Colleges and universities fall into one of two broad categories, namely, nonprofit and for-profit institutions. Both types of schools offer legitimate education to students, but the differences between these are worlds apart.
For-profit universities have become a mainstay, especially as they offer the type of educational services not available for college students in a traditional college. With evening and distance learning options (in the form of online college), many prospective students who are already working professionals can conveniently juggle work, family, and personal responsibilities with the rigors of earning an associate, bachelor’s, or even a master’s degree.
Usually, the overall cost of a for-profit school is expensive, which is why individuals considering a profit college need to learn and master the art of student budgeting. This is particularly true for younger adults who may not have had any chance of managing their own money. This guide will provide you with helpful information if you are thinking of getting into for-profit institutions. You will learn everything you need to know about for-profit schools and decide if they are right for you.
What is a For-Profit College?
A for-profit college is a privately owned educational institution that runs as a business or corporation, and the product they sell is education. The school is managed by shareholders whose goal is to make a profit by providing high-quality education.
Some for-profit colleges and universities offer the same programs and degrees available in a typical community college or state university. These institutions usually have courses that lead to degrees in criminal justice, education, medical fields, and business. Courses are mostly delivered and learned via virtual classes, with a few schools having both online and physical presence.
Another category of for-profit schools provides streamlined education and training in technical and vocational fields, such as dental assistance, nursing, auto repairs, fashion design, and more. In most cases, these types of for-profit institutions operate from a brick-and-mortar location due to the hands-on type of training they provide.
What Are Some Examples of For-Profit Colleges?
Some of the big-name for-profit colleges in the US include DeVry University, Colorado Technical University, Webster University, Kaplan University, and the University of Phoenix. But don’t be carried away by popularity and smart advertising. Many well-known for-profit institutions have been involved in scandals and eventually stopped operations after legal battles. The Corinthian College and ITT Technical Institute are two prime examples.
The general recommendation is to choose nonprofit colleges over profit institutions, but it would be unfair to categorize all for-profit schools as bad. Just as you won’t throw the baby out with the bathwater, there are good for-profit colleges if you do a little bit of research.
A Few Good Profit Institutions in the US
Here are some of the best for-profit colleges in the US.
1. DigiPen Institute of Technology, Redmond, WA
DigiPen is, no doubt, one of the leading for-profit institutions with a 57% acceptance rate and 47% graduation rate. The school’s net cost is around $34,700, which is rather on the high side. However, 91% of graduates find gainful employment within two years of graduation.
On average, graduates from DigiPen earn a median salary of $80,200 after six years, which is higher than most other for-profit schools and make up for most of the expenses during a four-year undergraduate learning period.
The school offers several programs in the field of technology, including Computer Science, Computer Engineering, Digital Art and Animation, Music and Sound Design, and Video Game Design. This institution is worth considering if you want to build a career in the tech field, especially game designs.
2. LIM College, New York, NY
LIM College has the highest employment rate on this list, with 91% of its graduates finding jobs within two years after graduation. The six years median income for alumni is roughly $48,900. The price per year of attending this profit college is very steep at approximately $37,000.
The school focuses solely on programs relating to fashion, such as Fashion Media, Fashion Merchandising and Management, Marketing, International Business, Visual Studies, Marketing, and Management. You want to weigh every possible option before committing to this profit college because many nonprofit schools have significantly lesser costs, higher quality of education, and better campus experience.
3. Stanbridge University, Irvine, CA
Stanbridge has a high graduation rate of 67%, making it one of the profit schools with the highest likelihood of students completing their programs. While many for-profit institutions accept just about any candidate that can afford to pay the rather high tuition and fees, Stanbridge has fairly strict admission criteria, bringing the acceptance rate to about 53%. This for-profit college runs a bachelor’s degree program in nursing and graduate degrees in other fields. About 86% of the graduates usually find gainful employment within two years of graduation.
4. Fashion Institute of Design & Merchandising, Los Angeles, CA
The Fashion Institute of Design & Merchandising (FIDM) is one of the few profit colleges with a strong reputation for high-quality programs in the field of fashion and design. The school offers degree programs in a wide range of fashion and design-related majors, including Apparel Technical Design, Fashion Knitwear Design, Interior Design, Social Media, Digital Media, Graphic Design, Professional Studies, and Business Management.
