What to Watch for When Considering a For-Profit College

For-profit schools have become very popular in recent years, largely on the back of the marketing done to the “working adult.”  You’ve likely seen the commercials from the especially-popular and highly self-promoted schools like the University of Phoenix, the themes of which revolve around the earnest but harried adult desperately seeking to go back to school to ascend to higher levels at work and realize a better life for himself and his family; for-profit schools have done such a masterful job of marketing their product well beyond the kinds of promotions typically seen from traditional, non-profit public and private colleges and universities. In truth, one of the great advantages offered by the for-profit community is the number of programs that can be completed entirely online; while traditional non-profits have done a better job in recent years supplying online study options to students, many for-profits do provide a breadth of flexibility in that regard that remains unmatched by a lot of non-profits.  

Still, many have come to see for-profit colleges and universities as tantamount to a scam, and one reason for that is that they’re so expensive – what offends many in this regard is that because such a large number of them do offer online-online programs, and so few provide anything close to the other features of traditional schools, that it’s felt the for-profits should be relatively inexpensive. While part of the reason for the price tag is that they don’t have access to the same government subsidies as non-profits, the other reason is that they are, well, for profit; they are private companies with shareholders, and so are in the business to make money as much (or more, in the minds of cynics) as to educate. The tuitions are certainly more expensive than state schools, and the amount of debt for-profit students typically carry is substantial – according to the Institute for College Access & Success, 90 percent of graduates from for-profits (2012) left school with student debt, with the average debt load among those coming in at around $40,000. Do these facts, by themselves, make these schools a “scam?” Not at all, but they are worth reminding any prospective student considering a for-profit to tread carefully before deciding on one as his next educational move. Some smart efforts to make in advance of enrolling in a for-profit college or university may include:

Doing thorough research on the school you’re considering before enrolling or paying them any money. The Internet is a beautiful thing, and perhaps its greatest achievement is putting information power squarely in the hands of regular people. A good set of Google searches will likely reveal signs of trouble with the school you’re prospectively considering, if there are any problems with it.

Checking for regional accreditation. Regional accreditation is the quality standard that distinguishes “real” colleges and universities from the wannabes (contrary to what you may think, national accreditation is not as valued as regional accreditation). The regional accreditation bodies in the United States are: Middle States Association of Colleges and Schools; New England Association of Schools and Colleges; North Central Association of Colleges and Schools; Northwest Accreditation Commission; Southern Association of Colleges and Schools; and the Western Association of Schools and Colleges. The traditional, non-profit schools will largely be regionally accredited, and some of the for-profits will, as well. While it may not necessarily be the case that a school without regional accreditation is necessarily “no-go” for you, particularly if it’s a school that does meet an appropriate credentialing standard as far as a specific industry or profession, if you are seeking a college degree in a traditional, mainstream discipline (business, criminal justice, psychology, etc.), that degree will likely be viewed as valueless by a prospective employer or graduate school if the college from which it was obtained is not regionally accredited. There can be exceptions to this, but this will generally be the case.

Double-checking to be sure there isn’t a less-expensive and accessible state school option available to you. Before enrolling in a for-profit, check to make sure that the college and university system in the state in which you reside doesn’t have a way for you to pursue your desired program of study conveniently and for less money. Remember that state schools simply don’t market on TV and the Internet the way for-profits do, so you might be missing out on a much-cheaper…and better-regarded…option by overlooking them. This said, as previously noted, one of the issues with traditional schools is that they still don’t offer quite the same flexibility in program access the way many for-profits do, but still check.

Keeping in mind that job placement rates…for both non-profits and for-profits…are not always reliable. This has been an issue for some time. While the job placement rates touted by for-profits probably deserve particular scrutiny by you, the matter of claiming favorable rates is not an issue that affects for-profits alone – non-profits can be “sketchy” that way, as well. The biggest issue has to do with just what constitutes “job placement” by the school; for example, at many schools, if a student graduates with a degree in a particular discipline, and follows that up with employment…even part-time employment…anywhere, even at a job that is well outside of the field studied and which does not require a degree at all, the acquisition of that job will nevertheless be regarded by the school as an example of a successful job placement. Presently, it is very difficult to get at the truth of the matter, so you will have to take the information you do unearth with a grain of salt, unless you’re certain it’s accurate.

There are plenty of people with strong academic records and outstanding employment histories who choose for-profit schools because of the tremendous flexibility in study option they offer – while a few traditional non-profits are improving in that area, they are still way behind. Additionally, it’s not as though all non-profits are great prizes as far as graduation rates and job placement, either. If “flexibility of study option” is perhaps the most important consideration for you, and thus for-profits schools may, as a result, rank high on your list of considerations, just be sure to pay attention to matters of cost and accreditation, as well as see if you can dig up any evidence of significant problems through a series of comprehensive searches of the Internet. It’s also not a bad idea to Google such phrases as “best-ranked for-profit colleges,” that kind of thing – for example, a good list of “The 25 Best Online Colleges for 2014” can be found HERE. By the way, keep in mind that even in such a list of “25 best” or whatever, you cannot assume that all schools listed meet standards of regional accreditation – even among the “best,” it will be a mixed bag, which is why it’s so important for you to do THIS homework before you start doing your REAL homework.

The information contained here is for general information purposes only. The Financial Writer blog and Bob Yetman disclaim responsibility for any liability or loss incurred as a consequence of the use or application, either directly or indirectly, of any information presented herein. Nothing contained in this article, or any other article featured at this blog, should be construed as a solicitation or recommendation to engage in any financial transaction. You should seek the advice of a qualified professional before making any changes to your personal financial profile.

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