Not all educational opportunities end with a degree. Many adults hold non-degree certificates. But if you’re hoping to get financial aid to continue your education, you might not qualify for federal student aid.
That’s because the Department of Education’s (DOE) eligibility rules for non-degree-seeking students are murky. Fortunately, there are numerous ways to pay for schooling, even as you enter trade and vocational schools and non-degree programs.
Federal aid for a non-degree-seeking student
A non-degree-seeking student might be pursuing a certificate, professional training or licensing, or a career-based education that doesn’t end with a diploma. Their access to federal student aid might seem black and white on the surface, but there is plenty of gray area.
You don’t have access to federal loans if you’re enrolled in a non-degree program, but there are two common exceptions:
- You’re completing courses that are required for entering a degree program.
- You’re completing courses for teacher certification or recertification.
Moreover, you might be eligible for government loans if you’re attending a certificate program that prepares you for a specific career.
Certificate programs come in all shapes and sizes. You might have found yours via a traditional university, a small trade or career school, or through a local community college.
You can find out if your certificate program is eligible for federal aid by ensuring that it’s accredited. Take these three steps when seeking out a program:
- Find a program: Search for certificate-awarding programs using the NCES’ College Navigator.
- Confirm a program’s accreditation: Search the DOE’s database of accredited schools.
- Complete the FAFSA: Find the school codes of federally approved programs on the DOE’s iLibrary.
Before or after taking on this research, check in with your school’s financial aid representatives. They can tell you about your access to federal loans. At East Carolina University, for example, non-degree-seeking students can find a list of certificate programs that are eligible for federal aid.
If you’re eligible for them, prioritize federal loans over private loans. Federal loans have lower interest rates, plus more repayment options and protections. For Direct Subsidized and Unsubsidized Loans disbursed after July 1, 2017, for example, the interest rate is 4.45%. Private loans, meanwhile, top out at closer to 12.00%.
A $5,000 federal loan would set you back $6,204 over a 10-year term. Borrowing the same amount from a private lender at the 12.00% interest rate would cost you $8,608.
Alternative non-degree-seeking student loans
Keeping in touch with your school might also lead you to alternative options. This is especially important for non-degree-seeking students who have maxed out or were ineligible for federal loans in the first place.
Not all private lenders offer non-degree-seeking student loans. When shopping around, ask lenders what types of programs you can attend and still be eligible to apply for loans.
Sallie Mae’s Career Training Smart Option Student Loan, for example, caters to students who are pursuing professional training or licensing or a trade certificate. It offers loans with a minimum balance of $1,000.
Wells Fargo’s private loan for career and community colleges awards a maximum of $15,000 per year for two-year schools and $20,000 per year for four-year schools.
In addition to attending a participating U.S.-based school, you would need to meet traditional student loan criteria, such as being a U.S. citizen (or permanent resident) or having a co-signer who is.
Once you have identified lenders that offer non-degree-seeking student loans, you’ll want to employ the same strategies as degree-seeking students. This includes applying with lenders within a 30-day window to limit your credit hit when comparing rates and repayment options.
Avoid loans for non-degree students, if possible
Just because you’re a non-degree-seeking student looking to further your education doesn’t mean you have to take out loans.
Before resorting to borrowing money — via non-degree-seeking student loans, personal loans, or your credit card — compare programs based on cost. To become a chef without spending a fortune on culinary school, for example, you might research community colleges and trade schools before committing to a big-name culinary institution.
There are even significant differences among lower-end options. The average cost to complete a junior college program is $2,700 but balloons to $33,000 for trade schools, according to Value Colleges.
If you’re not set on a specific profession, you might also compare potential career paths. Among booming trade careers that don’t require student loans, for example, electricians are paid during their apprenticeships. For another, industrial machinery mechanics receive on-the-job training.
And don’t forget about gift aid that doesn’t need to be repaid. You should prioritize professional development scholarships, for example, over any loan.
You might be in the position of pursuing a different career via a more costly certificate program. If you’re still leaning toward taking out a loan, you might also like to know that refinancing loans for career schools could prove to be difficult. Most lenders require applicants to have an associate’s or bachelor’s degree under their belt.
Choose the right way to pay for the right school
Maybe you’ve already chosen your school, and now you’re trying to figure out how to pay for it. Or perhaps you know that you need more education but aren’t sure about your career path.
Whatever your situation, understand that the following three variables could decide whether non-degree student loans are in your future:
- Your program or school cost
- Your eligibility for federal aid
- Your need for private student loans
Choosing a lower-cost program that would require a private loan, for example, might turn out to be more expensive than attending a higher-cost program that is approved for federal loans.
As you weigh your options, make sure you pick the right way to pay for schooling. It could save you thousands of dollars down the road. Equally important is picking a school with the best ROI.
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