The CBOE is CBOE Global Markets, the world’s largest options trading exchange. While you may already be familiar with the New York Stock Exchange and Nasdaq, those are only two of the exchanges investors use to trade securities.
In addition to the option trading exchange, CBOE has also created one of the most popular volatility indices in the world.
Learn more about CBOE and what it does.
What Is the CBOE Options Exchange?
CBOE, or CBOE Global Markets, Inc., is a global exchange operator founded in 1973 and headquartered in Chicago. Investors often turn to CBOE to buy and sell both derivatives and equities. In addition, the holding company facilitates trading over a diverse array of products in various asset classes, many of which it introduced to the market.
The organization also includes several subsidiaries, such as The Options Institute (an educational resource), Hanweck Associates LLC (a real-time analytics company), and The Options Clearing Corporation or OCC (a central clearinghouse for listed options).
The group has global branches in Canada, England, the Netherlands, Hong Kong, Singapore, Australia, Japan, and the Philippines.
CBOE is also a public company with a stock traded on the cboe exchange.
What Does CBOE Stand For?
Originally known as the Chicago Board Options Exchange, the company changed its name to CBOE in 2017.
💡 Quick Tip: All investments come with some degree of risk — and some are riskier than others. Before investing online, decide on your investment goals and how much risk you want to take.
History of the Chicago Board of Options Exchange
Founded in 1973, CBOE represented the first U.S. market for traders who want to buy and sell exchange-listed options. This was a significant step for the options market, helping it become what it is today.
In 1975, the CBOE introduced automated price reporting and trading along with The Options Clearing Corporation (OCC).
Other developments followed in the market as well. For example, CBOE added “put” options in 1977. And by 1983, the market began creating options on broad-based indices using the S&P 100 (OEX) and the S&P 500 (SPX).
In 1993, the CBOE created its own market volatility index called the CBOE Volatility Index (VIX). In 2015, it formed The Options Institute. With this, CBOE had an educational branch that could bring investors information about options.
CBOE continues its educational initiatives. The Options Institute even schedules monthly classes and events to help with outreach, and it offers online tools such as an options calculator and a trade maximizer.
From 1990 on, Cboe began creating unique trading products. Notable introductions include LEAPS (Long-Term Equity Anticipation Securities) launched in 1990; Flexible Exchange (FLEX) options in 1993; short-term options known as Weeklys in 2005; and an electronic S&P options contract called SPXpm in 2011.
Understanding What the CBOE Options Exchange Does
The CBOE Options Exchange serves as a trading platform, similar to the New York Stock Exchange or Nasdaq. It has a history of creating its own tradable products, including options contracts, futures, and more. Cboe also has acquired market models or created new markets in the past, such as the first pan-European multilateral trading facility (MTF) and the institutional foreign exchange (FX) market.
The CBOE’s specialization in options is essential, but it’s also complicated. Options contracts don’t work the same as stocks or exchange-traded funds (ETFs). They’re financial derivatives tied to an underlying asset, like a stock or future, but they have a set expiration date dictating when investors must settle or exercise the contract.That’s where the OCC comes in.
The OCC settles these financial trades by taking the place of a guarantor. Essentially, as a clearinghouse, the OCC acts as an intermediary for buyers and sellers. It functions based on foundational risk management and clears transactions. Under the Security and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC), it provides clearing and settlement services for various trading options. It also acts in a central counterparty capacity for securities lending transactions.
Cboe offers a variety of tradable products across multiple markets, including many that it created.
For example, CBOE offers a range of put and call options on thousands of publicly traded stocks, (ETFs), and exchange-traded notes (ETNs). Investors use these tradable products for specific strategies, like hedging.
Or, they use them to gain income by selling cash-secured puts or covered calls. These options strategies give investors flexibility in terms of how much added yield they want and gives them the ability to adjust their stock exposures.
Investors have the CBOE options marketplace and other alternative venues, including the electronic communication network (ECN), the FX market, and the MTF.
💡 Quick Tip: Options can be a cost-efficient way to place certain trades, because you typically purchase options contracts, not the underlying security. That said, options trading can be risky, and best done by those who are not entirely new to investing.
