants and scholarships. If considering taking out student loans for a trade school, be sure to look at flexible repayment plans and research your options.
Apprenticeships offer students a hands-on way to learn a specific trade or skill, all while earning a salary. Since 2013, they have grown in popularity by 56% and have garnered enough support to spark political action. In June 2017, President Trump signed an executive order that called for the expansion of apprenticeship programs and funding throughout the U.S. Two years later, the Department of Labor was awarded over $183 million in funding for the creation of new apprenticeships as well as an additional $100 million to create programs aimed at closing the skills gap.
Under the federal Registered Apprenticeship Program, students can get hands-on learning from mentors across a variety of industries, including: telecom, advanced manufacturing and energy. Programs last between one and six years (depending on the industry) and consist of in-class learning and on-the-job training. In 2018, over 238,000 new apprentices began programs.
Salary levels and job growth
Over 500,000 new apprenticeship programs have been created since January 2017. The average salary of a graduate from a certified apprenticeship program is over $60,000, with a starting wage of $15 an hour. There are a number of industries that offer apprenticeships and are expecting to see job growth in the coming years, including:
Information technology: The IT industry is expected to become a $5 trillion industry by the end of 2019. Computer programmers earn on average $84,000 a year and are expected to see 118,000 new jobs by 2022. Software developers are also seeing major growth, with more than 219,000 new jobs expected to open up and an average salary of $100,000 a year.
Energy: In the energy sector, apprenticeships are available for electricians, line maintenance, instrumentation technician, and more. In 2018, there were more than 43,000 active electrician apprentices. The Department of Labor and Statistics projects over 225,000 new jobs for electricians by 2022, with average salaries of $55,000 a year.
Advanced manufacturing: There are a number of apprenticeships in the advanced manufacturing industry. Industrial maintenance repair jobs are expected to grow by 380,000 over the coming years. Average salaries for these positions can reach upwards of $51,000. Alternatively, line installers earn on average $65,880 a year.
Ways to apply and pay for an apprenticeship program
One of the most valuable aspects of apprenticeships is that they completely remove the need for student loans. Apprentices are often expected to purchase equipment and tools, although most of these expenses can be taken out of their paycheck. Grants and scholarships at the federal and state level may also be available to help cover costs. As of June 2019, $1.5 million in grants has been funded to mentor, train and recruit more women in apprenticeship programs. Those considering an apprenticeship as an alternative to college can research and apply for new apprenticeships via Apprenticeship.gov.
Certificate programs can be a cost effective alternative to college. Georgetown University’s Center on Education and the Workforce reports that certificate holders earn on average 20% more than high school graduates without any post-secondary education. Certificates offer students a chance to become an expert in certain skills across a variety of industries. From cosmetology, to IT, to yoga, certificate programs differ greatly in terms of duration, cost and coursework. Some intensive program certifications can be completed in as little as 12 weeks, while others can take as long as three years. Some certifications can be completed online, while others require one-on-one training or work in a classroom.
One of the benefits of certifications is that they can be earned at almost any level of education. The same Georgetown study found that 37% of certificate holders have a high school diploma but no college attendance, compared to 12% who hold a bachelor’s degree.
Salary levels and job growth
Certifications have the ability to provide an immediate pay increase — The Global Knowledge 2018 IT Skills and Salary Report found the average salary difference between certified and non-certified employees within North America is 22%, or $15,913.
Information technology: IT professionals can see substantial pay increases for certification in specific software, programs or tools. In an industry that’s expected to hit $5 trillion by the end of 2019, these 15 IT certifications equate to a higher salary and more job security.
Healthcare: Certificate holders in the healthcare field see a 35% premium in earnings compared to those without a certificate. Popular certifications in this field include registered nurses (RNs) and home health aides. RN’s earn on average $71,730 a year, and with aging baby boomers relying more and more on the healthcare system, the Department of Labor predicts over 1 million new RN jobs will open up by 2022.
Aviation: Certificates are widely accepted in the aviation field. In fact, 20% of aircraft mechanics and technicians report having a certificate, and the average salary is more than $85,000 a year. Other positions in this field include: air traffic controllers, pilots and aerospace engineers.
Ways to pay for certificate programs
Certificate costs can range from $2,500 to $16,000, depending on the program, but there are a number of options available when it comes to paying the fees. If you’re pursuing a certificate in an industry you already work in, check to see if your employer offers financial assistance. Even if they don’t have a formal program, they may be open to covering the cost if you can clearly show how the program could have a positive impact on your performance.
While there are fewer federal grants and scholarships available for certificates than for four-year programs, filling out a FAFSA can help locate funds to help foot the bill. Check out the National Center for Education Statistics College Navigator to help search for scholarships and grants relating to your specific program.
Student loans can also cover certificate training. Be sure to weigh the pros and cons when researching student loan options, however. Check out our Ultimate Guide to Student loans in 2019 for an in-depth look at what options are out there and what to consider when picking a student loan.
Depending on the amount you need to borrow, you can also consider a personal loan, which may give you more control over how you spend the funds than a student loan. The downside to a personal loan is that you cannot defer payments, meaning you may have to begin paying back your loan within weeks. To find and compare the best personal loan options out there, visit our personal loans comparison tool.
Earning a secondary education through apprenticeship, certification, or CTE program can be an alternative to the traditional college route. While these options may not equate to more lifetime earning potential when compared against bachelor degree holders, they can provide students a more cost-effective, and generally faster path towards making a living in a professional career.