Paying for Trade School: Financial Aid, Grants and Loans

Paying for trade school can feel overwhelming, but you don’t have to figure it out alone. From federal grants to scholarships to loans, there are several types of financial aid available for those who qualify, and most students use a mix to help cover their costs.¹⁰

In this guide, we’ll walk you step-by-step through what you need to know.

What Is Financial Aid?

Financial aid is any gifted or borrowed money that helps pay for your education.

• Gifted money means you don’t have to pay it back.
• Borrowed money means you’ll repay it, usually with interest.

Trade school financial aid can help those eligible cover tuition, housing and school-related costs like books. There are three main types:

• Grants: Aid from the federal or state government or your school that you don’t have to pay back.
• Scholarships: Aid from schools or private groups that you don’t have to pay back.
• Loans: Money you borrow from federal or private lenders that you do pay back.

It’s best to start with grants and scholarships first because they’re free money that recipients don’t have to pay back. Once you’ve explored those, then you can look at loans to cover any remaining costs.

Now, let’s take a closer look at the three types.

Pell Grants for Trade School

A Pell Grant is financial aid from the federal government that recipients don’t have to pay back. It’s based on your financial needs, not grades.

The maximum Pell Grant award changes every year. For 2025–26, eligible students could receive up to $7,395. The amount you could actually receive depends on:

• Your Student Aid Index (SAI) — a score you get after completing the Free Application for Federal Student Aid (FAFSA). This score determines your financial need.
• Trade school cost of attendance (tuition, tools, supplies and expected living expenses).
• How long you'll attend during the academic year.  

How to qualify

To qualify for a Pell Grant, you must:

• Complete the FAFSA each year and show financial need based on your SAI.
• Attend an eligible school, such as UTI.
• Not already hold a bachelor’s degree.

How recipients get the money

Pell Grant funds usually go directly to the recipients’ school to apply to tuition and fees. If money is left over, they may get the remainder for books, tools or living costs.

How to keep a Pell Grant

To keep receiving a Pell Grant, you must:

• Stay enrolled in a trade school program.
• Complete a new FAFSA each year you attend.

If you withdraw early, your grant may need to be returned. Always talk to the financial aid office before making that decision.

Scholarships

Like grants, scholarships are free money recipients don’t have to pay back. They’re offered by schools, employers, nonprofit groups and professional associations. Some are based on merit or career goals, while others consider an applicant’s background, location or financial need.

Finding scholarships takes time, but it’s worth it. Here are a few ways to start your search:

1. Use online scholarship databases: Tools like UTI’s scholarship page, TechForce and CareerOneStop make it easy to find scholarships you may be eligible for that fit you.

2. Contact local employers: Many companies in the trades offer scholarships to help attract skilled workers.

3. Explore industry associations: Professional associations like SkillsUSA and mikeroweWORKS Foundation offer scholarships to students training for careers in skilled trades.

Read next: How To Find & Apply for Trade School Scholarships

Federal Student Loans for Trade School

If grants and scholarships you qualify for don’t cover all of the costs, students can borrow money from the U.S. Department of Education. This is called a federal student loan.

Types of federal loans

There are two different types of federal loans:

• Direct subsidized loan: Need-based loan that the government pays interest on while the student is in school and during deferment periods.
• Direct unsubsidized loan: Loan with interest that starts accruing right away and does not stop during deferment.

Because unsubsidized loans start accruing interest right away, you may pay more over time. Some students qualify for subsidized loans up to a specific amount and then use unsubsidized loans to cover remaining costs.

Understanding interest rates, repayment and deferment

Federal loans have fixed interest rates that stay the same for the life of the loan. They also include income-driven repayment plans, which adjust your monthly payment based on what you earn. For example, if you make less, your payment is lower.

You don’t start making payments until after you leave school, and most students receive a six-month grace period before repayment begins.

If you’re struggling to make payments later, you can request deferment or forbearance, which temporarily pauses or reduces payments.

Are federal loans better than private loans?

Federal loans are usually better than private loans because they:

• Are easier to qualify for (no credit check required for most students).
• Have lower, fixed interest rates set by the federal government.
• Offer flexible repayment plans and options for deferment.

Private loans may fill gaps when federal aid isn’t enough, but they often have variable interest rates, require credit approval and provide fewer borrower protections.

