For-Profit and Not-For-Profit Colleges

Lesson Transcript
Instructor: Natalie Boyd

Natalie is a teacher and holds an MA in English Education and is in progress on her PhD in psychology.

Whether a college is for-profit or not-for-profit is important to consider because it can impact your experiences, education, and finances. Explore the main differences between for-profit and not-for-profit colleges, and learn how to choose between them. Updated: 10/02/2021

For-Profit vs. Not-For-Profit

Jackson is a senior in high school and is getting ready to apply to colleges. But he's not sure what he should be looking for in a school. He knows that he needs some financial aid, but beyond that, what matters?

There are many elements to a college that Jackson should look at. Academics, finances, size of the school, and student life options are just a few. But before he examines all of those, he should also first know whether the school is for-profit or not-for-profit.

For-profit schools are those that are run by a private, profit-seeking business, while not-for-profit, or non-profit, schools are those that do not have a goal towards making profits. This doesn't mean, of course, that non-profit colleges do not care about making money. But the money they make is put back into the college in the form of services and aid for students, whereas money at a for-profit college is divided between being put back into the college and going to the owner as profit.

But does whether a college is for-profit or not-for-profit change the way the school is run? And how can Jackson choose between the two? Let's look closer at the fundamental differences between the two and how he can know which is the right choice for him.

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  • 0:01 For-Profit vs. Not-for-Profit
  • 1:23 Mission
  • 3:21 How to Choose
  • 6:21 Lesson Summary
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Mission

Let's say that Jackson is considering two different schools - a non-profit college and a for-profit college. He understands the basic difference between the two. But what exactly does that mean in terms of how the school operates?

The fundamental difference between not-for-profit and for-profit education is that a not-for-profit college is an educational institution first and foremost, whereas a for-profit college is a business. Not-for-profit colleges have missions that are centered on providing a rigorous, academic education to their students. In comparison, for-profit colleges have missions that place making money first. They want to provide a degree to their students, but that's the way that they get the profits they are seeking.

Notice the difference in what these types of schools want to provide students. Not-for-profit schools are focused on providing an academic education to their students. That is, they want their students to learn and grow intellectually. On the other hand, for-profit schools are concerned with providing a degree to their students. They educate students with a specific career focus in mind, not with a focus on a broad education experience.

What does this mean for Jackson, who is considering both types of college? At the non-profit institution, Jackson is likely to encounter faculty and staff who have high-level degrees, like doctorates. At the for-profit institution, the faculty might not be as well-educated.

Further, a for-profit school is likely to require much less in the way of general education. Jackson might be able to go in and just take the classes in his field of study. In contrast, non-profit institutions almost always require that students take classes outside of their major, usually including classes in areas like English, math, science, and foreign languages.

How to Choose

So, which is better? Should Jackson ignore for-profit educational institutions? Defenders of for-profit education point out that it fills gaps where traditional, non-profit education leaves off. Specifically, for-profit colleges are often focused on trade industries. If you've ever seen a commercial for a school offering to teach you how to be an A/C repairman or learn how to become a medical billing and coding specialist, you're almost certainly seeing a commercial for a for-profit school.

What does this mean? What career Jackson pursues can affect his decision on whether to go to a for-profit or not-for-profit school. For example, if he wants to be a paramedic, he might find the right certification at a for-profit school, but if he wants to be a doctor, he should probably go to a not-for-profit school.

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