What's the differences between nonprofit and for-profit? Sometimes, not so much. But sometimes, a lot. Take for example for-profit schools. For-profit schools are about making money. And according to a New York Times editorial, it makes great sense to apply rules to the for-profits that for a variety of reasons, aren't necessary to apply to the non-profit and public. First, some of the facts about for-profit schools.
For-profit schools often hurt the poor by luring them into questionable programs that cost considerably more than comparable courses of study at community colleges.
According to federal data, graduates of two-year, for-profit career training programs average a loan debt of $23,590. By contrast, most community-college graduates owe nothing.
The Department of Education recently reported that, of the thousands of for-profit programs it analyzed, an astonishing 72 percent produced graduates who, on average, earned less than a high school dropout who worked full time. This means that the most debt-ridden students are unlikely to earn enough to ever repay their loans. While students at for-profit colleges are 13 percent of the total higher education enrollment, they account for nearly half of all student loan defaults.
The department’s analysis, which covered both for-profit and nonprofit career programs, found that 98 percent of the students enrolled in the lowest-performing programs are in for-profit schools.
And among the certificate programs most commonly found to be substandard are the ones that typically advertise on buses and subways in cities all over the country, targeting less sophisticated audiences; these include programs that claim to train cosmetologists, medical assistants, paralegals and other fields.
So what makes for-profits so different from non-profits and public schools? I pose that one element is governance. Nonprofits, usually, have caretakers who have one outcome in mind -- success for their constituents -- not personal financial gain. To achieve this outcome, nonprofits have core values and impose a set of standards and often engage third parties to ensure they are following these standards.
Perfect? Perhaps not. Intent on making a positive difference? I believe so. Possible without good governance? No.