The Advantages of Attending a Nonprofit College

Beyond looking at cost and convenience, prospective students should consider an institution’s educational goals, financial structure, governance model and outcomes data to help determine the best fit

Choosing a college is one of the most significant investments a student will make – financially, academically and personally. What many prospective students and their parents may not necessarily take into account when making the big choice is whether or not potential schools are for-profit or nonprofit in status.

It might be a factor worth considering, however. While both types of institutions offer degree programs and can serve students’ educational goals, their underlying financial structures, governance models, and outcomes data reveal meaningful differences.

Serving Shareholders or Students?

At the most basic level, the distinction between nonprofit and for-profit colleges is financial.

For-profit colleges operate as businesses. Their revenue beyond expenses may be distributed to investors, shareholders or owners. These institutions are structured to generate profit, even while delivering educational services.

Nonprofit colleges, in contrast, reinvest any surplus revenue back into the institution – improving academic programs, student services, facilities and scholarships. They are governed by boards of trustees who are legally responsible for stewarding the institution’s mission rather than maximizing financial return.

“Your end game, what you measure, and what you’re holding yourselves accountable to is fundamentally different,” says Lindsay Knox, vice president for enrollment, advancement and marketing at George Fox University, which is a nonprofit institution. “A nonprofit’s board is shepherding the mission – making sure you are leaning into the things that you say you’re going to do in your mission. A for-profit company’s board has some sort of investment or stake in the amount of profit that the company is producing.

“I’m not saying that for-profit companies aren’t mission driven, because certainly they are – they can be. But part of what they’re trying to do is turn a profit and put money back in the pockets of the people who invested.”

Ultimately, that fundamental difference shapes priorities. In a nonprofit model, financial health supports student outcomes. In a for-profit model, student enrollment supports financial outcomes.

Graduation & Retention Rates: A Significant Gap

Perhaps the most compelling evidence favoring nonprofit institutions is found in student completion data. According to a 2022 National Clearinghouse for Education Condition of Education report:

• The overall six-year graduation rate for first-time, full-time students seeking bachelor’s degrees at four-year institutions was 64%.
• At public institutions, the rate was 63%.
• At private nonprofit institutions, the rate was 68%.
• At private for-profit institutions, the rate was just 29%.

In short, students at private nonprofit colleges were more than twice as likely to graduate within six years compared to students at private for-profit institutions.

Retention rates* tell a similar story. The same National Clearinghouse report found that for students entering four-year institutions in the fall of 2019:

• Retention at public four-year institutions was 82%.
• Retention at private nonprofit four-year institutions was 81%.
• Retention at private for-profit four-year institutions was 63%.

*Retention rate is the percentage of first-time, first-year undergraduate students who return to the same institution for their second year.

“ If the graduation rates have a 20-percentage-point difference between them, that’s highly significant”, Knox says. “I think the question is, ‘Why is this the case? There must be something going on with the student experience or the number of students they’re admitting, or the kind of students they’re attracting. I don’t think you could definitively say that the student experience is poor at a for-profit university, but there must be factors at play [when you look at these numbers].”

Her point underscores a critical truth: College is not merely about enrolling – it’s about completing. Students who borrow but never finish their degree are left with debt but no credential. The risk of non-completion is statistically higher at for-profit institutions.

Academic Breadth and Research Culture

The College Board, a not-for-profit organization that develops and administers the SAT and Advanced Placement (AP) programs, notes that nonprofit institutions frequently emphasize research, scholarship and academic breadth. Many long-established nonprofit universities see themselves not only as teaching institutions but also as centers of knowledge creation.

“A nonprofit university, especially one that has existed for a long time and has an emphasis on scholarship, is going to be a more robust and complex place where not only is learning happening, but original thought is happening,” Knox says. “And there’s space and funding for that at a nonprofit because it’s actually a priority and an expectation of our faculty that they’re producing original work and progressing their fields forward. It’s going to be really different at a for-profit place because that doesn’t actually translate to any real revenue.”

For students, this can mean:

• Access to research opportunities
• Exposure to faculty who are leaders in their fields
• A richer intellectual environment

As a byproduct, such experiences can strengthen preparation for competitive graduate programs.

Accreditation and Credit Transfer

Accreditation is another critical consideration. While both nonprofit and for-profit institutions may hold accreditation, nonprofit four-year institutions are commonly regionally accredited – the most widely recognized form of accreditation in the U.S.

The College Board notes that credits from nonprofit institutions are more likely to transfer smoothly to other colleges. Students considering graduate school, professional programs or transferring institutions should pay careful attention to accreditation status and transfer policies.

Knox also notes that undergraduate institutional reputation can matter when applying to competitive graduate programs in fields such as medicine, psychology, nursing or physician assistant studies. While the stigma is not universal, historical controversies surrounding certain for-profit institutions have shaped perceptions in some sectors.

Financial Aid and Long-Term Cost

At first glance, some for-profit colleges advertise lower per-credit tuition or accelerated timelines. However, cost must be evaluated holistically.

The College Board points out that nonprofit colleges often offer more robust financial aid packages, including institutional scholarships and endowment-supported grants. Sticker price may not reflect actual net cost.

It’s the reason Knox cautions against focusing solely on upfront tuition. “ What really matters is not the per-credit cost, but what that actually buys you in the long run – how often students are finishing, and what outcomes they’re achieving,” she says.

If graduation rates are lower, total cost can increase due to extended enrollment or attrition. The greatest financial risk occurs when a student leaves without completing a degree.

Student Experience and Mission Alignment

Nonprofit institutions frequently articulate mission-driven commitments beyond job training alone. For example, at George Fox University, our mission emphasizes preparing students to “think with clarity, act with integrity, and serve with passion.”

Knox explains that nonprofit accreditation bodies require measurable evidence that institutions are delivering on their stated mission. Boards of trustees are accountable for ensuring that strategic decisions align with educational and ethical commitments.

Because nonprofits do not distribute profits to investors, surplus funds can support:

• Academic program development
• Student support services
• Campus facilities
• Scholarships and aid

While for-profit colleges may offer flexible scheduling and career-aligned programs – particularly attractive to working adults – nonprofit institutions often balance career preparation with broader intellectual and character development.

“So if our mission is to graduate students who think with clarity, act with integrity, and serve with passion, that’s what we’re measuring,” Knox says. “That’s what our board and the Northwest Commission on Colleges and Universities, our accrediting body, is asking us constantly – about how we’re accomplishing those things. That is our key metric for being able to say that we are growing or not growing, or moving those things forward or not.

“What you measure matters. Financial health is a piece of that because we want to be financially healthy enough to make sure that those things are well-funded, but we’re not trying to be well-funded to be well-funded or to get everybody a dividend. That’s something we can’t do.”

Ethos and Core Mission

The distinction between nonprofit and for-profit colleges is more than technical. It reflects a difference in priorities, governance and measurable student outcomes. In addition to the retention and graduation rates mentioned previously, it’s important to consider the ethos of a place and its core mission.

Beyond statistics, nonprofit colleges offer:

• Mission-centered governance
• Reinvestment of revenue into student services
• Broader academic offerings and research engagement
• Greater institutional stability
• Stronger credit transfer and graduate school recognition

For students weighing their options, the central question may not simply be, “What is the cheapest or fastest route?” but rather, “Where am I most likely to enroll, persist and graduate with meaningful outcomes?”

For many students, the data and structural realities suggest that nonprofit colleges provide a stronger foundation for long-term academic and professional success.