Choosing Between a Nonprofit and For-Profit School


A group of students doing research on the steps of a nonprofit school.Deciding which college you’re going to attend is one of the most important decisions you’ll make, so be sure to do your research. There’s a lot to contend with. You have to decide if you want to be one of 2,000 students or one of 20,000, if you want to have a research-focused education or a liberal arts one, and if you want to live on an urban or rural campus. Don’t forget about the differences between nonprofit and for-profit schools, though. Even if all of your other choices are the same, your college experience could be vastly different at a for-profit institution than at a nonprofit one. Consider the following points.

Where does the money go?

All state colleges and universities are nonprofit institutions, but many private and liberal arts colleges and community colleges are as well. The main goal of these schools is to help you graduate with a degree or a certificate. You are still paying for your education, but the school is not profiting from any payments that you make; it reinvests your tuition dollars into the school. For-profit institutions want to make money first and foremost, so much of what you pay for tuition will go straight to their investors.One of the differences in nonprofit and for-profit colleges is where the money goes. At a for-profit school, money often goes to investors as shown by this man pocketing several hundred dollars.

What is the difference in cost?

As of a 2012 report by the Senate Committee on Health, Education, Labor, and Pensions, the average certificate program at a for-profit institution cost $19,806. A similar program at a public, nonprofit institution in the same state was found to cost only $4,249. A for-profit school’s associate-degree program cost $34,988, while a similar nonprofit program cost $8,313. The same trend is true for four-year degree programs. Receiving a credential from a nonprofit school is likely to be easier on your wallet.

Where are classes located?

A for profit school may offer only online classes, which may be different from what is offered at a nonprofit school.Nonprofit institutions typically offer classes on-site, while for-profit schools often (but not always) enroll students in online classes. Generally speaking, online classes should be less expensive, because there is no need to pay for a classroom, but students enrolled in online classes at for-profit institutions are not receiving many tuition breaks.

There is a big difference between online classes and in-person classes. In-person classes tend to be more personal. You can see your professor, he or she notices when you raise your hand, and you are surrounded by other students. Online classes you typically go at alone. They may or may not be self-paced, meaning that you need to be dedicated to getting coursework done on your own time. You aren’t surrounded by a ready-made support system, though email is always available. You can learn more about online classes here.

What are the differences in financial aid?

As long as a school is officially accredited, you may be eligible for federal financial aid, regardless of where you study. However, a 2011 study by Harvard University scholars and the National Bureau of Economic Research found that for-profit institutions that accepted federal financial aid increased their tuition costs so that they would still make significant profits. To put it bluntly, a student’s education is not the primary focus of for-profit institutions.

Checking the statistics on nonprofit vs. for profit schools; students working on a bar graphWhat are the statistics?

If the institution you are considering is a for-profit institution, talk to a counselor to learn about loan default rates (the percentage of students who are unable to pay back their student loans), graduation rates (the percentage of students who complete their programs within a normal time period), and postgraduation employment rates. Some schools will share employment figures that include students who are not employed in their fields or are only employed part-time; these statistics are inflated. They are almost meaningless since they do not convey the applicability and marketability of the degree that you are paying to earn.

What happens after graduation?

Try to talk to alumni to learn about how they handled employment after graduation. If you already have an idea of where you want to work after you finish your education, talk to prospective employers about their hiring practices. Ask if they would be interested in employees with degrees or certificates from the institution you are thinking about attending. Be sure to check out other institutions in your area to compare accreditation, cost, student experience, and postgraduation marketability.

Neither a for-profit school nor a nonprofit school is inherently better than the other one, so you shouldn’t feel pressured to make a decision either way. For-profit schools are fighting more of an uphill battle, since nonprofits have one purpose (education) and for-profits have two (profit and education). Let the answers to these questions help make the decision for you!


About Megan Clendenon

Megan C. is obsessed with Cincinnati-style chili, Louisville basketball, and Scandinavian crime fiction. She has lived in six different states and held 12 different jobs since beginning her undergraduate degree at Carleton College in 2008. The wanderlust abated somewhat in recent years, as Megan settled in Texas from 2013 to 2016 to finish a master’s degree in geosciences, write a thesis on the future horrors that stem from climate change, and get married. During her free time, you will find Megan sitting on the couch, cheering for her Louisville Cardinals, planning future adventures abroad, and snuggling with her dog, Tiger. She currently lives outside of Washington D.C.

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