For-Profit vs. Non-Profit Institutions

Some colleges and universities are public, while others are private. Private institutions can either be for-profit and non-profit, and which one you attend can have a substantial impact on your learning experience and career.

In this post, we’ll talk about for-profit and non-profit types of schools.

Knowing the most important differences between these school types allows you to choose the right postsecondary institution for you based on your academic and professional goals.

What are Non-Profit Colleges?

Non-profit institutions do not distribute money to individuals as profits. The money they get from tuition and fees as well as endowments and from the government (if public) are used for improving the quality of education they provide. In most instances, non-profit colleges and universities offer more degree programs than for-profit ones.

Before anything else, let’s get this matter out of the way: many private institutions of higher education are non-profit schools, and all public colleges and universities in the US are non-profit, too.

The main difference between private and public non-profits is where they get their money to operate — private schools get theirs from tuition and fees and donations, while public schools get theirs from the government.

Non-profit colleges are usually regionally accredited, which is more prestigious than regional accreditation. In terms of programs, the vast majority of them offer four-year and graduate degrees.

Best Non-Profit Institutions and Their US News Rankings

• Brown University – #9 in National Universities
• California Institute of Technology – #7 in National Universities
• Columbia University – #12 in National Universities
• Cornell University – #12 in National Universities
• Duke University – #7 in National Universities
• Harvard University – #3 in National Universities
• Johns Hopkins University – #9 in National Universities
• Massachusetts Institute of Technology – #2 in National Universities
• Northwestern University – #9 in National Universities
• Princeton University – #1 in National Universities
• Rice University – #1 in National Universities
• Stanford University – #3 in National Universities
• Yale University – #5 in National Universities
• University of California, Berkeley – #15 in National Universities
• University of California, Los Angeles – #15 in National Universities
• University of Chicago – #12 in National Universities
• University of Pennsylvania – #6 in National Universities

What are For-Profit Colleges?

For-profit institutions tend to focus more on their owners, which are private companies or businesses, earning revenues by means of tuition and fees and, in some instances, even money from investors. As a result of such, it’s quite often that the quality of education and programs offered as well as student support is compromised.

All for-profit institutions are private institutions. Similarly, many of them are trade, vocation and career schools. Numerous for-profits offer online programs, although a lot of non-profit schools these days offer online learning options, too.

Generally speaking, for-profit colleges and universities have a poor reputation, but many of them are actually legit.

For-profits are usually designed for adult learners and non-traditional students, mostly allowing them to earn transferable skills at schedules that are flexible and thus suit their lifestyle and learning requirements.

Best For-Profit Institutions and Their US News Rankings

• Academy of Art University – #105 to 115 in Regional Universities West
• Bay State College – #41 to 44 in Regional Colleges North
• Berkeley College New York – #36 in Regional Colleges North
• College of Westchester – #33 in Regional Colleges North
• Colorado Technical University – #395 to 435 in National Universities
• DeVry University – #149 to 164 in Regional Universities Midwest
• ECPI University – #110 in Regional Universities South
• Fashion Institute of Design & Merchandising – #6 in 103 Regional Colleges West
• Grand Canyon University – #395 to 435 in National Universities
• Monroe College – #64 in Regional Universities North
• NewSchool of Architecture Design – #91 in Regional Universities West
• Post University – #151 to 167 in Regional Universities North
• Rocky Mountain College of Art and Design – #91 in Regional Universities West
• School of Visual Arts – #104 in Regional Universities North
• Stanbridge University – #141 in Occupational Therapy
• University of Advancing Technology – #27 in Regional Colleges West
• University of Phoenix – #89 in Health Care Management
• West Coast University – #623 in Nursing

Non-Profit vs. For-Profits Schools: Key Differences

The main difference between non-profit and for-profit institutions is where tuition and fees paid by students end up — back to the school for the improvement of educational offerings and facilities at non-profits and in the pockets of the owners of for-profits. However, there are other things that also set non-profit and for-profit schools apart.

Below is a table that compares non-profit and for-profit institutions according to certain data points:

	Non-Profits	For-Profits
Accreditation	Mostly regional	Mostly national
Programs	Usually four-year degrees	Usually online and technical
Schedule	Less flexible	More flexible
Tuition (average)	$38,768	$17,825
Acceptance rate	Usually lower	Usually higher
Retention rate	Usually higher	Usually lower
Graduation rate	Higher (76%)	Lower (35.3%)
Earnings	Usually higher	Lower by 11%
Educational debt	Usually higher	Usually lower

A Word on Scholarships

Many for-profit colleges and universities have scholarship programs. However, those that are not accredited by an accreditor that the US Department of Education recognizes are ineligible to receive aid from the federal government. As such, most for-profit school students rely on institutional and external scholarships to be able to pay for college.

Are For-Profit Colleges Bad?

Many people frown upon for-profit institutions for having a negative reputation — they are notorious for providing low-quality education as their owners are mostly known for being more concerned with raking in profits. Many for-profits are also online and trade schools, some of which with no or phony accreditation, thus making their programs questionable.

At the sight of “for-profit” on the profile or description of an academic institution, many parents and students run as far away as possible from the said school given the stigma attached to for-profit schools.

But it’s important to point out that a lot of for-profit colleges and universities are legit schools.

Many of them are accredited, too, although it’s true that the majority of for-profits have national accreditation, which is considered less prestigious than regional accreditation. Also a downside to being nationally accredited is that credits earned by students are unlikely to transfer with them to regionally accredited institutions.

However, it’s not the fault of many for-profit institutions of higher education for having national accreditation since such a type of accreditation is for trade, vocation, career or online schools, and many of them are these kinds of institutions.

And speaking of which, let’s proceed to this very important topic about for-profits:

How to Check for Accreditation

Checking whether or not a for-profit school is accredited is the single most important step to saving yourself from ending up going to a fake school and earning a bogus diploma or degree that’s totally useless. Fortunately, it isn’t that difficult to determine if the for-profit institution you are considering applying to is accredited by a recognized accrediting agency.

Here are the steps on how to check for a for-profit school’s accreditation:

• Visit the institution’s website
• Check which organization has accredited it
• Access the accreditor’s website
• See if the school is included in the list of member institutions
• Head to the website of the Council for Higher Education Accreditation (CHEA)
• Check if the accrediting agency is recognized by it

It’s worth noting that some for-profit colleges and universities (and even non-profit ones) may have no accreditation and still offer legit programs. However, there are disadvantages to attending them such as:

• Disqualification for federal financial aid participation
• Inability to transfer credits earned to other institutions
• Ineligibility to apply to graduate schools
• Ineligibility to apply for professional certifications or license
• Some employers may not respect conferred diploma or degree

How Can You Tell If a For-Profit School is a Scam?

Phony for-profit schools are diploma mills that confer diplomas and degrees that many employers and all graduate schools do not accept. Most of the time, they are not accredited by recognized accrediting agencies. Many of them also guarantee earning a degree quickly and without working hard for it as well as getting employed and making tons of money.