CBOE and Volatility
The CBOE’s Volatility Index (VIX) gauges market volatility of U.S. equities. It also tracks the metric on a global scale and for the S&P 500. That opens up an opportunity for many traders. Traders, both international and global, use the VIX Index to get a foothold in the large U.S. market or global equities, whether it’s trading or simply exposing themselves to it.
In late 2021, CBOE Global Markets extended global trading hours (GTH) on CBOE Options Exchange for its VIX options and S&P 500 Index options (SPX) to almost 24 hours per business day, five days a week. They did this with the intention to give further access to global participants to trade U.S. index options products exclusive to CBOE. These products are based on both the SPX and VIX indices.
This move allowed CBOE to meet growth in investor demand. These investors want to manage their risk more efficiently, and the extended GTH could help them to do so. With it, they can react in real-time to global macroeconomics events and adjust their positions accordingly.
Essentially, they can track popular market sentiment and choose the best stocks according to the VIX’s movements.
While CBOE makes efforts to educate and open the market to a broader range of investors, options trading is a risky strategy.
Investors should recognize that while there’s potentially upside in options investing there’s usually also a risk when it comes to the options’ liquidity, and premium costs can devour an investor’s profits. That means it’s not the best choice for those looking for a safer investment.
While some investors may want further guidance and less risk, for other investors, options trading may be appealing. Investors should fully understand options trading before implementing it.
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About the author
Ashley Kilroy
Ashley Kilroy is a seasoned personal finance writer with 15 years of experience simplifying complex concepts for individuals seeking financial security. Her expertise has shined through in well-known publications like Rolling Stone, Forbes, SmartAsset, and Money Talks News. Read full bio.
Options involve risks, including substantial risk of loss and the possibility an investor may lose the entire amount invested in a short period of time. Before an investor begins trading options they should familiarize themselves with the Characteristics and Risks of Standardized Options . Tax considerations with options transactions are unique, investors should consult with their tax advisor to understand the impact to their taxes. Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
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Tax credits and tax deductions work differently, with deductions lowering your taxable income and credits actually reducing the taxes you owe.
To be a little more specific, deductions can decrease the amount of income you have to pay taxes on, which can lower your final bill. Tax credits are a dollar-for-dollar reduction in what you owe — and might even get you a bigger tax refund.
It’s possible you may be able to claim both deductions and credits. Read on to understand more about how both options work.
Key Points
• Taxes fund government activities and are mandatory for individuals and corporations.
• Income tax rates increase with higher earnings, but deductions and credits may be possible to reduce how much you owe.
• Tax deductions lower the amount of income on which you are taxed.
• Tax credits directly reduce the tax that you owe the government.
• Property tax, sales tax, and capital gains tax are among the other taxes you may owe.
What Are Tax Credits?
Tax credits represent a dollar-for-dollar reduction in your overall tax burden. They directly lower the tax amount you owe to Uncle Sam.
For example, if you owe $1,500 in taxes but qualify for a $500 tax credit, your total tax bill will decrease by $500, meaning you’ll only have to pay $1,000. That can leave more money in your bank account.
How Do Tax Credits Work?
When filing your taxes, you can use IRS resources, tax software, or a certified accountant to research tax credits for which you may be eligible. If it’s your first time filing taxes, these resources can be especially helpful.
Even if you don’t owe anything in taxes, it’s worth looking into tax credits. Why? Because some tax credits are refundable, meaning the government might owe you money:
• Refundable tax credits allow your tax liability to go below zero. For example, if you owe $100 in taxes but receive a $500 refundable tax credit, the government will actually owe you $400.
• Nonrefundable tax credits do not work that way, unfortunately. If you qualify for a nonrefundable tax credit, the best it can do is eliminate your tax liability (meaning you owe nothing). But even if the credit is large enough to wipe out what you owe and there’s still money left over, you don’t get to stash that money in, say, your savings account.
Tax credits are not for everyone. Each credit has specific requirements to qualify.
Your tax software or accountant should know the full list of tax credits to look out for, and the IRS website features the whole list. (You can also learn important information from an online tax help center.)
Before diving into your taxes, however, it’s a good idea to note some of the most common tax credits for which you may qualify:
• Earned Income Tax Credit: Commonly called by its initials (EITC), this refundable tax credit is for low- to moderate-income workers. The amount you might qualify for and your eligibility can vary depending on whether you have dependents and/or have a disability.