The fashion school accepts up to 52% of students applying to the college and has one of the highest graduation rates among profit colleges at an impressive 73%. In addition, 88% of graduates find gainful employment within two years of completing their programs.
However, FIDM has one of the highest net costs among profit schools at a staggering $40,622 per year. This can be discouraging, especially when you consider that the six-year median salary for alumni is about $37,200. Any student thinking of getting into FIDM needs to weigh the pros and cons, especially as it relates to the price, to see if it is worth it in the end.
If you live in New York and prefer a traditional college, take the time to consider other nonprofit colleges and programs, such as Parsons – The New School, Otis College of Art and Design, and Fashion Institute of Technology, all of which are well-regarded nonprofit schools.
5. Monroe College, Bronx, NY
Monroe is one of the less expensive profit schools with a net price of $11,261 per year. It has an acceptance rate of about 44%, with 53% of the students successfully completing their programs. There is a wide range of degree programs for students to choose from, including Computer Information Systems, Criminal Justice, Health Services Administration, Nursing, Early Childhood Education, Accounting, Hospitality Management, Sports Management, and more.
An impressive 87% of graduates from the profit school usually find gainful employment within two years of completing their studies. While the net price is significantly lower than most profit schools, the median salary of $30,300 is equally lower than other profit schools on this list.
6. ECPI University, Virginia Beach, VA
With an acceptance rate of 72% and a graduation rate of 47%, ECPI University is among the better for-profit colleges that offer quality education. The price of earning a bachelor’s degree is not too steep, but at $19,799 per year, it is not particularly cheap either. Graduates find employment at an impressive rate of 88% within two years of graduation, and the median salary for alumni is $34,600 after six years of graduation.
ECPI runs undergraduate programs in several campuses in Virginia, North and South Carolina. Distance learning is also offered through the school’s online platform. Some of the programs available are Culinary Arts, Criminal Justice, Business, Health Sciences, Nursing, Engineering Technology, and Information Technology. This school is well-known for its high-quality delivery regarding information technology and culinary arts degree programs. You may want to consider a nonprofit college if your preferred major is outside these two fields.
How Do You Know If a College is For-Profit?
The quickest and surest way to know if a school is a profit institution is to call the admission office or search through the school’s website. Here are some ways to find out the reputation of a for-profit institution:
- Find out the school’s credentials, including licensing and accreditation. These are minimum requirements all institutions of higher education should have. However, keep in mind that licensing and accreditation alone are not enough. After all, ITT Technical Institute and Corinthian College both hand these credentials. If you consider a for-profit institution, it is best to go the extra mile and confirm the school’s standing from the licensing and accrediting agencies.
- Find out if credits from the specific school are accepted in other schools. This is crucial because if you need to transfer to another school for any reason, you want to be sure that the credits you earn will be accepted in other learning institutions.
- To know what to expect from your qualification after graduation, you can request to get in touch with alumni. You will be able to get first-hand information about the prospects of getting a job after completing your program.
Differences Between For-Profit and Not-For-Profit Colleges
The major difference between these two types of schools is obviously in their names. For-profit institutions have owners who expect high returns on their investment. In contrast, nonprofit colleges do not have private owners, so all the money generated from tuition and other avenues goes back into the school’s development.
Here are some specific qualities that differentiate a nonprofit school from a for-profit college:
- Admission requirements: Requirements for getting into for-profit schools are more relaxed. A prospective student needs to meet a set of stricter requirements and prerequisites to be admitted into a nonprofit institution.
- Decision-making authority: Investors and shareholders make up the decision-making body in for-profit schools. On the other hand, the decision-making authority in nonprofit schools is made up of a board of trustees, local communities, faculty, staff, and even student representatives.
- Courses offered: Technical or vocational courses make up a considerable part of the courses available in profit institutions, with professors teaching predetermined curriculums. A nonprofit institution usually offers a wider variety of courses and degree programs from which students can choose. Professors participate in deciding the coursework and classes required for certain programs.
- Sources of money: All monies in a for-profit college are from students’ tuition, while a nonprofit college gets money from multiple sources, including the government, tuition, donations, and endowments.
- What the money is used for: A significant percentage of the money generated in for-profit schools goes to the shareholders or investors, with some going into paying professors and leasing buildings. A nonprofit public institution puts all monies back into developing and maintaining the school’s infrastructure, faculty salaries, faculty and student research, college sports, and other activities.
