For-Profit College vs. Community College: Which One Is Right for You?

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You know those TV commercials where the upbeat young person with great teeth says that just a few clicks can change your life, that a world-class education awaits you at McSpeedy Degree University?

This ad is pushing a for-profit college. Sorry if I just blew your mind a little.

But yeah, that fresh-faced pitch-person who says you’ll take interesting courses, gain marketable skills, and earn a competitive degree rarely ever mentions the enormous price-tag, the paltry graduation rates, or the crippling student debt. In fairness, that’s a lot to fit in a 30-second ad spot.

A for-profit college is a privately-operated business that sells courses, degrees, and certifications. Advocates of for-profit education argue that the imperative to create a competitive business model assures a quality educational product. On the other hand, a ton of statistical evidence (and more than a few high-profile fraud cases) suggest this isn’t always true.

In 2015, the National Center for Education Statistics reported that there were approximately 3,200 for-profit institutions in the US, enrolling roughly three million students.

On the other hand, without the help of nationally ad campaigns, some 1,500 US community colleges enrolled roughly 6.3 million students in fall 2015.

Roughly speaking, this means that nearly ten million Americans each year are working toward an entry-level degree or certification through one of these outlets. If you are among them, you may find yourself confronted with the question: For-profit school or community college?

If so, you could jump to our list of the 50 Best Community Colleges in the United States. If you find one in your community, it’s probably your best bet.

If you’re still on the fence about which way to go, we’ll do our best to help you decide.

It’s no secret that for-profit colleges have a battered reputation. And collectively, they deserve it. But that doesn’t mean it’s always a terrible option. If you’re looking for a point of entry into your college education, for-profit college is one option. So too is community college.

Which is better for you? That actually depends a great deal on what you hope to do with your education, your degree, and your career. Your future academic and professional ambitions should inform your decision. You should understand what differentiates community colleges and for-profit schools. You should also know what differentiates a worthwhile for-profit school from a total ripoff.

Here are a few factors to consider as you make your decision:

Cost

Obviously cost is a big factor. If you’re comparing community colleges to for-profits, it’s not even close. As a matter of fact, while community college is one of the least expensive ways to go, a for-profit college is on the exact opposite end of the spectrum. The average yearly tuition for in-district students at public two-year colleges is roughly $3,400. That’s about as good as it gets. Meanwhile, Franklin University reports that the average yearly tuition at for-profit colleges carries a hulking $31,000 price tag. If cost is your biggest concern, there shouldn’t be much of a dilemma here.
Advantage: Community

Student Loan Debt

Cost and loan repayment are directly connected (obviously). Federal financial aid and student loans fuel the for-profit education sector. While for-profit schools enroll roughly thirteen percent of all college students, they accounted for twenty-five percent of federal aid in 2009. This is more than $20 billion in student loans. Of course, student loans are a huge part of higher education in general, but the for-profit sector stands apart from the crowd when it comes to excessive debt, high default rates, and poor repayment outcomes. According to School Scam Lawyer, thirteen percent of students in community colleges take out student loans, as opposed to a staggering ninety-six percent of for-profit students. This high rate of borrowing, combined with high tuition costs, explains why for-profit graduates account for forty-seven percent of all student loan defaults. One in five of these graduates defaults on their loans, as compared to one in twenty-five from nonprofit schools.
Advantage: Community

Personal Attention

When you pay for an education, you’re also paying for access to an educator. If you’re a student at a big college with large lecture halls and limited office hours, you quickly come to realize how little access that really affords you. This is one area where for-profit colleges do have an advantage. Because the imperative of “customer satisfaction” is a part of the for-profit business model, instructors are more likely to take a customer service approach in dealing with students. A survey by the Kresge Foundation reveals overwhelmingly positive feedback from for-profit students on this subject, with eighty-five percent reporting to intimate class sizes, eighty-seven percent characterizing their instructors as “caring,” and ninety-one percent praising their schools for providing effective guidance. A comparative survey from Public Agenda found that community college students report similar levels of satisfaction. However, cuts to federal funding for community colleges over the last decade have reduced wage growth and paying hours for instructors, a trend which is likely diminishing access to personal attention.
Advantage: For-Profit

Marketable Skills

When it comes to acquiring skills that you can actually use in the real world, there are advantages to both for-profit and community colleges. Community college provides you with a clear path toward an associate degree. Depending on your chosen discipline — medical technician, law enforcement officer, paralegal, web developer, etc. — this is an affordable way to gain some entry-level skills and a legitimate degree. But for many professions — teaching, accounting, engineering, etc. — your associate degree is likely the first step on your way to a bachelor’s or master’s degree. In other words, community college is a powerful way to save time and money in pursuit of a more advanced degree, but on its own, it may limit both your career prospects and earning potential.