• American Opportunity Tax Credit: This education tax credit is partially refundable. Students (or parents claiming a student as a dependent) can claim this tax credit for the first four years of higher education. It’s $2,500 per eligible student, but once your tax bill hits zero, you can earn 40% of whatever remains (up to $1,000) as a tax refund.
• Child Tax Credit: Even if a child isn’t enrolled in higher education, parents have access to a handy tax credit. The Child Tax Credit is a refundable tax credit for parents (with dependent children) who meet income requirements.
• Child and Dependent Care Credit: Parents have access to yet another potential tax credit, this time for those who pay for babysitters or daycare. The credit amount depends on such factors as your income, child care costs, and number of children requiring care.
You can use tools on the IRS website to discover if you qualify for these and other tax credits.
What Are Tax Deductions?
Tax deductions are another way to reduce your tax burden, but they work differently. While a tax credit discounts your final tax bill after all the calculations, a tax deduction reduces the amount of income eligible for taxes.
The more deductions you have, the less money you have to pay taxes on. This can result in a lower overall tax bill, but it cannot result in a tax refund.
Here’s an example to understand how tax deductions reduce what you owe:
If you made $110,000 in a given year, you would owe 24% in federal taxes based on your marginal tax bracket. But if you have $20,000 in tax deductions, you would lower your taxable income to $90,000, which puts you at both a lower base to calculate taxes ($90K vs. $100K), and you would be in the 22% tax bracket, which is capped at $100,525 for single filers.
As you can see, when calculating how much a tax deduction will save you, it’s important to know which tax bracket you’re in — your tax bracket represents the percentage at which your income could be taxed. In general, the more money you make, the higher the tax rate.
Common Tax Deductions
Nearly every tax filer is eligible for the standard deduction. Without inputting any information accounting for business expenses, medical costs, charitable contributions, student loan interest payments, and other eligible deductions, you can simply subtract the standard deduction amount from your taxable income.
For the 2024 tax year (which will be filed in April of 2025), the standard deduction is:
• 14,600 for single taxpayers (and married, filing separately)
• $29,200 for married taxpayers filing jointly
• $21,900 for heads of household.
Many people choose to take the standard deduction, but if you qualify for various deductions that would amount to more than the standard deduction, it’s worth itemizing your deductions.
Working with a personal accountant or tax preparation software may be your best bet for determining which deductions you qualify for. Here are some of the most common types of deductions:
• State and local taxes
• Business expenses (if you are self-employed)
• Mortgage interest
• Property taxes
• Qualifying medical expenses
• Charitable contributions
• Student loan interest.
You can explore even more tax deductions on the IRS website.
Tax credits are largely a good thing, as they reduce your overall tax burden. But they also have some drawbacks. Here’s a closer look at the pros and cons:
Pros
First, consider these upsides of tax credits:
• Reduces your tax bill, which could leave more money in your checking account
• May result in a refund
• Often designed for moderate- to low-income families.
Similarly, tax deductions serve a useful purpose in filing taxes, but they also have their own set of pros and cons.
Pros
Here are the potential advantages of tax deductions:
• Reduces your tax bill
• The standard deduction is easy to claim
• Useful for self-employed individuals with business expenses.
Cons
Also be aware of the possible downsides:
• Lots of paperwork (itemized deductions)
• Weighing the standard vs. itemized deduction can be complicated
• Won’t generate a refund.
Tax Credits vs Deductions: What’s the Difference?
Let’s break down the differences between tax credits and tax deductions in chart form:
Tax Credits
Tax Deductions
Dollar-for-dollar reduction in your total tax bill
Reduction in how much income you have to pay taxes on
Can result in a tax refund
Can only reduce taxable income; cannot result in tax refund
Must claim specific credits for which you qualify
Can take the standard deduction or itemize your deductions
Only available to filers who meet specific criteria
Available to most filers as standard deduction
While nearly everyone can qualify for the standard deduction, tax credits can actually be the more effective way to lower your tax bill. But the best part? You can utilize both tax strategies when you file.
