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What Is a For-Profit School – Pros & Cons of Online Colleges

By Kiara Ashanti

attending an online schoolIf you are one of the millions of Americans who are out of work, joining the ranks of those returning to school is a great idea. In fact, it may be necessary for your long-term financial survival.

There are two realities that those with and without jobs must face. One, is that there are just too many applicants for the jobs currently available, which means competition is fierce. If you do not have a degree, then you are at a disadvantage. And if you do have a degree, you are slightly better off, but may remain in a situation where employers can hire workers with advanced degrees within your salary range. It is undoubtedly an employer’s market.

The second reality is that your competitors are going back to school. When the economy rebounds, they will be poised to leapfrog ahead of you in work, promotions, and pay. The decision to go back to school may be difficult for you if you have kids or need to work simultaneously. But luckily, you have options that may fit in with your busy life better than attending a traditional campus university. In today’s world, for-profit universities with evening and online courses have become a mainstay.

What Are For-Profit Colleges & Schools?

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.

For-profit universities and schools usually fall into one of several broad categories. One such category includes schools that provide what most people would associate with colleges, such as degrees in business, criminal justice, medical fields, and education. These schools offer associates, bachelor’s, and master’s degrees no different from your local state university, though most are virtual schools that provide their education online. Some have both online classes and physical locations.

The other category includes schools that provide education and training in technical fields, such as nursing, dental assistance, or air conditioning repair. These schools are often considered to be vocational or trade schools, and because of the hands-on nature of the training they provide, these schools usually have physical campuses or locations.

Some examples of for-profit schools include:

  • DeVry University
  • Colorado Technical University
  • Webster University
  • Kaplan University
  • University of Phoenix
  • ITT Technical Institute

online school

Advantages

There are a number of advantages to attending a for-profit university – especially if you are a parent, or if you live far from a college campus.

1. No Entrance Requirements

Schools such as Kaplan University or University of Phoenix have a market sweet spot. They not only cater to people who have kids and families, but also to individuals who had no interest in attending college when they graduated from high school – and likely would not have been accepted, even if they had wanted to go.

Traditional schools have entrance requirements. If you are a 30-year-old who wishes to attend a state university to obtain a bachelor’s degree, you still must have earned a certain GPA in high school – plus, you have to take the SAT if you wish to earn an undergraduate degree, or the GRE or GMAT to qualify for a graduate program. At a for-profit school, however, such requirements do not exist. You simply need a high school diploma or GED, a computer with Internet access (for some schools), and the desire to succeed.

There are many people who want to go back to school, but did not do well in high school, or do not want to take exams such as the SAT. If for-profit schools were not available, this segment of the population would have no recourse for additional education. In the last 10 years, millions of Americans have furthered their careers because of the education they have received from for-profit institutions.

2. Schedules Are Flexible

If you plan to earn a degree that does not require hands-on training, for-profit schools offer more flexibility than traditional colleges or universities. Many offer online degree programs, which allow students to work full-time while attaining their degree. If you are not working, you can still look for employment aggressively without the fear that your school schedule may conflict with a new job. You do not have to worry about getting days off to attend classes – you can attend online at night, or catch the recordings on the weekends or on your day off. Many schools also offer accelerated graduate degree programs, which allow you to earn your degree sooner.

3. Real World Focus

When most people think of going back to school, they think of college. They think of bachelor’s or graduate degrees, but some people do not want to go to college and waste time on general education requirements when they have no bearing on a present or future career. In fact, plenty of professions require training that can’t even be obtained from a traditional university or community college. No matter how many doctors, lawyers, teachers, or businessmen we have, there will always be a need for people to fix our cars, clean our teeth, or provide support work for doctors and hospitals. For-profit schools provide the opportunity for education and training in these areas. Traditional schools usually do not.

But even people looking for a traditional degree may prefer a for-profit school to a traditional college. Why? For-profit schools employ professors who are actively working in the field they teach. The coursework and discussions are less philosophical or conceptual, and more geared toward what you will face on the job. These schools aim to teach you the information you need in as short a time as possible.

For instance, a full-time course load at a traditional school consists of 12 to 15 credit hours per semester. A student will typically have two semesters and then a summer break. Online universities have a full-time schedule of six to eight credit hours per semester, with each semester lasting 8 to 10 weeks. Since semesters are shorter and there are no summer breaks, you can graduate sooner from a for-profit school.

Disadvantages

There are downsides to for-profit universities too. That said, almost any disadvantage you may encounter from a for-profit university could also be faced at a traditional school.

1. Accreditation May Be Questioned

One of the most important aspects to any college education is whether the degree you earn will mean anything to employers (or other schools, if you decide to transfer or pursue graduate level studies). Will prospective employers dismiss your degree if you earned it from a for-profit school?

Most likely they will not – as long as the school you attend is accredited. However, if you earn a degree from a non-accredited school, your credentials may be doubted. Furthermore, a non-accredited school is more likely to go out of business in the future, and it could be extremely embarrassing to have a degree from a school that is no longer in business.

The two types of accreditation are national and regional. National accreditation focuses on vocational fields, while regional accreditation is the gold standard across vocational and academic fields. When looking into schools, you must be specific when asking about their accreditation. Many will say they are accredited, but do not disclose to you whether it is a national accreditation or a regional one – and even if a college has regional accreditation, there is no guarantee that another college will accept transfer credits.

