Profit, not- for profit private universities: Know the difference

Morgan Koehler, Reporter

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As seniors of D.C. Everest grow closer to their graduation day, many may be wondering: what is the difference for profit and non for profit private universities? For-profit and non-for-profit colleges are more different than you think for various reasons, and students should attend nonprofit schools over for-profit schools if they are able to.

  The difference between for-profit and non-for-profit lies in the name. For-profit universities are looking to make a profit while non-for-profit schools will spend their money on expenses.

  Mr. Pete Newton, guidance counselor at D.C. Everest Senior High made a comment.

  “For-profit colleges are in the business of making money whereas not-for-profit are not,” he says. “Their [nonprofit schools] funds are for expenses, staff salary and such. For-profit schools do the same thing, but get a profit as well.”

  Both nonprofit and for-profit schools enroll two million or more students. However, for-profit schools mostly enroll students who cannot attend conventional colleges for various reasons, most commonly time and money. These students are mostly people who are veterans or working in low-paid jobs.

  The Week wrote an article pointing out the flaws of for-profit colleges. Critics say the schools “dubious coursework and degrees that don’t lead to good jobs, but do leave students with crushing debt.” The students accumulated so much debt, only to find that no other place would recognize their credits. In fact, students make up about half of all student-loan defaults.

  For-profit colleges receive most of their funds from federal grants and loans. In fact, profit is a top priority because the schools must provide enough financial returns to their shareholders and stakeholders. However, recruiters target the poor and minorities because students need the federal financial aid.

  The Week interviewed Education Secretary Arne Duncan about the matter.

  “‘Millions of low-income students are borrowing heavily to attend for-profit colleges,’ Education Secretary Arne Duncan said, “and too many of them are dropping out, failing to get a job, and leaving taxpayers with the bill.’”

  The government took action. The Department of Education approved new rules blocking federal aid for for-profit colleges if less than 35 percent of its former students are actively paying off their debt. For-profit schools tried to claim it was illegal because the law affected them but not nonprofit schools, but the government continued breaking down flawed parts of the for-profit colleges, such as when the government filed suit against the Education Management Corporation on grounds that it illegally collected over 11 billion dollars in federal aid and paid recruiters based on how many students they enrolled.

  On the other hand, nonprofit schools tend to be more affordable. Nonprofits typically compete with public schools in terms of cost, especially compared to for-profit schools.

  “Average tuition cost at for-profit colleges is $31,000 after grants vs. $26,000 for non-profit colleges,” Franklin University wrote on their blog.

  According to Franklin University, for-profit schools spend roughly $4,000 per student and nonprofit schools spend about $17,500 per student, and that’s just for instructional costs.

  Franklin University also found that for-profits spend about $8 per student on research while nonprofit schools spend about $5,800.

  Most students don’t even complete their degree. “The University of Phoenix, for example, is the industry leader, yet it graduates less than nine percent of its bachelor’s degree candidates within six years.”

  Less than 30 percent of for-profit students graduate while about 65 percent graduate from nonprofit colleges. The higher percentage of non-profit school graduates could be contributed to the focus of these schools, making sure that students receive a good education and graduation within the student’s target timeframe.

  Even the campuses and social scene is generally better at nonprofit schools. There is little student support or campus life at a for-profit school. Students will not be able to be part of student activities or take advantage of tutoring services.

  “For-profit schools also tend to be more bare bones and have less of a feeling of community and camaraderie. They don’t often have a campus; instead, they frequently lease building space. Indeed, you won’t find a lot of tailgating or frat parties happening at a for-profit college,” My College Options wrote.

  They also found that professors at nonprofit schools can create their own lesson plans and revise or deviate from them if they wish while teachers at for-profit schools must teach a predetermined plan.

  Nonprofit schools offer a wide variety of programs, and students can spend time trying out different programs before selecting a major. Students seeking specific programs can usually find a for-profit college that specializes in that program. The student should know which program they want to pursue before potentially wasting their money.

  One of the few benefits to a for-profit school are the many online, night, and weekend classes they typically offer. They tend to cater to students who are attending school to learn a specific skill set, and not for personal reasons or academic explorations.

  In terms of prestige, nonprofits usually win. Some employers may think more highly of a graduate at a nonprofit school rather than a graduate from a for-profit school.

  So that begs the question: why do students enroll at for-profit colleges when nonprofit schools seem to be better overall? The answer is for lack of better alternatives. Their admissions process is less selective because they want to admit as many students as possible. This can be beneficial if someone is unable to get into another school. Some don’t even require a high school diploma or GED. For-profit schools have targeted the underemployed as well as others with aggressive tactics that promise to teach better skills and raise their salaries. These tactics bring for-profit schools a lot of money. Some schools have a yearly revenue of more than four billion dollars.

  No matter where one looks, the general consensus seems to be that nonprofit schools are better than for-profit schools, so based on the information given here, I would heavily suggest going to a nonprofit school over a for-profit one if one is able to, especially if one wants to live on campus or wants to explore different things. There are surely good for-profit schools, but one must be careful and make sure it is accredited and that it is a school suitable for them.

  At D.C. Everest Senior High, students can go to their guidance counselor and ask them advice about post-secondary schools. They have resources that can help, such as information on nonprofit private schools in the state and if they do not have information on a subject that a student is asking for, they will try to find it. Mr. Pete Newton is one of them. When asked follow-up questions, he gave additional sources that were helpful.

  Multiple attempts have been made to reach UW Stevens Point Wausau Campus and Rasmussen College Wausau Campus, but there has been no reply from them as of yet.

 

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Profit, not- for profit private universities: Know the difference