• Research eligibility requirements online: The IRS website has useful tools to help determine if you qualify for specific tax credits and deductions.
• Gather all your paperwork: Taxes require a lot of forms, documents, and receipts. When claiming credits and deductions, it’s important to have the paperwork (whether printed or digital) to prove your eligibility.
• Consider using tax software or an accountant: Taxes can be overwhelming. If your situation is complex (maybe you are confused by, say, your payroll deductions), you may benefit from tax software (TurboTax, H&R Block, and TaxSlayer are popular brands) or a tax professional.
One last note: If you do wind up with a tax refund, you might put it in your emergency fund or, if you don’t have one yet, start one. Experts say to aim to have three to six months’ worth of living expenses set aside in case of job loss or unexpected major bills.
The Takeaway
Tax credits and tax deductions can both lower your overall tax burden. Tax credits reduce what you owe dollar-for-dollar, while tax deductions reduce the amount of income you owe taxes on. If you’re eligible, you can take advantage of both tax strategies when you file.
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FAQ
Between a tax deduction and tax credit, which lowers your bill more?
A tax credit lowers your tax bill dollar-for-dollar and may even result in a refund. A tax deduction only reduces the amount of money you owe taxes on. For example, a $1,000 tax credit takes $1,000 off your tax bill. A $1,000 tax deduction reduces your taxable income by $1,000; the actual reduction in tax depends on your tax bracket.
Do more people utilize tax credits or tax deductions?
Most tax filers can claim the standard deduction, but not everyone qualifies for tax credits. So it is more likely that you’ll use a tax deduction on your tax return than a tax credit. That said, it is possible to use both credits and deductions to lower your tax bill.
Can I claim both deductions and tax credits?
Yes, you can claim both tax deductions and tax credits on your tax return, as long as you qualify for the deductions and credits you claim.
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Deciding to pursue a master’s degree during a recession can be a strategic move or a financial risk, depending on your circumstances. While economic downturns often reduce job opportunities, they can also provide a chance to invest in education, build new skills, and enhance career prospects.
Historically, times of economic turmoil have seen big upticks in graduate school enrollment. But is this the right move for you now?
This guide explores the pros and cons of pursuing a master’s degree during uncertain economic times to help you make an informed decision.
Key Points
• Economic downturns often lead to higher enrollment in graduate programs as individuals seek to enhance their qualifications amid a competitive job market.
• Obtaining a master’s degree can lead to higher median weekly earnings compared to holding only a bachelor’s degree.
• Graduate degree holders typically experience lower unemployment rates, suggesting that advanced education may provide increased job stability during recessions.
• The rise of online graduate programs offers flexibility and accessibility, allowing individuals to pursue advanced degrees without relocating or leaving employment.
• Prospective students should carefully consider tuition costs and potential student loan debt to determine if pursuing a graduate degree during a recession is worth it.
Why People Go Back To School During Recessions
Periods of decline in economic activity (aka recessions) are commonly accompanied by corporate layoffs, rising unemployment, and dwindling wage growth. Because there are fewer employment opportunities, job hunting and career advancement become more competitive. Many workers decide a return to school, often to earn a master’s degree, makes sense in a tough employment market.
Earning an advanced degree can boost your earning power in your chosen field or provide an opportunity to change fields. Career changers may gravitate to growing, “recession-proof” industries and fields that they are passionate about.
Whether you should get a master’s degree depends on your professional and academic goals. A master’s degree indicates a high level of knowledge in a profession or research area. It takes anywhere from one to three years of full-time study to complete a master’s. A bachelor’s degree is required to apply for a master’s program.
For academics, a master’s is usually a stepping stone to a Ph.D. or other doctoral degree. Professional master’s degrees can also be the first step toward advanced degrees required for doctors, pharmacists, and lawyers, and are a necessary part of education for those careers.
Master’s degrees can also be required or particularly helpful in education, social service, health care, business, and STEM fields (science, technology, engineering, and mathematics).
For many people, a recession is a good time to go back to school, either full- or part-time. Here’s why.
Potential Salary Boost
In many careers, a master’s degree will command a higher salary and increase job security. According to the Bureau of Labor Statistics (BLS), workers with graduate degrees (master’s, professional, and doctoral) have the highest earnings.
