You may have noticed that for-profit colleges–those career or trade schools who you see advertised on television–do not get a lot of facetime here at the Pay for College Blog. I usually focus on traditional non-profit private and public colleges and universities, instead.

However, I recently came across a new debt report from FinAid.org’s Mark Kantrowitz, and wanted to share its findings with you.

(If you’re not sure which types of schools fall into the “for-profit” category, you can see Wikipedia for a long list of these for-profit colleges, whose ranks include schools like ITT Technical Institute, Westwood College, and DeVry.)

A Numbers Game

As you may have guessed from the this post’s title, profit for schools seems to translate to much more extreme debt for students. According to Kantrowitz’s report, nearly 30% of seniors at these schools already had $40,000 in debt, as compared with only about 10% of non-profit college attendees.

Default rates have come into play as well. The federal government recently released a report regarding student loan default rates for those whose loans came due in 2007. Their study indicates that already over 200,000 student borrowers with a 2007 due date have gone into default–and the schools with the highest default rate were for-profit colleges.

Benefits of Non-Profits

For most students, a non-profit or “traditional” college or university will probably be a better option for several reasons.

First, when it comes to financial aid, both public and private non-profit schools offer their own grants and scholarships in addition to the federal aid available to students. For-profit schools rarely give out scholarships of their own, as it is simply not lucrative for that type of business model.

Second, and in my opinion just as important, traditional colleges tend to offer more room for exploration and growth during the defining college years in a student’s life. For-profit colleges tend to lock students into one career trajectory, while non-profits generally allow them to explore numerous fields to help ensure they choose an appropriate career path based on their given skills and interests.   In the end, the exploration process can also save parents on the cost of college if students don’t end up going to school to get the schooling necessary for multiple professions.

To sum up, most students coming out of high school will more than likely fare better in the non-profit environment both from the standpoints of curricula offered and debt level at graduation.

All the best,
Deborah Fox

photo: chriz-home’s Money 10$ Bill