Proprietary colleges

Proprietary colleges are for-profit colleges and universities. They are operated by their owners or investors, rather than a not-for-profit institution, religious organization, or government. Because they are not funded by tax money, their long-term sustainability is dependent on the value they provide relative to the perceived value of a degree from a higher educational institution overall. The increased reliance on federal student aid funds by these "for-profit" schools is of growing concern. Since federal student loans are typically guaranteed by the government, for-profit colleges can reap a profit from taxpayers even if students drop out after enrolling, do not complete a degree, or the degree turns out to be nearly worthless for future employment. Students can be stuck with large and unmanageable debt loads, defaulting at a significantly higher rate than students at traditional non-profit institutions. Non-profit institutions generally depend in part on academic excellence and creating graduates that succeed in their fields, while for-profit schools are often based on attracting large numbers of students with few requirements in terms of academic qualifications for entry because federal loans are provided for good and bad students alike. Some institutions in this category are regionally accredited, while many others are not. Sometimes a proprietary college may also overlap with the sector of non-degree granting business colleges.

Traditionally, a common argument against for-profit universities has been that the science and theory behind the learning technique is more important than the profit or specific skills gained, thus profit or financial success should not be a motivational factor in education. The argument in favor of for-profit universities has been that a student learning from a professor who has never needed to produce their product or service for profit is ill-prepared for a free-enterprise system. However, as non-profit colleges and universities increasingly utilize professionals and former professionals in their teaching faculties, this distinction has become less significant.

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