Non-Degree-Seeking Student Loans: When You’re Not Pursuing a Degree
The federal government has strict eligibility rules for non-degree-seeking student loans, making it challenging to borrow funds for non-traditional programs. And while private student loans are an option, it’s best to avoid them if possible.
Fortunately, you still have a variety of ways to pay for trade, vocational or other non-degree programs. Here’s what you need to know about paying for courses or training programs that don’t lead to a degree.
Federal aid for non-degree-seeking students
A non-degree-seeking student might pursue a certificate, professional training or licensing or a career-driven education that doesn’t end with a diploma. The federal government typically won’t provide financial aid for non-degree-seeking students unless it leads to an approved professional certificate or credential.
For example, you may be able to borrow federal student loans if…
- You’re completing courses required to enter a degree or certificate program.
- You’re completing courses for teacher certification or recertification.
- You’re enrolled in a certificate program that prepares you for a specific career (like cosmetology).
Certificate programs come in all shapes and sizes. You might have found yours via a traditional university, a small career or trade school or a local community college.
You can find out if your certificate program is eligible for federal aid by ensuring it’s accredited — ideally, before enrolling. To do so, take these steps:
- Find an eligible program: Search for certificate-awarding programs using the NCES College Navigator.
- Confirm a program’s accreditation: Search the Department of Education’s database of accredited schools.
- Complete the FAFSA: Find the school codes of federally approved programs on the Department of Education’s iLibrary.
Besides filling out the FAFSA, check with your school’s financial aid office to see if they accept federal loans for non-degree-seeking students. If eligible, prioritize federal loans over private loans since they typically have lower interest rates, more repayment options and greater protections if you encounter financial hardship.
Federal Direct subsidized and unsubsidized loans, for example, have an interest rate of 6.53%; private loan interest rates, meanwhile, can reach 14.99% or higher.
A $5,000 federal loan would cost $6,364, including interest, over a 10-year term. Borrowing the same amount from a private lender at a 15% interest rate would cost you $9,680. Try using our student loan repayment calculator to see how much you could save using a federal versus private student loan.
Private loans for non-degree-seeking student loans
If you’ve exhausted federal financial aid options, consider private non-degree loans. When shopping around, ask lenders which educational programs are eligible for funding.
For instance, here are two private loans for non-degree-seeking students to consider:
- Sallie Mae : The Career Training Smart Option Student Loan caters to students pursuing professional training, licensing or trade certificates. It offers loans with a minimum balance of $1,000.
- Ascent Student Loans : Your non-degree options include a Career and Professional Training or boot camp loan. Amounts start at $2,000 and go up to the total cost of tuition.
After identifying lenders offering non-degree-seeking student loans, you’ll want to apply to your top choices within a short time — ideally 14 days, but potentially as many as 45 — to limit the impact of multiple hard credit checks.
Avoid non-degree student loans, 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 borrowing money, compare programs based on cost. For example, you might explore community colleges and public trade schools when training to become a chef, rather than only considering big-name culinary institutions. Also, some coding boot camps defer tuition until you land a job — allowing you to gain new skills and try out the profession without any upfront costs.
You might also compare potential career paths if you’re not set on a specific profession. Some booming trade careers don’t generally require student loans — for instance, many electricians are paid during their apprenticeships, and industrial machinery mechanics can often receive their education via on-the-job training.
Also, don’t forget about scholarship awards. Scholarships.com has an extensive list of grants and scholarships for non-degree-seeking students or those attending non-traditional schools.
You can also prioritize professional development awards — money given to those completing courses or a related program to further their career — over any loan. Try searching for professional organizations related to your career path. For example, if you’re a project manager, look into options at the Project Management Institute Educational Foundation.
Your employer might also offer tuition reimbursement if you continue to work while attending school, so long as your certificate program is related to your current career path.
Plus, be aware that refinancing student loans for career schools can prove to be difficult. Most lenders require applicants to have an associate or bachelor’s degree to refinance, which can provide a lower interest rate if you qualify. One exception is Citizens Bank, which does provide refinance options for those who didn’t earn a degree.
Choose the right way for you to pay for school
Non-traditional students should consider their eligibility for federal student loans and whether they’ll need to take on private student loans to cover all or part of the cost.
Note that choosing a lower-cost program that requires a private loan might sometimes be more expensive than attending a higher-cost program that accepts federal loans.
Picking the right way to pay for your schooling could save you a bundle. You can also put more income toward the goals you choose and the things you love rather than burying yourself deep into student loan debt.