- Classroom environment: Lectures are usually delivered through online courses or in rented buildings in most for-profit institutions. Students may be asked to supply some equipment and learning materials. Traditional nonprofit schools have brick-and-mortar buildings, including classrooms, dorms, laboratories, libraries, and more. Even in distance learning situations, nonprofit online colleges usually provide up-to-date learning tools such as computers and scientific equipment.
- The goal: The focus of for-profit schools is to make money and see continuous growth in the bottom line. Nonprofit institutions concentrate on delivering a better education.
How Does the Cost of a For-Profit College Compare to a Not-For-Profit Institution?
The cost of getting educated in a for-profit college is generally higher than a nonprofit institution. This does not apply only to tuition but to other expenses, such as boarding fees and books. Nonprofit colleges receive funding from state and federal sources, making their fees more affordable.
When looking at the cost of for-profit schools, it is best to look beyond the sticker prices advertised in magazines. The actual cost you need to pay attention to is the net price, which is the cost of getting educated after grants and scholarships.
The average price of tuition between 2017 and 2018 for full-time undergraduate degree programs in four-year for-profit schools was approximately $17,000. In those same years, the same four-year degree program cost about $9,000 on average.
The high cost of education in for-profit schools increases the likelihood of students graduating with a higher student loan. In 2016, about 80% of graduates from for-profit colleges took out a student loan, and in 2019, the average student debt was 39,900 for graduates of for-profit schools.
If you are looking for education at an overall lower cost, you should definitely consider a nonprofit institution. You are likely to complete your higher education with a considerably lower student loan debt.
However, enrolling in a degree-awarding college should not be based solely on lower tuition and general cost. You need to consider whether the school can provide a rich educational experience (which some for-profit institutions do very well).
How Employers Perceive For-Profit Online Degrees
Every student would want to know if an online degree from a for-profit institution can go toe-to-toe with degrees from other traditional colleges. First of all, it is important to understand, and online degrees are gaining significant traction, especially those earned from reputable nonprofit institutions that also run brick-and-mortar campuses. But how do recruiting experts view online degrees from for-profit schools, especially considering the fact that some of these schools operate only on the internet?
Employers have high regard for degrees from nonselective public colleges than online degrees from for-profit schools. In choosing between two equally qualified job seekers, recruiting professionals tend to prefer the candidate with undergraduate education at a nonprofit institution over the one with an online bachelor’s degree from a for-profit college.
However, it is important to note that many employers simply dismiss a candidate simply because their online degree is from a for-profit school. Many organizations looking for the best graduates often keep an eye out for individuals who have received an excellent education (usually obtainable in some private schools and for-profit institutions).
Besides, graduates from for-profit institutions can rest assured if their for-profit school receives grants federal aid because the institution must have passed the gainful employment rule. Since many for-profit institutions are career schools or have lots of trade training programs, they often seek access to federal aid. To qualify for this aid, the school must follow the gainful employment regulation.
Benefits of Attending a For-Profit College
Regardless of the generally high costs and some scandals, many students prefer for-profit schools over nonprofit colleges. Indeed, aggressive marketing campaigns play a big role in this. Still, there are some undeniable values in what these profit institutions have to offer, which is the main reason for the continued increase in enrolment rates.
Thankfully, federal student loans are not exclusively for the student in a traditional nonprofit college. Any student interested in a for-profit school can apply for financial aid and successfully get through undergraduate and graduate programs.
For-Profit Colleges Meet a Demand
There is no arguing the fact that four-year nonprofit community colleges are more affordable than profit colleges. However, this low cost of education has some major drawbacks. First, funding can be a challenge, and secondly, there is general overcrowding. Students in many community colleges can’t even get into classes due to overpopulation. In some cases, it can be an uphill task to get the attention of instructors.
Despite the high cost of education in profit colleges, it tends to be a more attractive alternative to many students who are uncomfortable with nonprofit, overcrowded community schools. This is particularly the case with non-traditional students who want the best learning opportunities, expanding their professional options.
Profit Institutions Offer Flexible Course Schedules
For-profit colleges offer some of the most flexible courses available in higher education programs. Although some nonprofit institutions are beginning to offer more online courses, profit colleges are still far ahead of them.
Online course schedules allow students to complete their programs at their own pace from just about anywhere across the globe. This is especially convenient for non-traditional students and busy professionals who want to go back to school for their bachelor’s degree.
