For-Profit schools saw a drastic increase in enrollment between 1990 and 2010 and then saw a sharp decrease. For-Profit schools saw this increase due to their ability to meet the needs of non-traditional students and provide technical training that wasn’t always offered at non-profit colleges. So why the sudden decrease in enrollment? Aside from the bad rap they sometimes get from high profile corruption cases due to some of them using questionable recruiting practices and conferring meaningless degrees, not all are bad. While the largest chain, Corinthian Colleges went bankrupt and the University of Phoenix had a drop of 50% enrollment this can be explained. It is due to the Gainful Employment Rule which was implemented in 2014 and then was later rescinded in 2019. Where does this leave for-profit schools? What defines a for-profit school?
A for-profit school operates with the goal of earning a profit from the education they provide enrolled students. That is fairly easy to understand, but what are the underlying implications that are less obvious? Many of their operational practices and decisions are driven by an incentive of turning a profit. That means that their motives and decisions are not driven by the educational needs and benefits of the attending students. This places their priorities in different areas such as marketing and recruiting rather than research, qualified instructors, or quality curriculum. In a nutshell, a significant amount of tuition goes to funding investors and marketing, so they can ensure a profit. For-profit schools earn their revenue through the tuition of students. They are supported by investors and investors expect to see a return on their investment. This translates into their mission to earn a profit.
A not for profit or non-profit school reinvests the revenue back into the institution. Re-investing that money can be done in many ways such as instructors’ salaries, quality curriculum, physical improvements on campus, library resources, student services, and more. Another distinction is how the revenue is made by the institution. The result of this differing mission is that students receive a more consistent, quality education with other services. A non-profit school earns revenue through tuition as well as other means such as research, grants, and more.
Why even consider a for-profit school? Many of these institutions provide online degrees, flexible courses, technical training, and niche specific courses. This means that these educational opportunities are available to anyone anywhere as long as they have access to a computer and the internet. Two of the largest for-profit schools are the University of Phoenix and Kaplan. They have a solid reputation and provide entirely online courses and degrees in a variety of disciplines. Another benefit of for-profit schools is that most of them have a 100% acceptance rate. Meaning that anyone can enroll regardless of standardized test scores or previous grades and educational experience. What this means is for some individuals this may be their only option to gain new skills and increase their knowledge to improve their employment and quality of life. Often students can gain marketable skills at a for-profit school that would be of greater value than a degree or certification from a traditional institution for higher learning. For some working adults, this online model of education works best for them to advance their opportunities. Though this may be the case students should be aware and warned that some employers will hold a degree from a for-profit institution in lower regard.
How to determine a good for-profit college starts with looking into the institution’s accreditation. There are schools that will provide practical skills and courses that meet the needs of students today giving them the knowledge they need in a given field. Accreditation is done through a qualified third party that determines if programs or entire institutions meet and adhere to the current high-quality operational standards. This can be done through regional accreditation or national accreditation. It is imperative that students attend an institution that is accredited, if they do not many employers will not accept their degrees or certifications Regional accreditation is preferable as credits earned from a regionally accredited school can more easily be transferred to another institution. In the search for good for-profit schools, start by searching for those that are regionally accredited.
Many think private schools are for-profit schools, that is not necessarily true. While for-profit schools are technically privately owned they are not considered to fall under the same banner as private schools. The term private school refers to an institution that is both tax-exempt and a non-profit school. The cost of attending a private school may be greater than that of a public school but like a public non-profit school, the revenue is invested back into the school, not investors. Thus the private Ivy League institutions are also non-profit institutions. They may be costly to attend with high tuition but these highly regarded institutions reinvest their revenue back into the schools, thus meeting the first qualification for being a non-profit institution. Much of their revenue goes to state-of-the-art equipment, research, infrastructure, top educators, and so much more