7 Reasons to Avoid For-Profit Colleges

Would you go to college if there was a 74% chance that you’d eventually quit, have loads of debt, and still not have a degree?

Of course not–that’d be ridiculous. Unfortunately, that’s the value proposition of most for-profit colleges like University of Phoenix, DeVry University, Capella University, and American National. 

Remember, for-profits are colleges, but they’re also businesses. They differ from non-profits and state schools. And that means they don’t always have your interests at heart.

So here are 7 major red flags to watch out for at for-profit colleges: 

1. BAD GOALS

The first reason is the easiest, and it’s in the name. What’s the goal of a for-profit college? Profit. 

It’s not about learning, students, or making the world a better place. If you go to a for-profit school, you will never be more important to that school than the money you spend there. In a world that should be about education and learning, that’s kind of sad.

2. LOW GRADUATION RATES

The average graduation rate at most colleges is 65%, but the average graduation rate at for-profit colleges is 26%. For example, University of Phoenix has a graduation rate of 28%. About a quarter of their students to go to other schools, and about half just quit. And the numbers are even worse at other for-profits!

Most people who go to for-profits drop out with more debt, less money, and no degree.

3. PREDATORY RECRUITMENT

Since you began thinking about college, how many ads for college has the Internet served you? Probably somewhere north of a million, right? It’s likely that the majority of those were marketing for-profit schools like Capella or Grand Canyon. That’s because the marketing budget for these schools is through the roof.

During a 5-year period around 2012, Phoenix spent $3 BILLION on advertising! And you know what their acceptance rate is? 100%!

So they spend a lot of money to get people in, and don’t turn anyone away.

Why might that be?

 It’s because for-profits aren’t advertising to people who they think will graduate college. They are advertising to people who they think will attend college for at least a few semesters. 

How do I know that? Well, only 26% of students graduate. And colleges keep advertising to the remaining 74%, trying to lure them in with flashy ads and false promises. 

The fact that they don’t test applicants to see if they have what it takes to graduate college—no admissions requirements or anything?—means they’re engaging in predatory recruitment. It’s a for-profit school’s bread and butter. 

Finally, if we look at the numbers closer, for-profits tend to target low-income students. About 73% of University of Phoenix students have low income. Meanwhile, the national average of low-income college students is closer to 45%, which is wild because, as we’ll see in a second, for-profits cost more than other colleges.

4. BAD STUDENT-TEACHER RATIOS

You’re probably wondering: Why do so few people graduate from for-profit colleges? There are many reasons, but one of the biggest ones is the quality of education. One way to measure quality is the student-to-teacher ratio. 15-20 students per teacher at a college is pretty decent. DeVry has 27:1. Capella University has 32:1. American National is 39:1. And Phoenix is 77:1!

That’s less attention for you, busier professors, and worse feedback.

Plus, most of these colleges employ an army of part-time professors so they can pay them less, which means faculty might be less motivated.

5. BAD REPUTATION 

For-profit colleges get a bad reputation in two ways. 

First, their accreditation is usually less strenuous. The institution that’s approving the school is less trustworthy. There’s less oversight, which means there’s less protection against students being put into useless and poorly taught classes.

Second, there is a cultural stigma that for-profit colleges are easier. People associate them with degree mills where you pay to get a degree, do a little busy work, and graduate. While yes, some for-profit colleges are like that (and some regular colleges are like that), that stigma is a painful one to deal with either way.

And because for-profits have a bad reputation and lower accreditation, there’s always the chance that if you ever want to transfer, few other colleges will accept your credits.

There was even an incident recently where a for-profit educational company called Education Corporation of America just declared bankruptcy even though they had 20,000 students. And because ECA had a bad reputation, these 20,000 students couldn’t transfer their credits anywhere else. So they were stuck with debt, bad credits, and no degrees. Going to a for-profit is less safe than going to other schools.

6. WORSE OUTCOMES

Generally, for-profit graduates are less likely to graduate. If they do graduate, they usually make $6,000/year less than their counterparts, and they’re 40% less likely than other students to have a job 3 months after graduation.  

Speaking of which, go to one of these for-profits’ websites and see if you can find anything about career outcomes of their students or percentages about earnings or job placement.

Spoiler alert: you won’t find anything. They don’t advertise their students’ success because they’re having a hard time finding it themselves.

7. MORE EXPENSIVE

Alright, so all of these reasons have been pretty bad…but if for-profit colleges are so bad, they must be cheap, right?

You would think so. You’d expect a cheap muffin mix to be less expensive than a much more delicious muffin mix, right? 

But, no, if you buy your muffins (college credits) at a for-profit, you’re going to spend $13,000 more, and there’s only a 26% chance they’ll show up at your door (a.k.a. that you’ll graduate).

Why would you pay more for something that’s worse? 

At the end of the day, is there anything good about for-profit colleges? 

My theory is that everyone who goes to a for-profit got sucked in by the shiny marketing campaign and didn’t know how to research these red flags. No one ever told them.

So spread the word–and if you want help picking out an actually good college, set up a consultation where we can help you graduate college in under 18 months and for under $6,000.