It can be very challenging trying to combine the demands of enrolling in a traditional college with work and personal commitments. A nonprofit school might be the best option for such candidates. They can study right from the comfort of their homes without having to attend a brick-and-mortar class.
Little to No Entrance Requirements
Most traditional colleges have strict entrance requirements, regardless of the age of prospective students. For example, a 30-year old non-traditional student still needs to take the SAT or ACT in addition to a certain high school GPA to be admitted for a bachelor’s degree program in a public college or nonprofit school.
That is not the case for most profit institutions offering higher education. A typical for-profit college waives most of these requirements. Any prospective student with a GED or high school diploma and a strong desire to succeed can be admitted.
Non-traditional students who do not wish to take the SAT or ACT or who did not do well back in high school would have missed out on furthering their education without profit colleges. Over the years, for-profit schools have helped millions of individuals pursue and earn qualifications that improved their careers.
The typical non-traditional student does not want to go back to school to get a bachelor’s degree in general education. Instead, his or her focus is on obtaining an education relevant to their present or future career. Nonprofit schools have concentrations that churn out plenty of business people, doctors, teachers, lawyers, and more. However, an adult student with a job and family is likely trying to get back to college to get the necessary training in technical fields that might not exist in a traditional nonprofit college.
What Types of Degrees Can You Earn at a For-Profit College?
Like any traditional college, profit institutions offer a combination of two- and four-year in-person and online programs that lead to awards of associates degrees, bachelor’s degrees, and master’s degrees. Some profit colleges even offer certificate programs.
Students can access federal loans or grants through the many financial aid opportunities since many of these for-profit schools participate in several federal funding schemes. Even veterans who want to go back to college to obtain a bachelor’s degree in their preferred field can benefit from the GI bill to pay for tuition and training programs in any profit schools.
Undergraduate college students can also apply for student aid via the federal Pell grant, as long as they can show that they have an exceptional financial need.
Risks of Attending a For-Profit College
There seems to be no shortage of for-profit colleges. Unfortunately, many of these schools are bedeviled with controversies. They have been criticized for misleading marketing and aggressive recruiting.
Although there is nothing inherently wrong with high acceptance rates, deceptively targeting veterans and low-income students simply because they might be eligible for federal financial aid is something to be concerned about.
What are the Main Risks Associated with For-Profit Colleges?
One of the major risks associated with for-profit colleges graduating with staggering student loan debts. The tuition is generally very high, meaning more students are likely to get into debt. It is even worse when some of these institutions push for private loans not covered by federal financial aid.
To compound things further, many students in for-profit schools tend to belong to certain vulnerable demographics, such as military veterans, minorities and people of color, and low-income students, particularly women with many dependents. With some of the schools accused of offering poor-quality programs (prioritizing profits over education), the certificates and diplomas awarded in many of these institutions are less valued in the job market.
Also, there is a high chance that many students won’t graduate due to the high cost of tuition and other fees. Unfortunately, many nonprofit schools do not accept credits earned in for-profit colleges, a fact that some for-profit institutions cover-up during the enrollment process. Those who manage to graduate may find it difficult to find good jobs in time to make up for all the debts incurred during schooling.
Student loan defaults are another risk prospective for-profit students should consider. Many people fail to repay their loans even long after graduating from for-profit schools. The rate of student loan borrowers from for-profit schools who default in paying back their student loans is about twice that of their counterparts from nonprofit institutions.
What Happens to Your Course Credits if Your For-Profit College Closes?
Perhaps the biggest risk in attending a for-profit college is that the owners of the institution can declare bankruptcy or lose a legal battle and close down the school. This is particularly damaging to students if the closure happens in the middle of a semester. It can be especially traumatizing for students who have only a few more months to graduate.
If your school suddenly closes, here are a few things that might likely happen:
- Your credits might be accepted in another institution that has entered a teach-out agreement with your former school. A teach-out agreement simply means that another school has agreed to enroll students from a closed school to help them complete their programs. Seizing the chance to get into a teach-out program allows you to keep your earned credits, but any student loans won’t be forgiven.
- Automatic cancellation of federal student loan provided you do not enroll in another program (including a teach-out) that uses federal financial aid. If you must enroll in a new school, you will need to wait for another three years.
Many for-profit institutions may have had some bad reputation over the years, but that doesn’t mean you can’t find a few good options that are doing their best to deliver good-quality education.