Guide to For-Profit Colleges: What You Need to Know

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Finding the right online college is a big decision, and most of the time, for-profit online colleges are competing for you as a prospective student. "What are for-profit colleges?" and "Why attend a for-profit college?" may be questions you need answered. Here's what we know about for-profit online colleges.

Though they sometimes get a bad rap, for-profit colleges are not intrinsically bad, and can be the right fit for some students. If you make an informed, well-researched decision to attend a for-profit college or university, it can indeed be a smart step in your pursuit of a degree, and a career change.

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In this guide, we will answer commonly asked questions about for-profit colleges and help you decide if a for-profit college is right for you.

What is a for-profit college?

For-profit colleges are institutions of higher education owned and operated by private, profit-seeking businesses. For-profit colleges and universities can be controversial. The less reputable for-profit schools often make headlines for their high rates of debt creation or for promising students a career-advancing education that falls flat. This bad news often overshadows some of the unique benefits that for-profit colleges can offer. Here, we'll provide an honest look at these benefits.

The key to a successful experience in a for-profit college is making thoughtful and well-informed decisions about where to pursue your degree and how to spend your money.

There are for-profit schools that will encourage you to enroll quickly, rack up lots of debt, and turn you out a few years later with a degree that places you no closer to your career goals. But there are also for-profit colleges that will offer you an accessible, flexible degree program that will equip you with marketable skills and support you as you transition from college to career. The key is being able to tell the difference, and this guide is intended to help you learn the pros, cons, similarities, and differences between college options so that you can choose the school that best suits your needs and goals.

What is the difference between for-profit and non-profit colleges?

Though there may be other differences, the main difference between a for-profit and non-profit college is that non-profits are not owned by an individual or group of shareholders, and any profits made by a non-profit school or organization must be reinvested back into or held by the organization itself. This difference in who “owns” the school does have an effect on who’s making decisions as well as on their underlying motivations.

In a for-profit school, the shareholders are the ultimate decision makers, while a non-profit school is governed by a board of directors. What this means for students varies from school-to-school, and it’s worth researching the leadership, reputation, and track record at any school you’re interested in attending — for-profit or non-profit.

Let's be clear about one thing: most businesses in the US are for-profit businesses. So why is it worrisome for a university to be for-profit? The bad schools show us why. They're profit driven and see students' livelihoods as merely a means to their bettered bottom line. But, just as it's known that some car dealerships are shady and scandalous, and others aren't, so it is with for-profit colleges.

Are for-profit schools accredited?

The short answer is: yes and no. Some for-profit colleges are accredited and others are not. There are two types of institutional accreditation: national accreditation and regional accreditation. Valid accreditation agencies are recognized by both the U.S. Department of Education and the Council for Higher Education Accreditation (CHEA). Only colleges and universities which have been accredited by recognized agencies may accept finanical aid in the form of student loans and Pell Grants. This makes accreditation very important.

Regional accreditation is often viewed as more rigorous and is generally awarded to schools with an academic focus. National accreditation is often given to schools with a focus on professional development, technical skills, or religious education. National accreditation is also popular among online colleges that operate in multiple states because, unlike regional accreditation, it is not bound to any specific geographical area.

Though for-profit colleges hold varying types of accreditation, most are nationally accredited. Regionally accredited schools are known for offering a comprehensive education and these schools typically allow easy transfer of college credits between regionally accredited schools. By contrast, because nationally accredited schools are often focused on preparing students for specific skilled trades and careers, they may award credits that are less likely to transfer to a regionally accredited school.

You can use the US Department of Education’s College Navigator tool to see which schools are accredited, and by whom. You can also find information about each school’s accrediting agency on its individual profile page. This will also include dates of accreditation and current accreditation status. Before you committ to any college or university, find out more about its accreditation status and what that means for you, your degree program, your ability to recieve student loans or grants, and your future career.

Learn more about the difference between regional and national accreditation, and what it means to attend an accredited college or university.

The Benefits of For-Profit College

For-profit colleges can fill a needed gap in our higher education system, offering accessible and career-focused degree and certificate programs for students who may not have other ways to access these opportunities.