The median weekly earnings for full-time workers over 25 with a master’s degree is $1,737, compared to $1,493 for employees with a bachelor’s degree only.
Increased Job Security
Workers with graduate degrees also experience lower levels of unemployment, according to BLS data. The unemployment rate in 2023 for people with a master’s was 2.0%, compared to 2.2% for workers with bachelor’s degrees.
People who have been negatively affected by a recession — either laid off or unemployed for an extended period — often find that an advanced degree can lead to more job security and advancement. As mentioned above, recessions can also be a good time for workers in hard-hit industries to gain skills and knowledge through a master’s in a fast-growing field.
Many grad school students find that networking with other students, faculty, and alumni helps them find new opportunities, especially in a competitive job market.
Easy Access To High Quality Programs
Hundreds of high-quality, in-demand graduate degree programs are now available online from prestigious colleges and universities. Remote learning makes these programs accessible to students anywhere in the country. Online programs often cost less than in-person learning and can offer more flexibility for students who need to continue working full- or part-time.
Grad school isn’t right for everyone, and making this move demands careful consideration. Potential cons of going to grad school in a recession include:
Costs and Potential Debt
The average cost of a master’s degree is $62,820, according to a 2024 report from the Education Data Initiative. That does not include living expenses or lost wages from taking time off work. And people with a master’s degree carry an average of $69,140 in student loan debt.
Determining whether taking on federal or private student loan debt is worth the increased earning potential or career satisfaction is an important step in your decision-making process.
Increased Competition for Admissions
You’re not the only one debating whether to ride out tough economic times by going back to grad school. That can mean increased competition for the best programs. If a degree from a particular college or university is part of your career plan, carefully consider your timing.
Missed Work Experience
If you’re considering leaving a job to attend grad school, keep in mind that you may miss valuable work experience that can put you in a better position when the recession ends. Working part-time can help pay for grad school and sometimes alleviates missed work experience, but not always. That’s because part-time employees don’t always encounter the same opportunities to gain valuable experience as full-time staffers.
Depending on the field of study and institution, master’s programs range from $18,000 to $47,000 per year. Unlike many doctorate programs that waive tuition and fees and even offer a stipend, master’s degrees are not fully funded.
Ways To Pay for a Master’s Degree
Most students rely on a combination of savings, scholarships, grants, federal loans, private loans, and help from employers to pay for graduate school.
Federal Grants
Federal grant programs include the Pell Grant, which is generally available only to undergrads who demonstrate exceptional financial need. However, it may be possible to receive some grant funding to help you pay for grad school during a recession. Remember, this time around you’re an independent student, and you won’t be tied to your family’s income to determine need.
Another federal grant that may be available to graduate students is the Teacher Education Assistance for College and Higher Education, or TEACH Grant. This grant has relatively stringent requirements and is available for students pursuing a teaching career who are willing to fulfill a service obligation after graduation.
The FAFSA also gives you access to many scholarships. There are scholarships offered in every field imaginable. Start your search with these online tools:
Grad students may be offered loans as part of their financial aid offer. A loan is money you borrow and must pay back with interest. Loans made by the federal government, called federal student loans, usually have more benefits than loans from banks or other private sources.
The lifetime limit for Direct Subsidized and Unsubsidized student loans is $138,500 for graduate or professional students. Of this amount, no more than $65,500 can be in subsidized loans. This includes student loans borrowed during undergraduate study.
Private Student Loans
Many students also rely on private student loans to help pay for graduate school. The maximum amount that students can borrow with a private student loan varies by lender, but can’t exceed the cost of attendance.
The cost of attendance is the combined total of tuition and fees, books and supplies, living expenses, transportation, and miscellaneous expenses. This estimate may also include dependent care, study-abroad, and costs related to disabilities.
Pursuing a master’s degree can be a great way to enhance your skills and career opportunities. Taking advantage of a slow or troubled economic time to do so can help ensure your job security in the future. That said, it’s important to consider the tuition costs associated with a graduate degree, the potential for taking on debt, and the effects of missed earnings and opportunities if you take time off work to go back to school.
Ways to pay for graduate school include cash savings, tuition assistance from your employer, scholarships, grants, and federal and private student loans.
