Student Loan Options for Technical Colleges

Although financial aid is more commonly associated with 4 year universities, there are options for a student loan for technical colleges. Available student loan options depend on the particular school’s history, accreditation and professional credentials. Lenders may be leery of working with a new or unaccredited school.

Federal Student Loans

Federal student aid programs, including FFEL and Direct Loans through the Stafford Loan program, are available at technical colleges and vocational schools that are approved for federal Title IV student aid (Pell Grants, student loan and federal workstudy). This approval is a multi-year process for the school, and requires the technical college to be accredited by one of the agencies recognized by the U.S. Department of Education, so newer technical colleges may not be able to offer federal student aid.

The main difference between FFEL and Direct Loans is the source of the funds. FFEL loans are made through private lenders, with the backing of the federal government in case of default; Direct Loans are made straight from the federal government without going through a bank. Loan terms are identical, and repayment terms are similar for both types. Schools usually participate in one or the other.

The borrowing limit for student loans at technical colleges may be lower than the limit announced by the U.S. Department of Education, because many technical college programs are shorter than one year of a college degree program. If a vocational school program has the classroom time equivalent of less than one year of full-time enrollment at a college or university the student loan borrowing limit is prorated. Pell Grant eligibility is also reduced for shorter programs.

To apply for federal student loans to attend technical college, prospective students need to fill out the Free Application for Federal Student Aid (FAFSA), which is available at public libraries or eligible schools’ financial aid departments. Students can also complete the FAFSA online. Technical colleges use this information to determine a student’s eligibility for federal student loans, as well as Pell Grants or other Title IV aid that the school may offer.

Private Lenders

Outside of the federal financial aid programs, private lenders may offer student loans for technical college programs. Some banks are more open than others to providing student loans for higher education options other than traditional colleges and universities, but some may be willing to work with technical college students. Administrators at technical colleges, including the bursar and the financial aid administrator, if the college has one, often know which local banks are open to dealing with technical college student loans.

Banks decide individually whether a particular technical college meets their requirements for educational loans. There is no uniform requirement that a technical college be accredited, but accreditation may give a bank more confidence about the legitimacy of the school and the effectiveness of the education.

School Financing Options

Technical colleges themselves may provide financing options for program tuition. These are, in effect, student loans offered by the school itself in the amount of program tuition, often with 0% interest.

Don’t be shy about talking to technical college representatives about financing your education. Technical colleges provide career-focused education and training, and paying for career education is a valid concern.


Need a Student Loan? Click here!