How to Vet a For-Profit Online Program

Explore your options and create a budget before you commit to a for-profit online program.

For-profit online programs can have their benefits and drawbacks, depending on which one you choose.
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Napoleon Melton Jr., 30, never imagined he would receive a degree from a for-profit university. From his senior year in high school on, he had daydreamed about earning an MBA from a traditional program.

But when the time came to apply to graduate school, he realized his options were limited. His low GPA and less than stellar test scores led to a slew of rejection letters from his first-choice schools. A for-profit university suddenly seemed like a viable option.

"I knew it was a very big decision in my life and I owed it to myself to put myself in the very best position," he says.

In the end, he went with the online MBA program at the University of Phoenix – a choice he stands by.

[Discover tips to succeed in an online course.]

The strongest proprietary schools offer a range of benefits, including flexible course offerings, close ties with business leaders and technology investment, says Kevin Kinser, associate professor of education at the University at Albany—SUNY.

But buyer beware: Some for-profit schools have been chastised for high dropout rates, poor job placement and dubious recruitment practices. Students should consider programs carefully to avoid graduating with a mountain of debt – or worse yet, not graduating at all.

Not all proprietary online schools are alike, experts say. And if you've done your research and know what you are getting yourself into, a for-profit online program could be the right fit.

[Learn why for-profit students may earn less than their peers.]

Before signing on the dotted line, take the following steps.

1. Investigate the true cost of the program: "For-profits are almost always going to be more expensive than other options," says Kinser.

With that in mind, students should do some major number crunching before they enroll. Experts suggest drafting a budget reflecting the actual cost of your program, including the price per credit hour and the cost of books, support, technology and other necessities.

"A lot of students fall into the trap of focusing only on the cost per credit hour and that's not comparable," says Betty Vandenbosch, provost at the for-profit Kaplan University, which offers online and on-campus programs.

As students create their financial plan, Vandenbosch suggests exploring what scholarships are available, as well as whether it's possible to receive additional credits for academic or professional work completed before the program.

Finally, experts say, it's important for prospective students to research their probable salaries after graduation and assess whether they will earn enough money to pay off their loans.

"You want to be realistic about your finances and what kind of job you need to get coming out of this program to support the loan payments you expect to have after graduating," says David Deming, an education and economics professor at Harvard University.

[Learn how to tell a good online program from a bad one.]

2. Explore your options: Before you commit to a for-profit online program, make sure you've spent plenty of time looking at alternatives, experts say.

"You have a lot of options," Deming says. "A lot of community colleges offer online or partially online programs. You don't want to just go with the place you see advertised on the subway. You want to do your homework."

When you're looking at different schools, be sure to compare career services departments and ties to the industry in which you hope to work. It's also smart to check how many graduates of the proprietary college you're considering are employed after graduation, experts say.

Deming suggests reviewing the U.S. Department of Education's gainful employment data to learn more about your likely financial outlook after graduation.

3. Check for accreditation: To help ensure that the for-profit school you are considering is reputable, experts suggest checking to see whether it is regionally accredited.

"Accreditation is the way the higher education industry determines whether an education is valid," says Albany's Kinser.

If you have any doubts about the legitimacy of the accreditation agency, make sure it is recognized by one of two authorities on the matter: the Council for Higher Education Accreditation or the Department of Education. The latter has a College Navigator tool allowing students to verify the accreditation of any school they may be considering.