For-profit college may differ in this respect because so many degree programs and courses are designed to deliver you directly into the job market. Many for-profit colleges employ skill and competency-based models of education aimed at providing practical job qualifications. This doesn’t mean that every prospective employer will respect a degree from a for-profit institution. Some employers are skeptical of for-profit degrees, especially those from unaccredited or poorly accredited institutions. That said, not every employer cares. Some are more interested in knowing that you have learned and mastered the skill sets required for your job. Many for-profit schools aim to do just that. This means that a well-chosen trade or skills program could at least arm you with the knowledge and ability to begin working immediately upon graduation.
Advantage: For-Profit

Degree Credibility

Of course, your odds of landing a job immediately after graduation are less certain. Easily one of the biggest drawbacks to a for-profit is the reputation it carries. In recent years, a spate of high-profile fraud cases illuminated the flaws in the for-profit model. Among them, for-profits were accused of placing enrollment concerns above educational priorities. The result is often a subpar educational experience and a degree that carries less merit than an equivalent degree from a nonprofit institution.

This has not gone unnoticed by employers. A for-profit degree could put you at a major hiring disadvantage when compared to a degree from a regionally accredited institution. Arne Duncan—Secretary of Education under President Obama—even pointed out in 2014 that 72% of for-profit graduates earned, on average, less than high school dropouts. This is a disturbing statistic, one that underscores the employment challenges you may face as a for-profit degree holder. If you choose the community college alternative, there’s a good chance that you’ll still need to continue into a bachelor’s degree program to improve your job prospects and earning potential. Contrary to many for-profit degrees, however, you should be able to transfer your community college credits to the public or private four-year schools of your choosing.
Advantage: Community

Transferring

Speaking of which, you don’t have to look much further than the admissions office to find out how your average public or private four-year institution feels about for-profit schools. Just ask them whether or not your credits will transfer. If your for-profit lacks regional or program specific accreditation — and it probably does — the answer is almost certainly no.

Whether you’re looking at a community or for-profit college, you’ll need to choose a program that is accredited. Remember though, not all accreditations are created equal. Regional schoolwide accreditations are generally preferable to national schoolwide accreditations. Moreover, even if a for-profit college can boast institutional accreditation, that same school may lack accredited degree programs. This means that you’ll qualify for federal loans, but that your degree and credits won’t transfer to an accredited institution.

This is important if you intend to eventually continue into a public or private four-year school. Before you commit to a for-profit school, find out whether or not your credits will transfer. Otherwise, you could be wasting a whole bunch of time and money. Unfortunately, this is a common occurrence. Transferring for-profit credits can be difficult, if not impossible. By contrast, most community colleges have transfer agreements with numerous public universities, particularly in-state schools. This doesn’t mean transferring credits will be without complications (it’s always something). But ultimately, you’ll have a lot more success coming from a community college, as opposed to a for-profit one.
Advantage: Community College

Certification

Negative statistical evidence abounds regarding for-profit schools, so much so that it often overshadows the inherent value of certain profit-driven trade schools. Depending on your chosen career path, you might benefit more from a certification than a degree. This is often true for students in fields like the culinary arts, computer science, or cosmetology. Becoming a working professional in one of these fields may require basic certification only. Some for-profit schools are designed to deliver the necessary skills and certifications through fast-track programs that accelerate your path from enrollment to employment. In most cases, an equivalent community college program will be more cost effective. But these equivalent programs are not always offered or may not be geographically accessible to you. If so, you may want to attend a reputable trade school. Do your homework and find one with a good track record among former students and employers.
Advantage: For-Profit

Course Offerings

Often, for-profit schools program more nimbly, respond to advances in the field quickly, and offer a wider range of academic subjects. By contrast, many community colleges are impacted by regional realities, the kind that erode budgets, limit course availability, and impinge on the variety of subjects offered. Because for-profit colleges are informed less by curricular norms and more by the imperative to serve customer demand, you likely will find nearly any subject matter you can think of through some for-profit outlet. Note also that the vast majority of degree programs offered by community colleges are two-year associate degrees. On the other hand, for-profit colleges run the gamut of offerings, from certification and associate degrees to bachelor’s and master’s degrees.

