For-Profit College Definition & What to Expect from College Tuition Costs


What is a for-profit college, and how is it different from the traditional college? We are here to answer those questions with a for-profit college definition and a guide to help you understand this less-common type of college.

If you are interested in learning more about for-profit colleges, as well as their college tuition costs, you will find all the information you are looking for. We will go over:

  • A for-profit college definition
  • A list of popular for-profit colleges
  • A rundown of what to expect for-profit cost of college tuition/college expenses
  • A comparison of for-profit college costs vs. nonprofit college tuition costs
  • A look at where all those college expenses go at a for-profit
  • A list of benefits you may find at for-profit institutions

This for-profit college definition and guide is good for people who are considering their higher education options. You will want to understand these institutions and their college expenses before you commit your time and money.

for-profit colleges

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This guide is also helpful for those who hear a lot about for-profit colleges on the news and want to understand more about them.



What Is a For-Profit College? A For-Profit College Definition

Most people are not completely aware of what a for-profit college really is. That is why it is so important to have a for-profit college definition.

First, here is the Money Crasher’s for-profit college definition:

For-profit schools are educational institutions that are corporations and often have shareholders. They operate as a business, and the product they sell is education. Their goal is to provide quality education, and in doing so generate a positive return, or profit, for their shareholders.

Next, here is the National Conference of State Legislature’s for-profit college definition:

For-profit colleges and universities, unlike their public counterparts, are managed and governed by private organizations and corporations. During the past two decades, enrollment at for-profit institutions increased 225 percent.

Now let’s take a look at our for-profit college definition.

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Our For-Profit College Definition

To make this easier to understand, here is our for-profit college definition broken down into simple bullets:

  • A for-profit college is run privately.
  • The aim of this college is to do exactly what the name suggests: make a profit.
  • The accreditation process is different, so most traditional college credits will not transfer, and some employers may not recognize the accreditation.
  • And as CNN Money points out, “For-profit colleges usually offer career-oriented programs in subjects like nursing, criminal justice, business, and information systems.”

One of the best ways to really understand the for-profit college definition is to compare it with the regular nonprofit college. My College Guide defines them this way:

“Nonprofit institutions usually receive funding from the government, tuition, and endowments, and the money received is put back into the curriculum, instruction, and other college operations that support students and faculty.”

Even most private colleges are still operating under the nonprofit model.



A List of For-Profit Colleges

Now that you have a for-profit college definition, let’s take a look at a list of some of the most popular for-profit institutions. This is not an exhaustive list; there are others, but these are some of the institutions you may be most familiar with.

college costs

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  • University of Phoenix
  • DeVry University
  • Kaplan University
  • Walden University
  • Capella University
  • Colorado Technical University
  • Grand Canyon University
  • Strayer University
  • Lincoln Group of Schools
  • Ashford University
  • Argosy University
  • Full Sail University

Now that you know what types of institutions these are, let’s take a look at what sets them apart the most: college expenses.

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College Tuition Costs at a For-Profit College

Everybody already knows that going to college is quite the financial investment due to college tuition costs and other college expenses. That’s why American citizens have student loan debt of more than $1.4 trillion.

So how do for-profit colleges do in terms of college costs?

Short answer: they tend to be extremely expensive, way more expensive than nonprofit options.

In fact, most criticism around these types of colleges is about their cost of college tuition and other college expenses.

  • Forbes reported that one credit at a for-profit school cost an average of $647.
  • Around 96% of students who go to a for-profit college take out a student loan.
  • Only 46% of students were “able to pay down at least $1 of their student debts three years after graduation.”

The best way to see how these college tuition costs are so much higher is to compare the college expenses between for-profit schools and traditional colleges…



Comparing College Expenses: For-Profit vs. Nonprofit

Let’s take a closer look at how college expenses vary from nonprofit to for-profit:

  • U.S. News reported that college tuition costs at for-profit colleges averaged $15,130, when a two-year public college averaged $3,264 and a four-year public college averaged $8,893.
  • U.S. News also reported that “out-of-state public students and private nonprofit students paid more, on average, than students at for-profits.”
  • The Center for Online Education compared the average for-profit cost of college tuition with a combined average of public and private nonprofit colleges. Here are their results: $11,039 for public/private nonprofits and $15,130 for for-profits.

