What is a For-Profit College? Should You Attend One?

When most high schoolers think of college admissions, their thoughts turn to public universities like UCLA or the University of Michigan, or to private non-profit institutions such as Stanford and Harvard. 

A third, less-common option for students entering college is for-profit schools such as DeVry University and the University of Phoenix. In 2016, only about 8% of undergraduate students were enrolled in for-profit colleges. 

What exactly is a for-profit college though, and is it right for you? Here’s what you need to know.

What is a For-Profit College?

The goal of for-profit colleges is to make money while also providing a quality education to students. An easy easy way to conceptualize for-profit colleges is to think of them as businesses. The product produced by these businesses is education and the school’s goal is to sell their education to would-be students. 

The money made at a for-profit college can end up reinvested in the school, but it can also be paid out to investors or shareholders of the institution. Conversely, at public and non-profit colleges, revenue is reinvested in the school. 

Pros and Cons of For-Profit Colleges

Most college-bound high school seniors are dubious of for-profit colleges (and in many cases, their suspicion is warranted). Although for-profit colleges hold less appeal for college-bound high schoolers, they are a popular educational choice among many groups, namely, non-traditional students who are older, female, non-White, low-income, or haven’t graduated high school. 

A quick Google search will turn up numerous articles highlighting the reasons to be wary of for-profit colleges (there are also some great for-profit schools) that offer specialized training and opportunities to underserved groups. The key to choosing a for-profit college is like any other college decision: to get the most out of your investment, the school must meet your educational goals and deliver your desired outcome.

Below are some pros and cons of for-profit colleges to help you decide if a for-profit college is right for you. 

Pros of For-Profit Colleges

Higher Acceptance Rates: For-profit colleges typically have higher acceptance rates than non-profit colleges and universities. Many for-profit schools have open admissions policies, meaning they admit all applicants without consideration of their grades, test scores, extracurricular activities, or background. It’s common for the only requirement for enrollment in a for-profit college to be a high school diploma or GED. According to the National Center for Education Statistics (NCES), in 2011, 75% of first-time college students entering for-profit colleges possessed a high school diploma. For comparison, in the same year, 96% of first-time college students at public four-year colleges had a high school diploma. Consequently, for-profit schools are popular with students who might have difficulty gaining admission to more competitive colleges. 

More Flexibility: A large percentage of for-profit colleges have rolling admissions, along with a robust offering of night and online classes. The schedule flexibility of these schools makes it easier for students to balance a career or children while taking classes, and is another reason for their popularity with non-traditional students. For example, more than 80% of students enrolled at for-profit colleges are older than 24, and 45% of all for-profit students are students with children (39% are single mothers).

Got at Your Own Pace: One of the major benefits of for-profit colleges is that students can work at their own pace—completing their degree as quickly or slowly as comfortable. For those trying to complete their degree expediently, the multitude of online classes offered by for-profit colleges is extremely beneficial. It’s worth noting that while it’s possible to achieve a degree at for-profit colleges quickly, it’s rarely the case. Stats from the NCES show that the six-year graduation rate for students starting college in 2011 was significantly higher for students attending public and private non-profit institutions (60% at public institutions, 66% at private nonprofit institutions, and 21% at private for-profit institutions).

Vocational and Skill-Based Training: Many for-profit colleges forgo the board-based education taught at traditional colleges and universities, instead choosing to focus on specific trades or skills. This allows students to move more quickly through profession-oriented programs, as they eliminate the need to take prerequisites and electives. Career-based training is especially popular in fields such as computer science, information technology, industrial design, medical and dental assistance, and culinary arts. 

Cons of For-Profit Colleges

Higher Price: For-profit colleges are simply more expensive than their non-profit counterparts. According to ProPublica, the cost of a two-year associate’s degree at a for-profit college is $35,000 compared against an average cost of $8,300 at a community college. Similarly, the expense of a four-year degree at a for-profit college is $63,000, more than $10,000 extra than the average cost of $52,500 for a four-year degree at a flagship state university. Another interesting way to view the expense of for-profit colleges comes from Student Loan Hero, which breaks down the cost per credit. Four-year for-profit colleges cost $647 per credit hour, compared to $325 per credit hour at four-year public colleges. 

Less Supportive: Unlike the college campuses of traditional colleges that are populated with tutoring services, academic clubs, and professors with office hours, the online offerings of for-profit colleges make it difficult for students to build relationships with their teachers and receive needed support. The result? Students at for-profit colleges graduate at a significantly lower rate than their peers at traditional colleges—as mentioned previously, only 21% of enrolled students at for-profit colleges earned a four-year degree within six years. 

Less Reputable: There’s a reason so many students apply to schools like Harvard and Stanford: a degree from those esteemed institutions is seen as a key to opening up doors to a variety of fields. Conversely, degrees from some for-profit colleges can seem underwhelming to employers. There is also a chance that your degree or certificate from a for-profit college will not be accepted or will be looked down on by an employer. Before enrolling, talk to professionals in your field of interest to get a sense of its reputation and ensure it aligns with your goals. 

More Debt: Students graduating from for-profit colleges in general graduate with more debt than their peers leaving public and non-profit institutions. There are numerous reasons for this—as noted above, they’re more expensive and have lower graduation rates, which result in accumulated debt. Students with degrees from for-profit colleges also earn less on average than those with a degree from public and non-profit schools. A study from the National Bureau of Economic Research found that certificate-seeking students in for-profit institutions have 11% lower earnings after attendance than students in public institutions. Furthermore, students who graduate four-year public colleges ($42,400) outearn those who attend four-year for-profit colleges ($38,700).

Is Attending a For-Profit College Right for You?

Now that you can assess the pros and cons of for-profit colleges, the question remains: is a for-profit college right for you? In some cases, the answer is yes.   

For some students who will have difficulty gaining admission into more competitive traditional colleges because of grades, test scores, or other circumstances, for-profit colleges provide an opportunity to pursue higher education. Similarly, those with schedule restrictions also benefit from the robust offerings and flexible schedule provided by for-profit colleges. 

For-profit colleges are also a good option for students looking to enter a particular trade or field. These schools offer the necessary certifications and skills to gain entry to careers in the culinary arts, cosmetology, and even medical fields without having to take time-consuming and expensive unrelated coursework. 

That said, if you have the opportunity to attend a non-profit college, your career prospects and future earnings will likely be better. You will also have more support during college, are more likely to graduate, and often will have less debt. In most cases, students are better off attending a traditional college.

Choosing a For-Profit College

If a for-profit college is on your radar, there are a few steps you can take to ensure you end up at a reputable institution. First off, search the school’s scorecard provided by the U.S. Department of Education website to learn basic facts about the school such as graduation rate, salary after completion, and annual cost. Because for-profit colleges are businesses, researching them on the Better Business Bureau is also a good idea before registering for any classes. 

Our free chancing engine is a powerful data-driven tool that takes into account criteria such as grades, test scores, and extracurricular activities to predict your odds of admission at over 500 colleges and universities; however, it doesn’t include any for-profit colleges due to their tendency for open admissions policies. To learn more about your chances at traditional non-profit schools and what you can do to improve them, sign up for your free CollegeVine account today!