Now, that doesn’t always mean you’re getting the most rigorous education or the most reputable degree. Undergraduate and graduate degrees from non-regionally accredited for-profit colleges are rarely held in the same regard as parallel degrees from nonprofit institutions. Still, speaking strictly in terms of variety, for-profits give you plenty of choice, with a wider array of disciplines and degree levels than most community colleges.
Advantage: For-Profit

Graduation Rates

The biggest drawback to the for-profit model: it skews an institution’s priorities. Increased revenue and shareholder payouts drive organizational decisions, which mean factors such as educational rigor, instructor qualifications, and postgraduate outcomes are secondary, at best (fully overlooked, at worst). Graduation rates alone provide a troubling picture of educational outcomes at for-profits. Phoenix University is one of the biggest and most successful of the for-profit models. As per the above discussion on course offerings, Phoenix enjoys success in no small part because its course offerings are so varied and extensive. But that doesn’t mean these offerings always result in the acquisition of a degree. In fact, according to a report from 2010, a full ninety percent of Phoenix students failed to graduate within six years. In spite of the misleading ads and high-pressure sales tactics used to court students, for-profits tend to show far less commitment to helping their students graduate or land gainful employment. Full-time community college students present a much brighter picture, with fifty-seven percent graduation rates. The rate is thirty-nine percent when part-time students are factored in. This means that even for working professionals, parents, and military service people piecing together part-time degrees while balancing other responsibilities, community college produces dramatically better results.

It’s only fair to note that most community colleges do offer two-year programs, whereas the intended length of degree programs is a lot more varied among for-profits. This is a factor in the length of time toward completion but hardly mitigating enough to account for the extremely high rate of noncompletion among for-profit students.
Advantage: Community

Instructional Quality

Another common critique of for-profit college is its nominal commitment to academic excellence. This is an area in which the business imperatives driving for-profit colleges truly differ in priority from traditional colleges and universities. According to Franklin College, in 2009–10, for-profit colleges spent an average of $3,017 per student on instructional cost. According to the Lumina Foundation, public two-year schools spent an average of $9,000 per student on instructional costs in 2011–12. In other words, at a rate of roughly 1/10th the cost, community colleges are seeing about three times the value in curriculum, materials, instructors, and other resources.

Meanwhile, community colleges enjoyed a major enrollment spike between 2007 and 2011. They responded by investing significantly in research, instruction, and student services. The result was a notable improvement in outcomes. In 2013, community colleges awarded seven more degrees or certifications per one hundred students than they did just one decade prior.
Advantage: Community

Accessibility

At the end of the day, the reason that for-profit schools are so popular, in spite of their numerous drawbacks, is their accessibility. There are few academic hurdles to overcome to gain access to the courses and instructors at a for-profit school. And their advocates will argue that far too many aspiring students lack access to certification programs within their communities or localities. As Forbes points out, “just twelve percent of students enrolled in certificate programs would have had access to a similar program at a nonprofit institution where they lived.” For some students, a for-profit institution may be the only way to gain a set of skills, a body of knowledge, or a viable certification needed to advance career prospects. From a standpoint of accessibility, for-profit colleges have the widest open-door policy in the higher education sector.
Advantage: For-Profit

All of this is to say that not every for-profit school is a rip-off. But if you plan to choose a for-profit option, make sure you’re doing it for the right reasons and that you take all necessary precautions as you proceed.

Most importantly, do your research. Google the name of any for-profit school on your list. If you come across headlines that include words like “fraud” or “enrollment scandal,” it’s probably a good idea to stay away. There is no shortage of high-profile stories involving for-profit colleges who’ve run afoul of federal standards. If you look, you’ll find them.

Beyond that, you’ll want to put together a complete picture of any for-profit school on your list. Find out how former students characterize it, how prospective employers perceive it, and its empirical performance measurements such as graduation rates, loan default rates, and postgraduate salaries. This should tell you a lot about the product that you’re getting.

With all of that said, the best advice we can give you, if you are considering a for-profit college, is to first determine if the degree you’re seeking might also be offered by a community college in your vicinity. If so, we’re willing to wager that you can take many of the same introductory-level courses at the community college for a lower cost, along with a much better chance of graduating, transferring, or landing a job.

The 50 Best Community Colleges in the United States is a great place to start your search.

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TheBestSchools.org is an advertising-supported site. Featured programs and school search results are for schools that compensate us. This compensation does not influence our school rankings, resource guides, or other information published on this site.
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