What are For-Profit Colleges vs Nonprofit Colleges?

For-profit and nonprofit colleges can differ in affordability, admissions, program offerings, and accreditation.

According to the National Association for College Admission Counseling, state schools and community colleges are public institutions, in contrast to privately owned schools. For-profit colleges are also owned by private companies and businesses.

Unlike their nonprofit counterparts, for-profit institutions focus mainly on earning revenue through tuition and fees paid by students. For-profit colleges channel earned revenue into non-education expenses or directly to investors.

For-profit colleges usually offer career-oriented training programs. They often deliver programs in an online format. These programs can be a good educational option for individuals with busy schedules who are returning to school or seeking career advancement. However, some for-profit colleges are scams, so it's important to do thorough research before enrolling in one.

When choosing between a for-profit college and a nonprofit institution, students should consider expenses, program offerings, and professional goals. Additional considerations include transfer options and reputability.

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What Is a For-Profit College?

A for-profit college is a college owned and operated by a private company or business. They are often managed by investors and stakeholders and they generate revenue that is used for non-educational purposes.

For-profit institutions usually don't receive state or federal aid. Money made by for-profit colleges mostly comes from tuition and fees. They usually offer career-based and occupational training programs, often through online formats for nontraditional learners.

Because profits from for-profit colleges are used for non-educational purposes, some employers and nonprofit institutions regard them as less reputable. However, some for-profit colleges have accreditation, and these schools are valid educational options.

What Is a Nonprofit College?

Nonprofit colleges are schools that channel funds from tuition and fees into educational programs. They also receive support from state and federal governments, endowments, and donations.

Public and private institutions can both be nonprofit entities. Nonprofit schools spend more money on instruction, curricula development, and recruitment than their for-profit counterparts.

Nonprofit institutions offer certificates and degrees that lead to careers and continuing education opportunities. Many employers regard degrees from nonprofit schools as more reputable due to the funding that these institutions invest into high-quality educational programs.

What's the Difference Between a For-Profit College and Nonprofit College?

For-profit colleges and nonprofit institutions meet different needs for different learners. Individuals should research the programs and courses that align with their personal and professional goals.

Affordability and transfer options factor heavily into choosing between for-profit and nonprofit schools. Some individuals want a more traditional college experience, while others are fine with a different approach. In both cases, students should always check accreditation status.

Purpose

For-profit and nonprofit colleges differ in purpose and deliver different learner outcomes. For-profit schools typically offer career-oriented programs. They're often focused on making college accessible, but they also emphasize earning revenue over student learning outcomes. Some for-profit schools offer relatively cheap tuition, but not always.

Nonprofit colleges and universities help students explore opportunities by offering a broad, liberal arts education. These institutions also foster community while supporting learners, faculty, and staff in their academic and professional endeavors.

How They're Funded

For-profit colleges are mostly funded through student tuition and fees, along with money from investors, corporate entities, and subsidiary businesses. To grow enrollment, for-profit schools use their earnings to advertise their programs and recruit students.

Public nonprofit institutions receive significant financial support from state and federal government bodies, while private nonprofit schools are often funded through private endowments or grants. Tuition and fees also contribute to revenue.

Affordability for Students

Generally, for-profit colleges provide online programs with comparable or higher price tags than programs at nonprofit institutions. This becomes especially clear when comparing for-profit college costs with in-state tuition for public schools.

For-profit schools rely on tuition, fees, and donations for funding, which can lead to higher costs, but many charge similar rates for books and course materials as nonprofit institutions. For-profit schools also offer scholarships and tuition discounts, and students can apply for federal financial aid, so long as the school is accredited.

Programs and Courses

Academic programs and courses vary by institution, but for-profit and nonprofit schools share some similarities. Many for-profit schools offer professional and career-focused programs, as do their nonprofit counterparts. For example, nursing, business, and psychology degrees all appear at both for-profit and nonprofit schools.

