For Profit Colleges came about as a way to develop schools, curriculum and instructors that attract students that were not being properly serviced by traditional (sometimes called brick and mortar) colleges and universities. The For Profit designation comes from the fact that these schools are private institutions run by one or more companies as a business model rather than an educational model. They receive little to no support locally or nationally except through Student Financial Aid. These schools provide a much broader online course selection than traditional schools and also schedule more classes at night and over weekends; providing flexible schedules to non-traditional students.
The companies operating For Profit colleges award primarily two-year degrees. They analyze national hiring trends and work with local communities to determine which skills and training are wanted in future employees. This enables the schools to tailor their programs in order to get their students through school and move quickly into a career field that is waiting for them. This is their “bottom-line”; if a For Profit does not provide the education needed to get their students hired, word spreads quickly and the school will see its customer base disappear.
Demographic Of The Students
The students attending For Profit colleges are older than the average student at traditional schools. A report by Ann Morey in the Journal of Higher Education (2001, second edition), states that the average age at a For Profit is 24 with many students being even older. These older students; many of whom have already started families, do not require or even want the recreational facilities or social organizations that are a part of most colleges and universities.
Reduced Costs For The College
This difference in requirements due to an older student body is actually one reason why For Profit schools claim to operate more cheaply. Real estate is not needed for sports stadiums, student housing and many other facilities. The reduced amount of money required for facility maintenance and upgrades as well as annual property taxes, means that the school will not have to pass these expenses on to students in the form of higher tuition and student fees. This provides a more efficient alternative to the already more cost-effective community colleges.
In fact, For Profit colleges have higher completion and graduation rates for their one and two-year programs than traditional colleges and universities. There is a 2011 study though that shows the increase of wages (at least initially) from one of these degrees is countered by the increased debt due to student loan repayment. The completion rate of For Profit students that pursue a four-year program still lags behind the rate of traditional colleges however. Another study from the Government Accountability Office suggests that graduates from For Profit schools pass licensing exams at a lower rate.
Higher Default Rates For The Students
A study by the National Bureau of Economic Research provides details on student demographics that suggest students who attend a For Profit college are more likely to be in either lower paying jobs or are unemployed. They also have a higher amount of personal debt and after graduation are more likely to default on their student loans than their counterparts at public colleges and universities or those who graduate from private schools. Although For Profit schools do typically serve students from lower and lower-middle class families, this does not completely explain the rate differences.
Since For Profit schools offer streamlined courses that cater to technical and vocational programs, they are Nationally Accredited rather than Regionally Accredited. Students at a For Profit college who are considering transferring to a traditional college or university need to be aware that not all of their credits may transfer. Some traditional schools will not accept any credits from a For Profit even if the course content is identical and using the same textbooks.
Regulations To Protect Students
There have been some failures in the For Profit arena. In 2011, two colleges closed down, Business Computer Technology Institute and the Court Reporting Institute. These closures left over 1,000 students with no degree and few options to transfer their credits. The companies running these colleges and thirteen others were accused of violating an extensive number of federal statutes and finally had to close the schools in order to meet the demands of a 2010 Government Accountability Office report.
For Profit Colleges are dedicated to policing themselves and have been very outspoken in removing these schools from operation while making sure they can survive in order to keep providing services to their students. One of the agencies established to do this, the Association of Private Colleges and Universities is in the forefront of working with the Department of Education to establish new student loan procedures so that students can effectively use their financial aid at the colleges they felt best support their needs.
In the end, it is up to students and possibly their parents to determine where the best fit is for them. While For Profit colleges are actively recruiting students seeking a short time in the classroom and going light on some of the traditional academics, they are providing a needed set of degrees, training and skills that are in demand in a very tight economy.
Research Before Making Your Decision
For Profit colleges can be a legitimate choice for those looking to get a higher education. The decision should be taken very seriously, and the school should be researched prior to commitment. Speaking with current students, and graduates can really help to put things into perspective. Are the graduated happy, and how much in an increase of their salary did they after graduation?