For-profit vs. non-profit schools. What’s the difference?

non profit school

When you’re looking for a job, you may hear a term like “non-profit sector,” or maybe a place of employment describes itself as a “corporate for-profit entity”. Well, what does that really mean? Doesn’t everyone want to make some profit? Even charities have to make money to do their work; why else would they be asking for donations all the time? On that same notion, you hear “non-profit” and you may think of organizations and institutions like Habitat for Humanities, the Red Cross or public schools, churches and hospitals (well, at least some), and if you know people who work in those kinds of areas, they’re not exactly known for raking it in.

However, when we’re talking about colleges it’s useful to know exactly what these terms mean. Both non-profit and for-profit schools grant degrees, but their focus and framework are quite different.

What’s Their Motivation?

Non-profits offer a learning environment designed with the student in mind. Nobody owns a non-profit; they are operated by a board of directors who do not get payment, and there are no stocks and shareholders to create income for. So, they are free to keep the focus and motivation on providing a quality education to their students.

Featured Programs

For-profits are solely there as a business to make money for owners and shareholders by offering their product: education. They must provide financial returns (profit) to their investors. Supporters claim that for-profit schools operate more efficiently, since they can cut costs more easily in the name of creating returns. Plus, they usually don’t have the recreation facilities or extra-curricular expenses that traditional colleges have, they can spend more of the tuition towards students’ learning.

What’s the Bottom Line?

Non-profits are usually more affordable; they try to keep competitive with state tuition costs (of course this is not always the case, especially with elite private non-profits). On average, for-profits charge $31,000 average tuition vs. $26,000 for non-profit colleges.

What’s the Outcome?

28% of for-profit college students graduated with a four-year degree vs. 65% at private non-profit colleges. Further, a study by the National Bureau of Economic Research, in Cambridge, Massachusetts, stated that students who attend for-profit education institutions are more likely to be unemployed, earn less, have higher debt levels, and are more likely to default on their student loans than similar students at non-profit educational institutions

While non-traditional students may think for-profit schools are an attractive choice because of open enrollment policies and flexibility of program (online, short semesters, night and weekend options) they may soon realize they are paying a much greater cost for a mediocre school.

Regardless if you choose to attend a no-profit or for-profit school, you want to ensure the institution is accredited by one of the 6 regional accrediting boards here in the United States. Accreditation makes sure the time, energy, and money you are investing in meets a certain academic standard that will be valued by potential employers. The buck stops with them – a diploma from an unaccredited school isn’t going to impress anyone you want to work for.


Top 50 Best Value Online Degree Completion Programs

Top 25 Best Value Online Colleges

25 Colleges You Can Attend Tuition-Free