For anyone wandering into the realm of higher education, the myriad of options may seem overwhelming. What path is best for me? Public or Private? College or University? Big or Small? Community College or Trade School? The list goes on. One of the most confusing additions to these questions is the meteoric rise of for-profit institutions in the last decade.
What is the difference between a for-profit and a not-for-profit. The simple answer is that not-for-profit institutions are not really "owned", they are operated. For example, your flagship state university is not so much owned by the state, it is operated on state or federally held land. This is where the phrase "land-grant" comes from. As a result, all dollars absorbed by a not-for-profit are re purposed within a campus' operations, either through student instruction and services, facility upkeep and new construction, or through re-investment in the endowment which serves as both a pool for distribution of financial aid and scholarships and a sort of a rainy day fund should an emergency arise where a quick dose of cash is needed - for example, the water pipes need replacement across campus. Ultimately, all money absorbed by a not-for-profit is either directly or indirectly used for the eduction of the student.
Not so with for-profit institutions. For-profits are owned by a single owner, an ownership group or a corporation. Because they are privately held companies, they have greater flexibility in what they can do with dollars they absorb and they are under no obligation to put those dollars towards student education. As a result, any dollars brought in by these businesses above and beyond the cost of running the business become profit for the owner(s), they do not need to be reinvested. Given the great need for an educated populous in today's economy, for-profits are able to market an in-demand service and make a great deal of profit with little to no accountability to the consumer. Check out this great article on CNN today that illustrates the pit-falls of the for-profit higher education industry.
This isn't to say that for-profit always equates to bad. For-profits have their roots in providing educational services that meet very specific vocational goals. Schools such as DeVry and ITT Tech have for years been providing students seeking career advancement in specific fields such as mechanics, computer technical repair and secretarial work. However, they do so with a cost and sometimes those costs are more than a student bargains for. Also, the "degree" they earn may not be the degree they thought they would be obtaining. Most for-profit institution credits are not accepted by not-for-profit institutions because they lack the appropriate accreditation, making the credits obtained obsolete when a student goes to transfer.
As with all aspects of the college search, it is important to ask questions and get all the facts before making a commitment. If you are a considering a for-profit, do your research and know what you are signing up for - it could save you a lot of frustration in the long term.