If you’ve exhausted all federal student aid options, no-fee private student loans from SoFi can help you pay for school. The online application process is easy, and you can see rates and terms in just minutes. Repayment plans are flexible, so you can find an option that works for your financial plan and budget.
Cover up to 100% of school-certified costs including tuition, books, supplies, room and board, and transportation with a private student loan from SoFi.
FAQ
Is grad school a good place to ride out a recession?
It can be. Recessions are usually accompanied by high unemployment and layoffs. For many people, gaining new skills and expertise in a graduate program can be a good way to make yourself recession-proof in the future.
Do more people head for grad school during a recession?
Yes, more people often pursue graduate school during a recession as job opportunities shrink and individuals look to enhance skills or change careers. Higher education can provide a competitive edge, but it’s crucial to weigh the costs, especially when taking on debt during uncertain economic times.
What are worthwhile master’s degrees to get during a recession?
Master’s degrees in fields with strong job stability and growth potential are worthwhile during a recession. Examples include health care, data science, cybersecurity, education, and business administration (MBA). These fields often offer consistent demand, diverse career opportunities, and higher earning potential, making them strategic choices in uncertain economic times.
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A trade school, often called a vocational or technical school, provides specific job skills to start a career quickly in a given trade, with the requisite certifications and licenses. That career can range from being an electrician to a physician’s assistant to a cook. As opposed to a four-year college, a trade school education is generally completed in just two years and focuses on getting students hands-on experience and securing the job they want.
Trade school costs an average of $12,000 to $20,000+ per year. While trade school can be significantly less costly and require less time than a four year degree, there are still expenses to consider. Continue reading for more information on how expensive trade school is and planning for trade school costs.
Key Points
• Trade schools offer focused training in specific job skills, allowing students to enter careers quickly, typically completing programs in less than two years.
• The annual cost of trade school tuition can range from approximately $4,200 to $25,000+, depending on factors like the school and program.
• Additional expenses for trade school often include costs for books, supplies, and living expenses, which can vary greatly based on individual circumstances.
• Financial options for attending trade school include federal aid, grants, scholarships, and part-time work, which can help cover educational costs.
• When selecting a trade school, important considerations include program accreditation, completion time, available on-the-job training opportunities, and employment support services.
What Is Trade School?
College is not for everyone. Trade school can provide a path to a rewarding career, without the time and money required to pursue a four-year degree.
Trade school is a type of education that provides training in a specific job or skill set to allow students to start a given trade or career with the requisite certifications and appropriate licenses. Also known as vocational or technical schools, trade school can be a stepping stone into a career as a plumber, electrician, dental hygienist, pharmacy technician, paralegal, and more.
Trade schools may be private or public institutions, and it can take as little as a few months to two plus years to complete a trade school program. Community colleges may offer vocational programs or more general education classes for students planning to transfer to a four-year institution.
How Much Does Trade School Cost
The cost of trade school varies widely based on factors including the school, the program you are pursuing, and your location. According to the Integrated Postsecondary Education Data System (IPEDs), the average cost of trade school was $15,070 for the 2022-23 school year.
Tuition
The cost of tuition for trade school can range dramatically, from $4,200 to $25,000+ per year. Here is the average cost of tuition and fees for popular trade school programs, according to IPEDs:
• Patient Care Assistant/Aide: $4,280
• Welder: $11,230
• HVAC Tech: $11,630
• Licensed Practical Nurse: $14,700
• Cosmetologist: $16,230
• Auto Tech: $25,870
Books and Supplies
The cost of books and supplies will vary based on the vocational program or trade school. According to data from IPEDs, the average cost of books at a two-year public institution was $1,720 for the 2022-23 school year.
Living Expenses
Unsurprisingly, the cost of living expenses can also vary quite dramatically from student to student. Some students who are attending trade school may be able to live at home with family members. This could help them reduce costs because they may have little to no rent, and share meals with family members.
Trade school students who are living on their own may need to budget for more expensive living costs.
When it comes to paying for college, or trade school, there are a few options available to students, including loans, federal aid, grants, and more.
Trade School Loans
The term “trade school loan” is just a way to refer to a student loan, personal loan, or outside funding measure used to pay one’s way through a training or vocational school.
