Trade School for All

“A very disparate and low amount of financial aid opportunities are available for students pursuing trade education compared to a traditional four-year university,” explains Eric Menees, CEO of Fynn, which provides students of all income levels with secure loans to attend qualifying trade schools. “The demographic of many of these students is at or near the poverty line.”

Many Gen Z students don’t have a credit history yet and may have a low-paying job that makes them unable to afford a CTE school, he adds.

“We work with many trade schools across the country; they may have 200 to 300 millennial or Gen Z applicants for 100 seats, but only 30 students end up in the classroom,” Menees says. “And the answer every time is financial. It's not that they don't want to go to the school; they just don't know how.”

It's a difficult problem for the schools, too, he adds, an “existential threat. They're seeing so much demand from the employer side and so much interest from the supply side, but they're unable to grow and do their business and get it through. They have good programs and so many people applying, but they don't have any capital sources to help these students get in.”

Growing up in Houston, many of Menees’ family members worked in the construction trades. And many of his high school friends had aspirations of being mechanics, HVAC techs or welders but had financial hurdles to overcome.

“The trades were always a normal part of life for me,” he recalls. “However, moving around the country, pursuing my passions in research and mechanical engineering, I realized that the trades were not as normalized and accessible as they were for my family and friends. Starting this business in the last couple of years, I wanted to do something about that. I knew a lot about it and was very passionate about the need for helping lower-income people achieve a lucrative career in the trades.”

Invested in Students’ Success

Of course, CTE students have financial aid options, but not as diverse as their college/university counterparts. Many trade organizations offer scholarships for students pursuing a trades career.

Federal aid also is an option. “Federal student loans offer fixed interest rates that are usually lower than what you’d get with a private lender,” explains LendEDU.com. “They also come with certain benefits and features that private loans don’t, making them the best first option when it comes to funding trade school.”

However, many CTE institutions find it difficult to meet federal loan requirements. “Federal aid doesn't reach 70% of these post-secondary training institutions,” Menees says.

Private loans are available for CTE students, but only a few financial institutions offer them, including College Ave, Sallie Mae and Ascent, LendEDU.com notes. Some have minimum credit score requirements, making them unobtainable for Gen Z students. Or they are offered loans with extremely high APRs, making them difficult to pay back.

This is where Fynn comes in. It offers fair and affordable loans to students of all backgrounds to attend qualifying trade schools. “We had to build a product that worked for the 60% to 80% of students applying to these schools,” Menees explains.

Fynn loans cover the full cost of the career program, unlike federal loans that only cover half the costs, requiring students to take out private loans for the remainder. No credit or co-signer is needed. It's a fully automated process with same-day decisions.

Payment options are affordable. The initial grace period for starting payments is 60 days after finishing a program; Fynn sets up an income-based repayment schedule generally the same for all students enrolled in a specific program at a specific school campus.

The firm offers three big benefits for students accepting its loans:

1. Payment reduction. If income drops below a certain level, Fynn will cover up to 20% of the monthly payment—no fees, no penalties, and you never have to pay back the amount Fynn covered.

2. Payment pause. If income drops significantly below an average salary for the occupation or loan recipients becomes unemployed, they can apply to pause payments. Interest also stops accruing during a payment pause.

3. Loan forgiveness. Fynn will forgive any outstanding balance if recipients haven’t finished paying off their loans within 15 years.

“We want our students to succeed,” Menees says. “We only work in trades that we see a significant supply-and-demand mismatch such that any student who graduates one of these programs will get the job because there's such a need for that career. Whether we're talking about nurses, truck drivers, plumbers, HVAC techs or welders, these trades have a good outcome for the students.”

Fynn is lending to about 100 schools in 14 states. And the company normally works with schools that have been around for five, 10 or 15 years and have a proven track record of good outcomes for students.

“We don't want somebody to take out a loan for something they're passionate about and then not be able to succeed in that career; that's the worst case,” he notes. “We want this to be affordable and not a debt burden to them. And we never try to pursue something in bankruptcy, as many lenders do. That's horrible; it's a person's last chance to get back on their feet.”

Fynn’s customer service team works with students throughout their CTE programs. The career success and job placement team helps students if they struggle with a resume or interview prep because some have never interviewed for a job.

“We're much more hands-on with students, much more interactive than run-of-the-mill lenders,” Menees explains. “So, we'll help students if they need that extra push or connection with the employer. We succeed and the students succeed because we’ve aligned our incentives together.”

He points out that CTE funding is a huge issue; one company can’t affect the change needed.

“This is a massive market, and we're just one company doing it, but it's not something that one company solves,” Menees says. “We need to get the government and regulators a little more involved, a little more aware of how certain policies around federal funding impact the ability for students to enter these very essential careers.”

Sidebar: Vocational Training Resources

USA.gov has a job training resources page that includes state-by-state Department of Labor links, as well as career training links for specific groups such as veterans, young adults or people with disabilities.

https://www.usa.gov/job-training

Job Corps offers free training in a variety of construction trades, including electrical, carpentry and plumbing. The Job Corps program can even offer housing, food aid, medical care and a living allowance to those who qualify.

https://www.jobcorps.gov/industry/construction

The United Association of Journeymen and Apprentices of the Plumbing and Pipefitting Industry of the United States and Canada (UA) offers a comprehensive five-year apprenticeship program that involves classroom, workshop and on-the-job training.

https://ua.org/education-and-training/become-an-apprentice/

The Mechancial Contractor Association of America (MCAA)’s Career Development Initiative helps MCAA members connect with students for internships or full-time employment. Interested students can look for employers on the Great Futures Job Board, or search for scholarships, grants, and awards.

https://www.mcaa.org/career-development-initiative/

The Plumbing-Heating-Cooling-Contractors Association (PHCC) has a training and education page with links to workforce readiness/pre-apprenticeship programs, plumbing & HVAC/R apprenticeship programs, construction management training and more.

https://www.phccweb.org/training-education/

SkillsUSA is a partnership of students, teachers and industry working together to ensure America has a skilled workforce. On their students’ resources page you can locate a chapter in your area, as well as discover information on scholarships, grants, awards, educational resources and more.

https://www.skillsusa.org/membership-resources/students/

Kelly Faloon is a contributing writer to CONTRACTOR magazine and principal of Faloon Editorial Services. The former editor of Plumbing & Mechanical magazine, she has nearly 35 years of experience in B2B publishing, with 25 of those years writing about the plumbing, heating, cooling and piping industry. Faloon is a journalism graduate of Michigan State University. You can reach her at [email protected].