Introduction: What Are Nonprofit and For-Profit Online Colleges?
You’re probably asking, “Which is the better choice?” Before we can say the answer, it’s a good idea to make a nonprofit vs. for-profit online colleges comparison. But let’s define what each of these institutions are.
A nonprofit college exists to provide quality education for all. Instead of profits, it focuses on the achievement of its service-oriented mission.
A for-profit college focuses on financial gain for distribution to its owners/investors. But it doesn’t mean that their quality of education is far inferior. Many for-profit colleges offer quality education, too. Indeed, these colleges offer career-focused programs for working professionals and adult learners.
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Here’s a brief side-by-side of nonprofit vs. for-profit online colleges comparison.
| Nonprofit Colleges | For-profit Colleges | |
| Primary mission | Provide quality education and positive learning experiences | Provide quality education, too, but profit-making comes first. |
| Quality of education and college experience | – Known for excellent academics – Prioritize investments for innovations and improvements in facilities, instruction quality, and extracurriculars. | Prioritize financial gain over improvements in quality education |
| Tuition and fees | – More affordable costs – Better financial aid opportunities from diverse sources. | – More expensive tuition and fees due to reliance on these revenue sources – Limited financial aid opportunities |
| Academic programs | – Broad range of academic programs, from arts and sciences to STEM – More focus on research and innovation | More focus on career-centric programs, such as healthcare |
| Accreditation | – Regional accreditation – Nationwide recognition – Easier transfer credits process – More financial aid options. | – Either regional or national accreditation. The latter is also acceptable. – There could be issues with transfer credits, financial aid, and institutional stability. |
| Funding sources | – Tuition and fees, state and federal subsidies, endowments, grants, and donations. – Note that tuition and fees are only a small part of funding | – Tuition and fees, grants, and donations – Heavy reliance on tuition and fees for funding purposes |
| Admission process and completion rate | – More rigorous standards and processes – More selective admission rate – Higher completion rate (63%-68%)due to affordable tuition and student support | – Less rigorous standards and requirements – Higher admission rate – Lower completion rate (29%) due to more expensive costs. |
| Governance | Board of Trustees with greater accountability | Owners and investors, such as large corporations. |
How Do Tuition Costs Differ Between Nonprofit and For-Profit Colleges?
Public nonprofit colleges usually charge in-state and out-of-state tuition. Resident students qualify for the more affordable in-state tuition. Non-resident students pay higher tuition.
This is so because public institutions receive government subsidies for higher education. In-state students then enjoy discounted tuition. Both in-state and out-of-state students, however, can apply for financial aid.
Private nonprofit colleges typically charge higher tuition and fees. The main reason is the lack of state government subsidies for higher education. But students can find substantial, if limited in number, financial aid packages.
Note that private nonprofit colleges operate as businesses. Students bear the burden of increases in operational costs, among others.
Between public and private nonprofit colleges, public colleges are typically more affordable. If you’re a budget-conscious student, you know where to go.
Why Nonprofit Online Colleges Are Generally More Affordable
Affordability is foremost of the nonprofit college benefits that attract students. This is true even with private colleges that usually charge higher tuition than public colleges.
Here are the reasons why public and private nonprofit colleges make it possible.
Mission-driven focus
Every surplus dollar isn’t considered a profit for distribution. Instead, it’s reinvested into campus and education improvements. There’s no profit motive involved.
Diverse funding sources
State subsidies for nonprofit colleges keep costs down. Endowments, donations, and grants fund operations and scholarships. These additional funding sources mean students enjoy lower tuition.
Students also have a wider range of scholarships and grants to choose from. Alumni contributions are among the sources of financial aid.
Tax exemptions
Nonprofit colleges usually have tax-exempt status. Their tax savings mean students enjoy lower tuition fees.
Efficient cost management
Even with diverse funding sources, nonprofit colleges emphasize a lean-and-mean cost management approach. Unnecessary expenses, such as marketing, are eliminated. Efficient cost management keeps tuition costs down.
Stricter regulation and accountability reinforce efficient cost management, too. Staff and management are held to higher standards.
On a related note, many for-profit colleges were criticized for their predatory practices. The University of Phoenix, DeVry University, and ITT Technical Institute are foremost examples.
For-profit college expenses aren’t limited to high tuition and fees either. Hidden costs, including additional charges, result in a significant increase in total costs.
Here are a few of these hidden costs.
- Technology fees cover the costs of software, learning management systems, and technical support.
- Assessment fees are for credit transfers, proctored exams, and competency assessments.
- Administrative fees cover many admission-to-graduation expenses.
- Laboratory fees are common in healthcare programs
- Textbooks and course materials, including specific software and apps
- Payment plan fees cover fees related to installment tuition plans
- Service fees are for extras, such as library access, ID cards, and transcript requests
- Residency fees, such as travel and accommodations for on-campus residencies
Nonprofit colleges also impose these fees. But there’s more transparency and accountability for their imposition. There’s also less motive to increase fees, thanks to subsidies and donations.
These hidden costs add up over the years, too. A $50 technology fee per course, for example, can add up over four years. Recurring fees also creep up on you, so to speak. Payment plan fees and interest on student loans also accumulate.
