What’s a non-profit?

When you’re looking for advice about student loans, how can you tell whether you’re being told something – or sold something?

One of the first things you can do is to check whether the people giving you the information may be out to make money from you. In other words, are they a non-profit organization or a for-profit business?

In a for-profit business, any money the company makes (after paying for its expenses) goes to the owner or owners. For example, a test prep company that charges by the hour has an internal conflict because it’s better for the owners if you spend more time with them, even if you personally may not need it. For profit colleges also have this conflict, as any money the owners spend on providing an education to their students is money they could otherwise keep for themselves.

On the other hand, a nonprofit organization is allowed to earn money and may be profitable, but instead of the earnings going to a group of owners, they go back into the organization – for the purpose of providing a public good. An example of this would be a museum gift shop that makes money, but any profits it makes go to supporting the museum. Similarly, most universities make money on tuition, but they use those earnings to pay for faculty and other costs.

Some questions you should ask about student loan information you find on the internet:

Is the source a government organization like the Department of Education or the Consumer Financial Protection Bureau? – Government sites work very hard to provide reliable information on financing college, so you will find them trustworthy.

Is the source or the site created by reputable people who are qualified to provide information? – Check in the “about us” section to learn who’s behind the organization and then go deeper (check names, sources) until you’re satisfied.

Is the organization a nonprofit or a for profit company? – This is important because organizations that want to make money off you may have mixed motives.

What does the organization do with the information you provide to them? – Some organizations provide good information, but earn money by selling mailing lists, or by advertising on their sites. This advertising may influence or even directly contradict other information on the site! Don’t get fooled by advertisements that look like content, and don’t provide your personal information unless you are sure the benefits to you are worth it. Pay special attention to scholarship sites that collect your information or charge a fee, or don’t deliver.

Some information about College Money Matters:

We do not sell your information to make money, but we are obviously not responsible for what happens on sites we don’t control. We provide links to sites we think provide good information, but you need to be alert to how those sites use your information.

We are not giving you financial advice on this site. Your financial decisions should be made based on your individual situation.

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When you’re looking for advice about student loans, how can you tell whether you’re being told something – or sold something?