Generally, credits obtained from a regionally accredited school do transfer; however, credits from a nationally accredited school most often do not transfer. If you earn a degree from a nationally accredited school, it will generally not be recognized by a traditional four-year university, which means you will be limited to pursuing any advanced studies at a for-profit school.

You should investigate accreditation at any school you consider attending, whether it is for-profit or not. Remember, some online schools that are newer try to bypass the time and cost of obtaining regional accreditation in an effort to get started quickly. Do not pay for their haste.

2. Poor Fiscal Strength Can Be Disastrous

When dealing with for-profit schools, especially small ones, pay close attention to their fiscal strength. I had a friend who was taking classes to obtain a helicopter pilot license, and the school went out of business before he could finish his program. Do all you can to avoid this type of mishap.

If a school is too new or too small to have a strong financial foundation, then unforeseen events could shut it down. And if the school goes out of business while you are taking a certificate program, there will not be any credits to transfer. In other words, you may find yourself starting your program all over again elsewhere.

Schools will not directly disclose their financial situation to prospective students; however, determining the financial strength of a school is part of the accreditation process. You can contact the school’s national or regional accreditor or review the accreditor’s website to garner more information about the stability of the school.

3. There May Still Be a Negative Stigma Attached to Online Degrees

Like online dating, there once was a negative stigma attached to online degrees. Employers did not respect them, nor did they consider such institutes to be “real” universities. Fortunately, those attitudes are mostly gone. If you get an MBA from University of Phoenix, it is generally respected in the workplace – in fact, so many people attend online schools that traditional universities are now trying to catch up to schools such as Kaplan and Phoenix. That said, some employers still prefer traditional degrees to ones earned at a for-profit institution.

attending an online school can be perfect for parents

Costs

In the past year, members of Congress have held hearings and investigations regarding the high cost of for-profit schools. For-profit schools are all private schools, so they are often as expensive as many traditional private universities. Tuition for online universities can range from $20,000 per year to as much as $42,000 per year for a school like Full Sail University. Make no mistake – you will almost certainly need to take out loans to pay for school, and you will owe a lot of money when you graduate if you get a bachelor’s or master’s degree.

If you can get accepted and do not need to work full-time, then you are likely better off attending a state university. However, if you are like most people who attend online schools – those who have to work, have kids, or cannot get accepted to a traditional university – then attending an online school may be your best option.

Final Word

Whether a school is for-profit or non-profit isn’t as important as whether it has the program you want, regional accreditation, and financial stability. What distinguishes for-profit schools from traditional schools is that, like any business, they must respond to the needs of the marketplace.

If you need to go back to school, but have bills and family to tend to, attending a for-profit school is likely right for you. The flexibility and technology allow you to work and travel, yet never miss a class session.

Have you attended a for-profit school? Would you recommend it to others?

(photo credit: Bigstock)

Kiara Ashanti
Kiara Ashanti is a former financial advisor, securities trader, and writer in Central Florida. He has written for Black Enterprise Magazine, Active Trader Magazine, and Atlanta Post, and has even appeared on The Oprah Winfrey Show. Kiara covers the areas of business, investments, and personal finance.

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  • http://www.oddcents.com/ Dannielle @ Odd Cents

    The key to these schools is to find the ones that are accredited. The MBA that I’m doing now is with the University of Wales in the UK. It was accredited, reasonable (in terms of other MBA programmes) and I am working full time.

  • Adam

    Great article! For profit schools are an interesting business investment. I believe that new for profit private schools are arising in nyc!

  • http://www.facebook.com/burt.walker.90 Burt Walker

    Excellent article. As a father who has one daughter becoming a senior in college and another about to begin her first year in college, I’ve been challenged lately by the suggestion that getting a college degree isn’t worth it. No, it’s not a guarantee for a job now, but it will certainly put you ahead of the game when things recover–and adding advanced education will only make you more marketable.

  • Chris Sanchez

    Kiara,

    That is probably the most balanced approach to this topic I have seen. There is definitely a palce in the market for these schools. Accreditation is the key. As long as the school has received their accreditation from one of the six regional accrediting bodies, the student should be fine. It would seem that schools with national accreditation continue to have a stigma about them.

    The bottom line is that there are education options available for nearly every student who desires to pursue higher education. Nice article!

  • Struggling to Graduate

    I would not recommend a FOR-PROFIT school. You will be in more debt than the can handle before you even graduate. And you will basically have to fund your entire senior year out of pocket because the school has eaten up all of your grants and scholarships to pay themselves first.

  • Jess

    Very good article! And it’s very true, community colleges and local Universities now have online classes. Time has changed because most of the for profit schools have entrance exams. To get accepted, one must pass the entrance. Every employer should respect online degrees as long as the school is accredited. Only degrees are real and most people work really hard for them.

  • Jess

    Very good article! And it’s very true, community colleges and local
    Universities now have online classes. Time has changed because most of
    the for profit schools have entrance exams. To get accepted, one must
    pass the entrance exams. Every employer should respect online degrees as long
    as the school is accredited. Online degrees are real and most people work
    really hard for them.

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