Nonprofit Colleges Are More ‘Profitable’ Than For-Profits, Report Says

Nonprofit colleges have higher "profit" margins than their for-profit peers, according to a report that compares the sectors’ per-pupil spending and revenue. The report, by the libertarian Cato Institute, estimates that the average private college makes $12,800 per undergraduate — double the margin of the for-profit University of Phoenix — while the average public college makes $11,000.

Although that revenue does not go to shareholders, as in the for-profit sector, some of it subsidizes programs that do not directly benefit undergraduates, such as research and graduate education.

The report recommends shrinking the federal student-aid system to end the "massive transfer of wealth from the taxpayer to the industry."

THE CHRONICLE OF HIGHER EDUCATION

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