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Pitfalls of For-Profit Education: Make Sure They Don't Happen to You

Dec 19, 2011 Jennifer Williamson, Distance Columnist | 6 Comments

There are plenty of pitfalls to going to college, whether you’re going to a for-profit or a nonprofit school. Students at both have been having trouble getting jobs, struggling under mountains of student debt, and sometimes regretting their college choices.

However, the problem seems to be worse with for-profit schools. Graduates often have trouble transferring credits, have larger amounts of student debt, and are more likely to default than graduates of nonprofit schools.

Here are a few pitfalls reported for students of for-profit schools—and how to avoid them in choosing a school.

Inability to transfer credits

It’s not unheard of for students who want to transfer credits from a for-profit school to a nonprofit school to experience some problems. Some nonprofit schools object to for-profits because of accreditation issues, while others object to the whole concept of for-profit college and tend to view credits from those colleges suspiciously regardless of accreditation.

To avoid this pitfall, you’ll have to do some asking around before you enroll in a for-profit school. First, be sure the school you choose has regional, not national, accreditation. There are a handful of regional accreditors throughout the US that accredit most mainstream nonprofit colleges, and you’ll have an easier time transferring credits if they come from a regionally-accredited school.

Next, talk to the schools you’d consider transferring to. Ask them how they’d view credits from the for-profit school you’re considering enrolling in—and what type of transfer situation you could expect.

Keyboard Skills

Choosing a school isn’t easy—and with the pitfalls of for-profit education in the news, it’s reasonable for students to be nervous about going to school at a for-profit.

Inability to find a job

Anecdotally, many students of for-profit colleges complain that their schools made big promises and claimed high graduate employment rates when they enrolled—only to find that, after graduation, employers would not accept their degrees.

Some for-profit colleges have indeed been found to have falsified graduate employment numbers—so don’t bother asking your school about its employment rates. Even if they’re not falsifying numbers, many schools manipulate statistics to tell students what they want them to know. Instead of talking to the school, talk to the graduates and the employers. Ask employers in your chosen field if they would hire someone with a degree from your for-profit college. Go on message boards and talk to graduates of the college, too. Ask them about their experience with the college’s job placement program, if there is one, as well as their experiences in the job market with their degrees.

High levels of debt

Graduates of for-profit colleges hold the highest average debt of any group of grads. Bachelor’s degree recipients graduating from four-year, for-profit programs have an average debt of $31,190, compared with an average of $!7,040 at private nonprofit schools and only $7,960 at public universities.

Some people might say that if a school is more expensive, it must be leading to better employment opportunities for students. But more students at for-profit colleges default, as well—so they’re not getting the great opportunities they were promised. The average default rate for all college graduates is around 6%, but default rates for for-profit college graduates is up around 15%.

For-profit colleges make most of their money through federal loans given to students. Studies show that while only 12% of students go to for-profit colleges, these colleges get 25% of all federal student aid.

Both community colleges and nonprofits often serve adult and nontraditional students with full-time jobs and family obligations, and often are more focused on job-specific degrees than on a liberal-arts education. In this way, for-profits are more comparable to community colleges than to private nonprofits. Community colleges are more reasonably priced, however—and for-profits are priced as high as exclusive four-year nonprofit colleges.

When applying to schools, really consider whether the for-profit degree you’re applying for is worth the money. In addition, do your research into community colleges that offer the same program. You don’t just have to look into local community colleges, as many throughout the nation offer online degrees. If you graduate from a community college, you’re likely to have much less debt.

Failure to graduate

According to some figures, fewer than half of all for-profit college students graduate. One reason for this is that for-profit colleges have an incentive to take every student, regardless of their preparation for college. A nonprofit school has an incentive to take only the best students—nonprofit colleges live and die by national “Top 10 College” ranking systems that use graduation rates as one of their barometers for the quality of the school’s education. But for-profit colleges are out for…well, profit. And the more students they enroll, the more financial aid they get—no matter how well-prepared the students are. As a result, for-profit schools take a lot of students who aren’t ready for college.

For students who enroll before they’re ready, the consequences are huge—thousands of dollars of student debt, and no degree. Don’t depend on the for-profit college to screen you out or tell you that you’re not ready for your program. Instead, do an honest self assessment—and take remedial classes online or at a local community college to build up your skills if you know you’re not ready for college-level work. In addition, assess your work-life balance. If you’re struggling to find the time to manage your job and family obligations already, without a college degree to work for, you may be an at-risk student when you do enroll. To avoid this, spend some time making room in your life for college—arranging for childcare or finding a way to reduce some work hours—before enrolling.

Low-quality instruction

Nonprofit colleges aren’t always shining examples of excellent instruction. Nonprofit schools sometimes hire professors based on their research backgrounds, not their teaching skills—and classes are sometimes taught entirely by graduate students or to an enormous theatre of students, with no individual attention. However, for-profit schools have an incentive to pay professors less to keep profits on the rise—and because of that, often attract the less-qualified candidates.

To find out about your school’s instruction quality, talk to the students. Find out what the online classroom experience is really like—and whether students at the school are satisfied with their instructors.

Choosing a school isn’t easy—and with the pitfalls of for-profit education in the news, it’s reasonable for students to be nervous about going to school at a for-profit. But for-profit schools aren’t necessarily all bad—and one of them may be the right school for you. It’s crucial to be aware of the pitfalls—and do what you can to avoid them in choosing a school.


the_truth_ferret Over a year ago

Great informative article! Kudos for the warnings to unknowing students!

Just to clarify: a four year degree at most for-profit schools cost in the range of $100,000. And this is a low-end figure with no interest tacked on each month to the unsubsidized student loans. Yes, interest is accrued every single month until the loans are paid in full.

Danny Maas Over a year ago

Anytime an educational institution is in the business of making money, I question the credibility. Is the research they do legitimate? Are their recruitment practices completely open and up front or is it more of a sales pitch? Will they be promoting products and services of business partners? I'm not suggesting these institutions are crooked necessarily - just that we ought to ask these tough questions of all institutions, and especially ones that are profit driven.

Jerspohn Over a year ago

I agree that selecting a school is often something daunting. School visits help prospective students get a feel for the instititution, and see if a 'fit' exists. I also believe that many students would be better served with community college as their starter school.

Renski17 Over a year ago

This article highlights the pitfalls of for-profit schools. In this tough economy, it pays to go to an accredited institution where your hard work will pay off ~ you will work in the career of your choice.

eslconsult Over a year ago

It's a business. They need clients too. But they need to tell potential students up front about the job market, the skills they will need and the realities about the skill set they bring when entering school.

Rishona Campbell 0 Months ago

Really great article. For-profit schools can work out for many people; but they have a lot of pitfalls. Some of the advantageous are easy, straightforward admission and the fact that many for-profit school offer programs that may not be available at non-profit schools (like web design). But it is important for people to go in with an accurate picture. As far as the financial aspect, for-profit schools can be a win if you can get your current employer to pay for your tuition; just make sure that their policies regarding tuition reimbursement would apply in your case.

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