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For-Profit vs. Nonprofit Colleges: What's the Difference?

Apr 19, 2010 Jennifer Williamson, Distance Education.org Columnist | 3 Comments

The traditional stereotype of an American college is probably nonprofit. It’s a four-year educational institution with on-site dorms, student activities, picturesque campuses, and a range of Bachelor’s degrees (as well as some Associate’s and postgraduate degree options, sometimes) in the liberal arts, humanities and the sciences. At a nonprofit college, an education is a goal in and of itself—although your tuition bill might still be hefty, depending on your financial need and the aid package you get. Nonprofit colleges are funded by state and private grants as well as tuition paid by students.

Books and Grass

A for-profit college is a different animal. It’s generally more career-focused, sometimes with a vocational or technology slant. It’s run like a business, and may be backed by investors or revenue-seeking companies. A for-profit school will generally be more focused toward adult and nontraditional learners, and be more likely to offer part-time and online classes—although nowadays many nonprofit schools are offering online degree programs as well.

Critics argue that for-profit schools miss the point of a college education: learning for its own sake. They worry that seeking to earn money could take precedence over educating students. But proponents say for-profit schools are more geared toward today’s career focused students and are making college more accessible to the nontraditional set.

As far as admissions, it’s generally much easier to get into a for-profit college than a nonprofit. That’s because, as each student is a potential profit source, it’s against the for-profit college’s financial interest to turn anyone away. You’re more likely to get in—but with the standards for student entry lower, the standards for academics may be lower as well.

Both colleges are able to offer federal loans and grants as well as private financial aid. However, nonprofit colleges can be more expensive for students than for-profit schools. Nonprofit private schools often have higher costs; they offer all the expensive fringe benefits of a traditional college, such as room and board, study-abroad programs, sports and extracurriculars. They rely on tuition as well as grants to run, so they can put a heavy tuition burden on students. For-profit schools also charge tuition, of course—but as they usually have lower costs and offer a much more “no-frills” education, they tend to cost less.

Coursework at a for-profit school tends to be more focused, as well. If you want to target a specific skill, you don’t have to follow a traditional liberal arts curriculum involving lots of other classes that aren’t necessarily relevant to that skill. This means you may get to graduate sooner, although you’ll have a less well-rounded education.

You aren’t likely to find a for-profit college that offers housing, meals, or student extracurricular activities—although there are a few exceptions. However, overall most students of for-profit colleges are there to earn a degree and advance their career, not get the full college experience—and if they can save some money on tuition by skipping on the fringe benefits, they will.

Overall, for-profit colleges have a controversial history. There have been scandals even in the recent past that have caused regulators to take a closer look at the industry—the Department of Education testified in 2005 that almost three-fourths of the agency’s fraud cases have involved for-profit schools, according to one article in Slate Magazine. However, there are quite a few legitimate for-profit colleges that provide a great education, and the schools do fill a need as leaders in offering accelerated degree programs, flexible scheduling, online degrees and other programs geared specifically toward working students. 

As to whether for-profit colleges are right for you, it depends. Choose a school with regional accreditation—or national accreditation for the department or degree program you’re studying in. Beware of claims of 80% or 90% job placement after graduation—these numbers seem too good to be true and are generally not substantiated. Be sure the school offers qualified instructors with job experience or advanced degrees. And research the acceptance rate of for-profit degrees among employers in your industry. If you do your research, you’re likely to make a better college admissions decision—whether you choose a nonprofit or for-profit school.

Comments:

Michael Keathley Over a year ago

There is some good information here, but the pargraph "As far as admissions, it’s generally much easier to get into a for-profit college than a nonprofit. That’s because, as each student is a potential profit source, it’s against the for-profit college’s financial interest to turn anyone away. You’re more likely to get in—but with the standards for student entry lower, the standards for academics may be lower as well." is misleading. Some sources/links to demonstrate this? Are there no non-profit and/or public schools with open admissions?

Jill Rooney Over a year ago

It seems to me that this article glosses over the main difference between for-profit and non-profit colleges: where the money goes. The statement "critics argue that for-profit schools miss the point of a college education: learning for its own sake" does not at all reflect the majority of the criticisms of for-profit colleges. I don't know of a single non-profit college that advocates this kind of education. In fact, state colleges and universities, for example, offer extensive career-planning and job placement offices and services. Instead, the criticisms of for-profit colleges are rooted not in an antiquated "learning for its own sake" but real questions about who gets the profit. At non-profit schools, which do not have investors or stock-holders expecting a return on their investment, the money gets funneled back into the school. While we may have individual quibbles about how that money is spent at a college, there is one thing we do know: it does not go into the pockets of private investors.

There are most definitely non-profit colleges that have either open admissions or 100% acceptance rates. Community colleges often fall into this category. Also check out this link for a more comprehensive listing: http://colleges.usnews.ranking...

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