In some cases, these aren’t hidden per se but stated on your bill. But many of these hidden fees are lumped together. If necessary, ask for an itemized bill. You may be able to question their validity and skip paying them.
Scholarship and Financial Aid Opportunities at Nonprofit vs. For-Profit Colleges
Both nonprofit and for-profit colleges offer scholarships, grants, and other financial aid opportunities. But their types and availability can differ.
Nonprofit colleges usually have a wider range of financial aid opportunities. Students can also receive higher financial aid amounts. Indeed, many Ivy League schools enable low- to moderate-income students to earn degrees as scholars.
These are among the available financial aid opportunities at nonprofit colleges:
- Institutional scholarships based on need, merit, and athleticism, among other criteria
- Endowments and alumni donations for scholarships and grants
- Federal and state student aid, such as Pell Grants, Cal Grant, and the Tennessee Promise
- Work-study programs
- External scholarships
- Employer tuition reimbursement or assistance programs
For-profit colleges also offer these financial aid opportunities but with more limitations. Institutional scholarships aren’t as common and significant in amount. Federal and state student aid are less accessible, too. Students can borrow private loans, but these have prohibitive terms.
Regardless of your choice in college, follow these tips to maximize financial aid.
- Always file your FAFSA regardless of your current financial status.
- Research your financial aid opportunities as early as possible.
- Understand the eligibility criteria, application requirements, and important deadlines.
- Ask current students and alumni for leads and insights into the financial aid process.
- Work with a financial aid officer to navigate financial aid policies.
- Use official resources and online scholarship search engines.
Most importantly, use your financial aid money for its intended purpose.
Case Studies: Comparing Real-World Tuition Costs
Here’s a tuition costs comparison between prestigious nonprofit colleges.
These are the best public, nonprofit colleges and their in-state average tuition and fees. Financial aid opportunities are available.
| University of California, Berkeley | $15,891 |
| University of Michigan, Ann Arbor | $17,786 |
| University of Virginia | $22,323 |
| University of North Carolina at Chapel Hill | $8,998 |
| University of Texas at Austin | $11,698 |
| University of Florida | $6,381 |
| University of Wisconsin-Madison | $11,205 |
| Ohio State University | $12,485 |
| University of Washington | $12,643 |
| University of Illinois at Urbana-Champaign | $17,766 |
These are the best private nonprofit colleges and their average tuition and fees.
| Brown University | $68,230 |
| California Institute of Technology | $63,255 |
| Columbia University | $65,524 |
| Duke University | $66,172 |
| Georgetown University | $65,082 |
| Harvard University | $59,076 |
| Johns Hopkins University | $63,340 |
| Massachusetts Institute of Technology | $60,156 |
| Princeton University | $59,710 |
| Stanford University | $62,484 |
Don’t be intimidated by these high figures. All these universities meet 100% of students’ demonstrated financial needs. Many also apply a sliding-scale tuition structure, such as Harvard and Brown. Low-income students don’t have to pay tuition. Most use a need-blind admissions policy, too.
These are 10 well-known private for-profit colleges and their average tuition and fees.
| University of Phoenix | $9,552 |
| DeVry University | $17,488 |
| Capella University | $14,148 |
| Strayer University | $13,515 |
| Grand Canyon University | $17,800 |
| American InterContinental University | $40,550 |
| Walden University | $10,964 |
| University of Arizona Global Campus (UAGC) | $13,160 |
| South University | $17,014 |
| Full Sail University | $26,217 |
Your nonprofit college savings will depend on many factors. The base tuition is a primary factor – the lower it is, the higher the savings. Your financial aid package will reduce your cost of attendance, too. Apply for financial aid that covers direct and indirect costs.
Often, for-profit college tuition is equal to or less than nonprofit college tuition. But remember that financial aid options may be more limited, too. You must also consider crucial factors beyond the cost of education. Academic rigor, college reputation, and industry acceptability are major factors.
These online college tuition differences aren’t the be-all and end-all of your choice. But since cost is a significant barrier, these can be your primary factor. Consider affordable online colleges first, but look at other nonprofit options, too.
Tips for Choosing the Right Online College for Your Budget
Tuition-paying tips are well and good. But you must start with affordable tuition in the first place.
- Make tuition comparisons between the online schools you’re interested in. Beware of hidden costs.
- Determine your eligibility for financial aid. Consider every possible financial aid, even when it seems far-fetched.
- Look into transferring credits earned from prior learning. These include associate degrees, professional certifications, and military training.
- Look for tuition discounts in addition to financial aid. Military and employee discounts are common.
Ask relevant questions, too, including:
- What’s the composition of tuition and fees?
- What are the available financial aid options?
- What financial resources are available for students?
- What are the policies on transfer credits?
- What are the graduation learning outcomes and return on investment?
Remember that asking questions is your right. Be sure to take down notes, too, so you don’t have to return for more information.
Conclusion: Making an Informed Decision
In conclusion, nonprofit colleges are the more affordable option than for-profit colleges. The combination of reasonable tuition and generous financial aid makes affordability possible. Nonprofit colleges are also excellent choices for quality education and experiences.
But don’t take our word for it either. You must still consider other crucial factors in your decision-making process. Your interests and goals are also crucial.