Public, Private Nonprofit and For-Profit Colleges: What’s the Difference?
The type of college isn’t a verdict on its quality. But it tells you who owns the school, where its money goes and which questions to ask first.
U.S. colleges fall into three broad groups. The label won’t tell you whether a program is good, but it helps explain how the school is funded, who it answers to and what to check.
The three types
| Public | Private nonprofit | Private for-profit | |
|---|---|---|---|
| Who runs it | A state or local government | An independent board of trustees | A company, often owned by investors |
| Where revenue goes | Back into the institution, with state funding | Back into the institution | Can be paid out to owners or shareholders |
| Typical funding | State support, tuition, grants | Tuition, donations, endowments | Mostly tuition, much of it from federal student aid |
| Examples | State universities, community colleges | Many liberal arts colleges and research universities | Career colleges and online universities |
Why the for-profit sector draws extra scrutiny
For-profit colleges serve many working adults and offer flexible schedules, and some do it well. The sector has also been at the center of some of the largest collapses and enforcement actions in higher education:
- Corinthian Colleges closed its remaining campuses in 2015.
- ITT Technical Institute shut down all of its campuses in 2016.
- University of Phoenix agreed in 2019 to a $191 million settlement with the Federal Trade Commission over allegedly deceptive advertising, including $50 million in cash and $141 million in debt cancellation.
None of that means a particular for-profit school is bad, just that it’s worth checking outcomes carefully before you enroll.
Note: If your school closes while you’re enrolled, or within a set period after you withdraw, you may qualify for a closed school discharge of your federal student loans. Keep copies of your enrollment records and transcripts in case you need them.
How to compare any school
- Confirm accreditation for the school and, where relevant, the program. See college accreditation explained.
- Compare outcomes in the College Scorecard: graduation rates, typical debt and graduates’ earnings. Our College Scorecard guide explains how.
- Compare the total cost, not just tuition. Community colleges often cost far less for the first two years.
- Check transfer agreements if you might move on to another school.
- Ask the right questions before signing anything; here’s our list for admissions representatives.
In brief
- Public colleges are run by states or local governments; private nonprofits reinvest revenue; for-profits are owned by companies or investors.
- Every type includes strong and weak schools, so compare outcomes rather than labels.
- Large for-profit chains such as Corinthian Colleges and ITT Tech closed in 2015 and 2016, stranding students.
- If your school closes while you’re enrolled, you may qualify to have federal student loans discharged.
Readers ask
Are for-profit colleges accredited?
Many are, by recognized accreditors, and their students can use federal aid. Check accreditation the same way you would for any school.
Do community colleges count as public colleges?
Yes. Most community colleges are public two-year institutions, often with the lowest tuition and transfer agreements with state universities.
What’s a closed school discharge?
If your school closes while you’re enrolled, or shortly after you withdraw, you may be able to have your federal student loans for that program discharged, as long as you don’t complete it through a teach-out or transfer of credits.
Admission rules, accreditation status and licensing requirements change. This guide is general information for students in the U.S.; confirm the details with the school, its accreditor or your state licensing board before you enroll.