Career education is for those looking to change careers or advance in their current field. Luckily, there are plenty ways to finance certificate or training programs. Here's where to look.
It seems that student loans are available just about everywhere if you're planning to attend college. But what about personal loans for career education.
That's the type of schooling that generally doesn't involve earning a recognized degree. It can be a training program, certificate program, or a technical or vocational school. Are there financing options for that type of education?
There are actually several, including two available from the federal government, and several from private sources.
Federal loan programs
Surprise! You can get assistance in taking personal loans for career education through the federal government. You can do this using Federal Direct Subsidized Loans or Federal Direct Unsubsidized Loans. These loans are sometimes referred to as Stafford Loans or Direct Stafford Loans.
They usually have the most affordable terms available, including low interest rates. And like federal loan programs for college, they come with a six-month deferment.
Before applying for any federal loans, you must first complete the Free Application for Federal Student Aid (FAFSA). In order to be eligible for either loan program, you must attend a participating school.
Federal Direct Subsidized Loan
This program applies to undergraduate students who have a demonstrated financial need. You must be enrolled at least "half-time" in a program that lead to either a degree or a certificate.
Interest on the loan will be paid by the US Department of Education (USDOE) while you are still in school and during the deferral period.
Federal Direct Unsubsidized Loans
This program is available to all students (financial need not required). You must also be enrolled at least half-time in a program leading to a degree or certificate.
Unlike the unsubsidized loan however, you will be responsible for accrued interest even while you are still attending school.
Even Financial
There's a great new loan aggregator run by Even Financial (our partner) that helps you find personalized loans based on your individual qualifications and needs. It has an option for students to help the user find the best loan available for educational purposes.
Sallie Mae
Sallie Mae's Career Training Smart Option Student Loan provides financing for professional training and trade certificate courses at non-degree granting schools. Like the other loans on this list, there is also a six month grace period following completion of your educational program.
The minimim loan is $1,000, or up to 100 percent of your school certifed costs. They offer variable interest rate loans, with APRs ranging between 5.50 percent and 12.62 percent. You will be responsible for paying interest while you're in school and during the six month grace period. After that, you will begin making principle and interest payments.
They even throw in free quarterly FICO credit score.
Citizens Bank
Citizens Bank offers loans for continuing education for "nontraditional students". It's called the Citizens Bank Student Loan. In order to be eligible, you must be enrolled at least half-time in a program that grants a degree or certificate.
You can borrow up to $90,000 for a degree program, but the exact amount will depend upon the type of education and the actual costs. Loan terms can range from five years to 15 years, and you can choose to have interest payments due immediately or deferred.
You must have a minimum credit score 620, however you can add a cosigner. Loans can be either fixed-rate or variable, and range between 4.29 percent and 11.99 percent APR.
Wells Fargo
Wells Fargo provides loans through their Student Loan for Career and Community Colleges program. They're available for students attending a two-year school, a career training program or a non-traditional school.
You can borrow up to $15,000 per year for a two year public, private, or proprietary school, with a lifetime maximum of $40,000 including federal loans. You can borrow up to $20,000 per year for a four-year proprietary, with a lifetime maximum of $100,000.
There are no upfront loan fees. They also offer a six month grace period after you complete your education. Rates range depending if you want a variable or fixed rate.
Peer-to-peer (P2P) lenders
The rise of P2P lending platforms creates yet another financing option for career education. Platforms like Lending Club and Prosper provide personal loans with flexible terms.
P2P lenders generally don't have specific loan programs for educational purposes. But since they allow you to take personal loans for just about any purpose, you can use the funds for career education or training.
They will generally allow you to take an unsecured loan of up to $40,000. Loan terms are three years or five years. All are fixed rate, unsecured and require no prepayment penalty.
One major negative is the P2P platforms typically charge an origination fee. That fee is equal to between one and six percent of the amount borrowed. In addition, you must qualify for a P2P loan based on your income and credit worthiness.
It's not a perfect option, but if other sources are not available, these loans may be able to get you financing for the additional education you're looking for.
What about Sofi? This is another P2P lending platform, and the one best associated with educational loans. But Sofi only offers student loan refinances. Refinances must be on student loans taken to get at least an Associate's degree.
So if you're looking to advance your education, and you need financing, try one of these options and see which works best for you.
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