Parent PLUS Loans

Parents of dependent students can apply for Parent PLUS Loans from the U.S. Department of Education’s Direct Loan Program. This is common for the parents of high school grads or young adults entering trade school.

Here’s what to know:

• The parent is legally responsible for repayment. The loan cannot be transferred to the student.
• Parents can borrow up to the total cost of attendance minus any other financial aid received.

How to qualify

To qualify for a Parent PLUS loan, you must:

• Be the biological, adoptive or stepparent of a dependent student.
• Ensure your child has completed the FAFSA.
• Have a good credit history or apply with an endorser (someone who agrees to pay the loan if you cannot).

How recipients get the money

The trade school your child attends will apply the loan directly to their tuition and fees. If any money is left over, the school will send it to you, or, with your permission, give it directly to your child to help with books, tools or living expenses.

Private Loans

If grants, scholarships and federal loans you qualify for don’t cover all your trade school costs, private student loans may be another option. These loans come from banks, credit unions or any financial institutions other than the U.S. Department of Education.

Unlike federal loans, private loans have different rules depending on the lender.

How private loans work

Private loans are based on credit history and income. Younger students usually need a co-signer, often a parent or relative, who can use their credit history to help them qualify.

The amount you can borrow and the interest rate you receive depend on your credit profile.

Some lenders offer loans specifically for career training or trade schools, while others focus on traditional colleges. Always check that your program and school are eligible before applying.

Understanding private loan interest rates and repayment

Private loans can have fixed or variable interest rates.

• Fixed rates stay the same for the life of the loan.
• Variable rates may start lower but can change over time.

Repayment usually begins immediately. Meaning, you’ll have to make payments while in school. There are some lenders who may allow you to delay payments, but much like federal unsubsidized loans, interest continues to accrue during any delay.

Federal vs. private loans

Federal loans are generally safer and more flexible, while private loans can help fill funding gaps once federal aid is maxed out. Here’s a breakdown:

• Federal loans: A loan with a fixed interest rate that is borrowed from the U.S. Department of Education. It does not typically require a credit check and comes with income-driven repayment plans as well as deferment options.
• Private loans: A loan with a fixed or variable interest rate that is borrowed from banks, credit unions or other private lenders. These require a credit check, and repayment options vary by lender.

Tips before you borrow

• Borrow only what you need. It’s easy to overestimate living expenses.
• Compare lenders. Use online tools to review rates, terms and repayment options.
• Understand all terms before signing. Look at fees, deferment policies and co-signer requirements.

Tip: If you need extra help, talk to your school’s financial aid office. They may be able to help you explore lenders that work with your program and confirm eligibility.

How To Apply for Trade School Financial Aid

Applying for financial aid can feel complicated, but if you take it step-by-step, it’s manageable.

The very first thing to do is complete the FAFSA — a form that helps the U.S. Department of Education determine your financial need and, therefore, eligibility for grants and loans. It's also needed to apply for some scholarships.

Here’s how to get started:

• Gather your documents: You’ll need your Social Security number, driver’s license (if you have one) or ID, tax returns and bank statements.
• Create your FSA ID: Go to studentaid.gov/fsa-id and set up an account. This will allow you to use the U.S. Department of Education’s free financial tools.
• Complete the FAFSA: You’ll enter financial details for yourself (and a parent if you’re a dependent).
• List your schools: Add every trade school or college you’re considering. Each school has a federal code. For example, UTI’s codes vary by campus. Find them here: https://www.uti.edu/financial-aid/getting-started/fafsa-school-codes
• Review your Student Aid Report (SAR): Once you submit the FAFSA, you’ll get a summary of your information. Review it for accuracy.
• Follow up with your school’s financial aid office: They’ll review your FAFSA results and share your financial aid offer should you qualify for one. This can help determine if you’ll need to apply for additional scholarships and/or loans.

If you need help, UTI's Financial Aid team can walk you through the entire process and help you understand any financial aid package you may be eligible for.