The comparison does not stop at only looking at cost of college tuition. It also continues in how these college tuition costs are being utilized. We will look at that below.



Where Do the For-Profit College Tuition Costs Go?

Not only are the college tuition costs higher, there is less money being used in the actual instruction. For example, For Profit U provides a fact sheet, and on that sheet is a rundown of how the college expenses are used on average:

  • 22.7% on marketing, advertising, admissions, recruitment
  • 19.4% on pre-tax profit
  • 17.2% on instruction

The Center for Online Education reports that in 2012 Google spent nearly $400,000 per day trying to recruit new students.

college expenses

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Another factor in the high college costs is lobbying. This is why it is important to understand the for-profit college definition and what sets these schools apart. A for-profit college can have influence in the political spectrum.

They lobby with political donations to promote legislation that helps their school and interests.

And as Franklin University points out, “for-profit institutions must provide adequate financial returns for their shareholders and stakeholders. Making a profit is an absolute priority.”



So, What Are the Benefits of a For-Profit College?

We have spent the past few sections talking about the heightened college tuition costs in the for-profit realm and how those college expenses are not always used to further actual instruction.

This leaves us with the question: Is there anything good about for-profit colleges?

  • Ease of enrollment: Remember the for-profit college definition showed us these universities need to make money. This means they are often more will to accept students with weaker education histories and “at-risk” finances.
  • Quick graduation: Many of these for-profit institutions have a fast track to graduation; this can be a great help to those who are already in their careers and want to advance quickly.
  • Flexibility: In most cases, these colleges have more flexibility class schedules and offerings than a traditional nonprofit college; they are normally marketed as ideal for those with full-time jobs.
  • Practical courses: Most classes and degree programs at for-profit institutions are focused on “real life” types of studies. These are the degrees that will typically bring the most practical jobs.
  • Online offers: Most for-profit colleges offer many online degree options, so you can live anywhere while studying.

These advantages just may be worth it for some people, so the high college costs do not bother them as much.

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But What Are The Downsides Of A For-Profit College?

We already know that the college tuition costs and the overall college expenses of a for-profit institution are extremely high. This is definitely one of the biggest negatives to consider.

For some, even the for-profit college definition—making a profit off education—turns people’s minds into a product. Others do not mind this so much.

No matter where you stand on the issue of these college tuition costs, for-profit institutions receive significant amount of criticism in other areas too.

  • Accreditation: If students are going to spend time and money receiving a higher education, they will want to be sure the credits are fully accredited; this is often a problem with for-profit schools.
  • Loan Default: For-profit colleges have a reputation of having many of their students default on their student loans.
  • Failing grades: In January of 2017, CBS News reported that the Education Department gave 800 for-profit schools a failing grade. 1,200 other for-profit schools were in the “warning zone.” Though the for-profits made up on 66% of the evaluated schools, 98% of those that failed were for-profits.
  • Questionable success: Many believe the marketing for these institutions is deceptive in order for them to make money (which goes back to our original for-profit college definition). For example, these people believe the graduation and employment rates are not as good as they seem.

These disadvantages are extremely important to consider—especially with the expensive cost of college tuition.

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Conclusion—A For-Profit College Definition

Now that you have your for-profit college definition and a rundown of the typical college tuition costs and college expenses, you can make up your own mind about the validity of a for-profit institution.

If you look up a for-profit college definition or try to learn more on the Internet, you will undoubtedly see article after article condemning these types of higher education institutions.

In fact, the for-profit college enrollment is declining, which makes sense when you consider the college expenses.

However, the most important thing to do is to make sure you understand the for-profit college definition and then weigh all the pros and cons and find the ultimate degree program for you.



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