Many trade and vocational schools may qualify for federal student loans and other forms of federal financial aid. To apply for federal loans, students will need to fill out the Free Application for Federal Student Aid (FAFSA®) each year.
There are limits for federal student loans, and some students may consider a private student loan to supplement the cost of tuition and living expenses. Private student loans are available from private institutions, but they may not offer the same benefits or protections as federal student loans.
Working Part-Time
Trade schools generally offer flexible programming — for example, night classes — so students may be able to work part-time to fund their education. Students may consider getting a part-time job in the field they are studying, or working at a gig that is willing to accommodate their school schedule so they have enough time to take classes and study.
Financial Aid for Trade School
As already mentioned, trade schools may qualify for federal financial aid — including student loans, grants, and scholarships. Federal aid can be used for technical schools and some certificate programs as long as the schools are accredited and eligible for federal funds. You can check the Department of Education’s database of qualifying schools to confirm your chosen trade school program qualifies.
Grants
Students at eligible trade schools may qualify for a Pell Grant. A Pell Grant is a type of federal grant that is awarded to students who demonstrate exceptional financial need. The maximum amount for the 2024-25 school year is $7,395.
Scholarships
There may also be scholarships available for trade school students. Certain trade schools may offer scholarships, and there are vocational school scholarships available from private organizations, as well. To find trade school scholarships, check with your school’s financial aid office or search online scholarship databases.
Trade school can make sense for students who are interested in pursuing a specific vocation and are not interested in attending a more traditional four-year school. To evaluate trade schools, consider the following factors:
• Program accreditation: This can give you an idea of a program’s reputation. Accredited schools may qualify for federal financial aid, as well.
• Time to complete: This will tell you how long it will take you to complete the program, along with the total cost of the program.
• Opportunities for paid, on-the-job training: Some programs may offer a combination of in-classroom learning and paid job training. Gaining this real world experience can be valuable.
• Employment assistance or support: Some trade schools have close connections with local businesses or industries. Find out if there is a career connections office or any job placement assistance from your school.
Private Student Loans for Trade School
SoFi doesn’t offer student loans for trade school programs, but does offer private student loans for eligible graduate certificate programs. If you’re a college student interested in pursuing a certificate program, a SoFi private loan could be a tool to help you finance the program.
If you’ve exhausted all federal student aid options, no-fee private student loans from SoFi can help you pay for school. The online application process is easy, and you can see rates and terms in just minutes. Repayment plans are flexible, so you can find an option that works for your financial plan and budget.
Cover up to 100% of school-certified costs including tuition, books, supplies, room and board, and transportation with a private student loan from SoFi.
FAQ
Are trade schools more affordable than four-year universities?
Trade schools are generally more affordable than a college or university. In addition to having a more affordable annual tuition, typically trade school programs can be completed in less than four years.
What are the most high-paying trade jobs?
Some of the highest-paying trade jobs include elevator and escalator installers, radiation therapists, dental hygienists, aircraft mechanics, and construction managers. These roles typically require specialized training or certification from trade schools and offer competitive salaries, job stability, and opportunities for career growth in high-demand industries.
How long is trade school?
The length of trade school can vary based on the program. Some trade school programs can be completed in a few months while others may take two years to complete.
SoFi Private Student Loans Please borrow responsibly. SoFi Private Student loans are not a substitute for federal loans, grants, and work-study programs. We encourage you to evaluate all your federal student aid options before you consider any private loans, including ours. Read our FAQs.
Terms and Conditions Apply. SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. SoFi Private Student loans are subject to program terms and restrictions, such as completion of a loan application and self-certification form, verification of application information, the student's at least half-time enrollment in a degree program at a SoFi-participating school, and, if applicable, a co-signer. In addition, borrowers must be U.S. citizens or other eligible status, be residing in the U.S., and must meet SoFi’s underwriting requirements, including verification of sufficient income to support your ability to repay. Minimum loan amount is $1,000. See SoFi.com/eligibility for more information. Lowest rates reserved for the most creditworthy borrowers. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change. This information is current as of 04/24/2024 and is subject to change. SoFi Private Student loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891. (www.nmlsconsumeraccess.org).
SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.
External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
