For-Profit vs. Nonprofit Colleges: What’s the Difference?
The differences between for-profit vs. nonprofit colleges can be a key factor in determining what college is right for you.
The type of institution you choose can have a sizable impact on your earnings after graduation, your college experience while enrolled, and the price you’ll ultimately pay for your degree. For-profit colleges and universities have been under increased scrutiny in recent years due to allegations of predatory behaviors and questions about the value of a degree from a for-profit college.
Still, it’s worth exploring all your college options, no matter the type of institution, so let’s break down the differences between for-profit and nonprofit colleges.
Nonprofit vs. For-Profit College: What Is It?
Both private, nonprofit and for-profit colleges are private institutions that run independently of state governments. Private and public colleges differ in that sense since public colleges — which are also nonprofit — are overseen by the state where they are located.
All types of colleges aim to grant degrees or certificates to students.
Nonprofit Colleges
Private, nonprofit colleges and universities run independently but often receive performance-based funding from state governments. These institutions primarily earn money from tuition, fees, donations, and endowments.
Public colleges and universities are run by state governing boards and are directly impacted by state legislation and budgets. Nonprofit colleges are not beholden to investors, so they often reinvest profits back into the institution and programs for students.
For-Profit Colleges
For-profit colleges and universities are typically owned and managed by a private corporation. They are beholden to investors, which means their primary function is to turn a profit. Because of this, for-profit colleges may be less likely to reinvest profits back into the institution.
For-profit institutions are also subject to more regulatory oversight than nonprofit or public colleges and universities.
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Nonprofit vs. For-Profit Colleges: Key Differences
The goal for enrolled students may be similar, but nonprofit and for-profit colleges differ in key ways:
| Key Aspect | Private, nonprofit | Public | For-Profit |
|---|---|---|---|
| Affordability | $46,870 average annual tuition and fees at four-year schools | $10,490 average annual tuition and fees at four-year schools | $15,870 average annual tuition at four-year schools |
| Reputation | Reputation for high prices but quality education | Reputation for low prices and varying qualities of education | Reputation for aggressive recruitment of students, poor earnings outcomes |
| Outcomes | 90% posted a positive median ROI for students | 96% posted a positive median ROI for students | 41% posted a positive median ROI for students |
| Student experience | Typical college undergraduate experience, less personalized | Typical college undergraduate experience, but often offer other options for adult learners | Often geared toward adult learners, more personalized experience with a focus on workforce needs |
| Completion rates | 68% six-year completion for first-time, full-time bachelor’s students | 63% six-year completion for first-time, full-time bachelor’s students | 29% six-year completion for first-time, full-time bachelor’s students |
Other Differences to Note Between Nonprofit and For-Profit Colleges
- Mission: For-profit colleges have a more profit-driven mission than nonprofit colleges.
- Sports: Only one for-profit college (Grand Canyon University) has a D1 athletic program.
- Governance: Nonprofits are typically governed by a board of trustees, while for-profits are run by a private entity.
- Funding: Nonprofit institutions are more reliant on government funding than for-profit colleges.
Pros and Cons of a Nonprofit and For-Profit Colleges
Nonprofit colleges and universities generally lead to a better return on investment (ROI) for college students, but this is not the case for all students due to the comparatively high tuition rates seen at private, nonprofit institutions.
For-profit institutions tend to post worse outcomes for students and are more likely to have sudden university closures, potentially derailing your college experience. On the other hand, these schools often offer more specialized coursework and a personalized student experience, which may fit your educational needs. Their smaller sizes also mean they can be more adaptable to the local workforce.
Examples of For-Profit Colleges
For-profit colleges share many similarities:
- Many offer just a handful of programs in niche subjects like architecture, veterinary medicine, or design. You can often deduce the school’s specialty by its name alone.
- Many for-profits also emphasize a flexible learning environment for working adults. Nearly all for-profit colleges have an online component, and some are exclusively online.
- Enrolling in a for-profit college will often cost less than attending a private, nonprofit college, but they are often pricier than a public university.
| School | Location | Description |
|---|---|---|
| Full Sail University | Winter Park, Florida | Known for its programs in media and production. Alumni include multiple Grammy-winning recording/audio engineers. |
| Grand Canyon University | Phoenix, Arizona | Became the first for-profit Christian college in the U.S. in 2004. Also operates a non-denominational seminary. |
| Capella University | Online | Offers over 1,600 online courses with doctoral, master’s, and bachelor’s degree programs. |
| University of Phoenix | Phoenix, Arizona | Known for its flexible online programs geared toward working adults. |
| Rocky Mountain College of Art and Design | Lakewood, Colorado | Offers degree programs in art, design, and business, as well as a digital photography certificate program. |
| Colorado Technical University | Colorado Springs, Colorado | Provides online degree programs in technical subjects like computer science, information technology, and management. |
| NewSchool of Architecture & Design | San Diego, California | Caters to students interested in architecture, design, and construction management. Includes three master of architecture options. |
| Monroe College | New York City, New York | Recognized as an affordable college in New York City, with 97% of students receiving need-based financial aid in 2021. |
| Strayer University | Washington D.C. | Offers varied degree programs in subjects like criminal justice, information technology, and health services administration. |
| Stanbridge University | Irvine, California | Caters to students interested in nursing and veterinary science. Includes hands-on training options. |
Nonprofit College vs. For-Profit College: Which One Is Right for Me?
There is no one-size-fits-all answer to whether a nonprofit or for-profit college would be better for you. Instead, you should take the following into account when comparing nonprofit and for-profit schools:
- Accreditation: No matter what, the institution you attend should be accredited.
- Financial aid: You can apply to multiple schools to receive financial aid offers from each, allowing you to compare the true cost of attendance.
- Student support services: Based on your education and career goals, consider whether the institution has the support you’ll need.
- Outcomes: Look into the graduation rates, average student loan debt, and median earnings of graduates from each school.
The College Scorecard is a helpful tool that allows you to compare not only institutions but also specific programs within two different schools. For example, you can compare the median earnings of graduates from one veterinary program at a for-profit college versus a similar program at a public university.
Frequently Asked Questions About For-Profit and Nonprofit Colleges
Many people choose for-profit colleges because some offer specialized programs aimed at workforce development. They also tend to be smaller than other institutions, providing more one-on-one education.
For-profit colleges and universities are known to spend heavily on marketing and recruitment, which may also explain why students choose these schools.
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