For-profit schools generally hold national accreditation, though some receive regional accreditation. Accreditation status affects transfer options, financial aid opportunities, and overall reputability. Even if a program at a for-profit college offers the same coursework as nonprofit schools, students should always check accreditation status.

Admission Process

For-profit colleges usually have less rigorous admission standards than nonprofit schools. Many for-profit colleges require a high school diploma or equivalent and a completed application, with no GPA or standardized test score requirements. For-profit institutions typically offer rolling or open enrollment as well.

Unlike nonprofit schools, which generally admit students 2-3 times a year, for-profit institutions enroll learners all year long. High acceptance rates and flexible admission options can make for-profit schools a more accessible option for many learners.

Transfer Opportunities

For-profit schools have limited transfer options. These colleges may accept transfer credits from other institutions, but most two- and four-year institutions do not accept transfer credits from for-profit institutions.

However, most for-profit schools enthusiastically accept students transferring from nonprofit institutions. Learners who need just a few credits to complete their degrees or who want to shift to more career-oriented programs can sometimes benefit from transfer policies at for-profit schools.

Course Scheduling

Nonprofit schools typically offer classes on a semester or trimester format. Some provide online coursework across eight- and 15-week periods. By contrast, for-profit schools offer almost exclusively online programs and classes, often starting at any time.

This allows for-profit college learners to take courses on a more flexible timeline. Learners who work full time can take 1-2 classes at a time. Many for-profit schools offer accelerated pathways, along with opportunities for asynchronous classes, allowing enrollees to complete coursework with more flexibility.

Changing Your Major

Nonprofit schools do not require students to have a major to apply, but many have additional admission requirements for individuals declaring their majors. Students may need to apply for admission to specific programs or departments.

By contrast, for-profit schools usually offer degrees for individuals who know what they want to study. Because many for-profit colleges provide programs geared toward particular careers, students can readily apply to the program that matches their needs.

Recognizability

Many people are skeptical of for-profit schools, but their names are often well known. Employers typically hold nonprofit colleges and universities in higher regard. Nonprofit schools also do not recognize degrees from for-profit colleges, due to the differing levels of academic rigor, so they don't accept transfer credits from those programs.

There are some fields where specific for-profit schools are held in high esteem. Specific trades, professions, and industries — like mechanic or massage therapist — may prefer individuals with credentials from for-profit programs over applicants from nonprofit institutions.

Campus Life and Student Activities

For-profit schools offer a less traditional college experience. Many enrollees work full time and never visit campus, leading to fewer opportunities for involvement in student organizations, career fairs, and social events.

Without things like student unions, green spaces, and football games on the weekends, for-profit schools may not meet the needs of students interested in a traditional college experience. For-profit colleges often have limited on-campus housing, with even fewer chances for learners to join sororities, fraternities, and teams.

Students enrolled at for-profit schools still receive support and can participate in online activities. The increasingly online world allows for active engagement among for-profit learners and their instructors.

Which Types of Schools Are For-Profit and Nonprofit?

Prospective enrollees should familiarize themselves with common for-profit and nonprofit designations. Here are a few types of schools in each category.

Choosing Whether a For-Profit or Nonprofit College Is Right for You

A nonprofit college or university is the best degree option for most students in most fields. For-profit institutions can provide programs that meet the needs of students pursing specific careers, but often without fulfilling other elements of the traditional college experience.

Remember that for-profit colleges often value their bottom line over instruction, curricula, and learning outcomes. However, for-profit schools can also offer positives, such as open admission, flexible schedules, and general convenience.

Among for-profit colleges, learners should be especially careful about "diploma mills." These are for-profit schools that offer programs with no clear academic standards. Often, students don't even need to take classes — they simply pay a fee and receive a degree. Earning a degree from one of these "schools" can lead to a lot of problems for students.

To avoid falling victim to a diploma mill, students should make sure the school has a physical address, research information about classes and instructors, confirm accreditation status, and explore admission standards.