Student-centric advice and objective recommendations
Higher education has never been more confusing or expensive. Our goal is to help you navigate the very big decisions related to higher ed with objective information and expert advice. Each piece of content on the site is original, based on extensive research, and reviewed by multiple editors, including a subject matter expert. This ensures that all of our content is up-to-date, useful, accurate, and thorough.
Our reviews and recommendations are based on extensive research, testing, and feedback. We may receive commission from links on our website, but that doesn’t affect our editors’ opinions. Our marketing partners don’t review, approve or endorse our editorial content. It’s accurate to the best of our knowledge when posted. You can find a complete list of our partners here.
For-Profit vs. Nonprofit Colleges: Everything You Need to Know
By
Maria Geiger
Maria Geiger is Director of Scholarship Services at Scholarships360. She is a former online educational technology instructor and adjunct writing instructor. In addition to education reform, Maria’s interests include viewpoint diversity, blended/flipped learning, digital communication, and integrating media/web tools into the curriculum to better facilitate student engagement. Maria earned both a B.A. and an M.A. in English Literature from Monmouth University, an M. Ed. in Education from Monmouth University, and a Virtual Online Teaching Certificate (VOLT) from the University of Pennsylvania.
Learn about our editorial policies
Bill Jack has over a decade of experience in college admissions and financial aid. Since 2008, he has worked at Colby College, Wesleyan University, University of Maine at Farmington, and Bates College.
Learn about our editorial policies
Maria Geiger is Director of Scholarship Services at Scholarships360. She is a former online educational technology instructor and adjunct writing instructor. In addition to education reform, Maria’s interests include viewpoint diversity, blended/flipped learning, digital communication, and integrating media/web tools into the curriculum to better facilitate student engagement. Maria earned both a B.A. and an M.A. in English Literature from Monmouth University, an M. Ed. in Education from Monmouth University, and a Virtual Online Teaching Certificate (VOLT) from the University of Pennsylvania.
Learn about our editorial policies
When it comes to colleges, not all are created equal! Some have the goal of educating while others have the goal of profiting. So, which type of college is right for you? Maybe you are wondering: what is the difference between for-profit and nonprofit schools? Keep reading to learn everything you need to know about for-profit and nonprofit colleges.
What is a for-profit college?
For-profit colleges and universities are institutions that are privately owned. They typically generate revenue that is used for non-educational purposes. Typically, for-profit colleges prioritize generating profits for their owners and shareholders.
What is a nonprofit college?
Nonprofit colleges put any extra revenue generated back into their institution such as to improve educational quality or facilities. Additionally, nonprofit colleges receive support from federal and state governments through donations and grants. Nonprofit colleges can be public or private!
Differences between for-profit and nonprofit colleges
Cost
For-profit schools rely heavily on tuition, fees and donations in order to make a profit, which can lead to higher tuition costs for students. However, for-profit schools do have scholarship options for students and students can apply for federal aid if the for-profit school is accredited.
Nonprofit schools receive generous aid from the federal and local governments to be able to function. Therefore, there are a lot of opportunities for students to receive scholarships or aid to make the cost of attendance relatively low. Additionally, in-state students can receive inexpensive tuition rates for state universities.
Academics
For-profit schools tend to offer career-specific programs with a focus on earning revenue over student outcomes. In contrast, nonprofit schools typically offer a wide array of majors and use funding to improve student resources and their academic programs.
Funding
For-profit institutions are mainly funded through student tuition and fee payments along with donations. Nonprofit institutions are mainly funded through state and federal funding in addition to tuition payments and donations.
Check out: How do scholarships work?
Admissions
For-profit schools tend to have less rigorous admission standards than nonprofit schools. Many for-profit schools have no GPA or test score requirements and offer rolling admissions which allows students to enroll all year long. Additionally, for-profit schools tend to have limited transfer opportunities as they tend to accept fewer transfer credits than nonprofit schools.
Nonprofit schools vary in admissions requirements; however, typically students will need to submit their GPA, test scores, letters of recommendation and essays in the fall to be considered.
Accreditation
Accreditation is important as it affects transfer options and the overall reputation and quality of an institution. Both for-profit and nonprofit institutions have accreditation and non-accredited schools. So, always be sure to check a school’s accreditation status before committing to it!
Also see: How to choose a college
Graduation rates
Nonprofit schools tend to have higher graduation rates than for-profit institutions.
Related: Average college graduation rates for US students
Examples of for-profit and nonprofit colleges
Colleges can be categorized into many designations. Here are a few types of schools and if they are commonly for-profit or nonprofit. It is important to note that there are many exceptions to these categories, however, generally certain types of schools will be for-profit or nonprofit.
| For-profit schools | Nonprofit schools |
| International colleges | Ivy League schools |
| Online schools | State universities |
| Online schools | |
| Liberal arts colleges |
Examples of for-profit schools
- Grand Canyon University
- Strayer University
- Capella University
Examples of nonprofit schools
Related: Liberal arts colleges vs universities
Is a for-profit or nonprofit college right for me?
Ultimately, the answer to this question depends on you and your personal circumstances and goals. A nonprofit university is typically the best option for most students. Nonprofit colleges will have funding and programs that can help you reach your career goals regardless of what they are.
Typically, for-profit schools value profit over the quality of their education which can provide challenges for students. However, this is not always the case and some for-profit schools offer great features such as open enrollment.
Ultimately, research will be your best friend to figure out if a for-profit or nonprofit college is right for you! Ensure that any school you are considering is accredited and has strong academic programs for your intended major. And remember, no matter where you are on your educational journey, apply for all the scholarships that you are eligible for!