Acceptance Rates

For-profit colleges often have higher acceptance rates than their non-profit counterparts. Many for-profit schools have an open admissions policy, meaning that they admit all who apply and meet specific, noncompetitive criteria, regardless of grades, test scores, etc. Typically schools with open enrollment only require that applicants have a high school diploma or GED certificate. For students who might struggle to gain admission to schools with competitive admissions requirements, a for-profit college might provide an open door that leads to further academic and career success.

Flexibility

Attending college at a for-profit institution can also mean increased flexibility for you as a student. Many for-profit schools offer rolling admissions so that you can begin working towards your degree or certificate at any time. Additionally, many for-profit schools have robust online offerings, making it possible to earn your degree from the comfort of your home, office, or anywhere else in the world where you can access the internet.

Career Skills and Certifications

Certification programs and trade schools are often overlooked, but this is where many for-profits stand out. If you are looking to earn a certificate or degree specific to a trade or skill, a for-profit school may have what you’re looking for. In fields like culinary arts, computer science, and cosmetology, for-profit colleges are frequently designed to deliver the necessary skills and certifications to set you up for professional success in your chosen field without time-consuming academic prerequisites or electives.

Take a look at a few of the professions where a degree from a professionally-focused for-profit college or university might be a good starting point:

The Risks of For-Profit Colleges

Before you consider a degree program from a for-profit college, it is important to consider the potential risks. For-profit colleges are often the subject of criticism. Some of the issues cited below help to explain why. An understanding of these issues can help you choose a school and degree program that serves your needs and your best interests.

Price

For-profit colleges are often more expensive than their non-profit counterparts. In a 2018 study by Student Loan Hero, for-profit schools, on average, charged nearly double the tuition rates of non-profit, public schools: $647 per credit hour compared to $325.

If you’re looking for the most affordable education, a for-profit school may not be the best fit. This is especially true if this for-profit schools is not accredited by a Department of Education-recognized agency, which would prevent you from receiving student loans or grants. In general, for-profit schools are often known for producing students with higher than average rates of student loan debt. If you plan to take out student loans, do your research, and be sure to do so in a way that is smart and sustainable. To learn more about student loans, visit The Student Financial Aid Source.

Reputation

The reputation of any school you attend is another key element to consider. The way that people in your specific field view the school from which you’ve obtained a degree or certification will impact your job candidacy, opportunities for advancement, and earning potential. Sometimes, a degree from a for-profit school is thought of as less-than a degree from a non-profit institution. Before getting a degree or certification from a particular school, it can be good to ask other professionals in the field what they think or know about the school you’re interested in.

It’s worth noting that the broader public reputation of a for-profit school doesn’t necessarily dictate its value to you and your professional goals. Reputation varies by industry, field, and sector. You might be able to learn a lot more about your prospective school and degree program from people in your field than from a bevy of negative online reviews. On the other hand, if a background check reveals scandal, corruption and a history of duplicitous practices, stay away!

For-Profit College vs. Diploma Mill

Disreputable for-profit colleges are sometimes labeled “degree mills” or “diploma mills,” implying that these schools churn out one-size-fits-all degrees with little concern for individual students. This critique also suggests that for-profit colleges are, above all, concerned with profit, even to the detriment of their students. This may be true in some cases. In fact, more than a few for-profit schools have been shut down for unethical behavior. Still, there are for-profit schools that offer accessible, flexible degree programs that serve students and their best interests. Recognizing the differences between a for-profit college and a diploma mill is essential.

Learn how to tell the difference between a legitimate online college and a diploma mill. See what the implosion of a shady for-profit scheme looks like.

A For-Profit College Might Be for You If…

To recap, a for-profit college might be a good fit for you if you meet any or all of the following criteria:

Now that have a better understanding of for-profit schools, conduct your due diligence and make informed decisions. If you’d like to read more about for-profit colleges, take a look at For-Profit vs. Community College: Which One is Right for You? Or check out our rankings — which include only accredited colleges, universities and degree programs — and find the best school for you!

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