Tips To Maximize Financial Aid and Minimize Debt

Financial aid should help, not hold you back. Here are a few things you can do to keep your out-of-pocket expenses and future debt as low as possible:

• Apply early. Deadlines for federal, state and school-based aid can vary. Submitting early may increase your chances of receiving funds, since some aid is awarded on a first-come, first-served basis.
• Apply for multiple scholarships. Don’t stop applying after one or two. Even smaller awards can add up quickly and reduce the amount you need to borrow!
• Borrow only what you need. Consider ways to lower your expenses, like living with family or roommates, to avoid taking the full loan amount offered.
• Create a simple budget. Track your income (from work or aid) and expenses (like tuition, tools and housing) to make sure you’re living within your means.
• Work part-time. UTI can help you find a part-time job that accommodates your class schedule.¹
• Reapply for aid every year. Many forms of aid must be renewed annually. Be sure to complete the FAFSA each academic year until you graduate. UTI’s Financial Aid team can help you with this.

Alternative Funding Sources at UTI

UTI wants to make training for your future as simple as possible. That’s why we offer help paying for trade school beyond grants, scholarships and loans you may qualify for.¹⁰

Early Employment Program (EEP)

UTI’s Early Employment Program helps eligible students connect with participating employers before graduation.³⁶ These employers may offer:

• Part-time work in the industry you’re training for while you’re in school.
• Potential for full-time employment and reimbursement for education-related expenses after graduation.

This is a great way to gain real-world experience, earn income and build professional connections before even graduating!

Tuition Reimbursement Assistance Program

UTI’s Tuition Reimbursement Incentive Program (TRIP) connects eligible automotive and diesel trade school students with employers who may offer incentives to help cover their cost of training.¹⁴

Through TRIP, participating employers may provide:

• Help with repaying student loans once you’re employed with them full-time.¹
• Hiring incentives such as tool allowances or sign-on bonuses.

Participating in TRIP can help make your education more affordable while helping you meet your career goals faster.  

37% of UTI’s Auto/Diesel graduates reported receiving employer incentives, such as sign-on bonuses, relocation assistance, tool allowances or some tuition reimbursement, based on a 2025 survey!¹³⁴

Military education benefits

UTI is proud to support active-duty service members, veterans and military families through several education benefit programs.

If you’ve served or are currently serving, you may qualify for:

• GI Bill® benefits: May cover tuition, housing and books.²¹
• Veteran-specific awards: In addition to your benefits, you may qualify for additional grants and scholarships, like the UTI Salute to Service Grant.²⁰

UTI’s Military Support Center can help you understand your eligibility, apply for benefits and access the resources you’ve earned. Call or email the team today.

Frequently Asked Questions

Do I have to fill out a FAFSA to be eligible for financial aid?

Yes. Completing the FAFSA is the first step to qualify for most types of financial aid, including federal grants, loans and some scholarships. Even if you think you may not qualify, it’s worth completing. It is free and can open more opportunities than you might expect.

What grants and scholarships can trade school students get?

Trade school students may be eligible for federal Pell Grants, state grants and school-based scholarships. Organizations like TechForce Foundation and SkillsUSA also offer awards for students pursuing hands-on careers. It’s best to apply for as many as possible.

Are payment plans available?

Yes. Many trade schools, including UTI, offer payment plan options to help make tuition more manageable. These plans allow you to pay smaller amounts over time instead of one large upfront cost, further reducing the need for additional loans.

Is trade school worth it financially?

For many students, yes. Trade school programs are typically shorter than four-year degrees, which means graduates can enter the workforce and start paying back loans sooner.¹ UTI students train for in-demand jobs in industries that need skilled technicians, which can make trade school a strong return on investment for the right career path.

Your Next Steps

You’ve learned all there is to know about paying for trade school. Now it’s time to take the next step toward your future. Here’s how to move forward with confidence:

• Find your program. Explore UTI’s hands-on training options in automotive, diesel, welding, HVACR, electrical and more!¹⁸
• Request information. Connect with an Admissions Representative to get answers to your questions and personalized guidance on enrollment.
• Estimate your cost. Use UTI’s online tools to see your estimated program cost before any financial aid you may qualify for, so you can start planning.
• Complete the FAFSA. The Free Application for Federal Student Aid helps determine what grants and loans you may qualify for, so you can secure funding if eligible.
• Start your training. Once you’ve secured your funding, it’s time to start building your future with hands-on, career-focused training.

Your future could be closer than you think. Take the first step today.

Sources

https://studentaid.gov/understand-aid/types/grants/pell

https://studentaid.gov/understand-aid/types/loans

https://studentaid.gov/understand-aid/types/loans/plus/parent

https://studentaid.gov/understand-aid/types/loans/federal-vs-private