The difference is that the percentage of people with that negative end result is MUCH higher. Looking at stats like the default rate for students at for-profits vs non-profits is one indicator.
>It's wrong to think that departments at not-for-profit schools don't have a marketing incentive that is (at best) indifferent to the best interests of the student.
There is definitely some truth in this. HOWEVER, a big difference is that in many cases the interests of the department and the student are more aligned at non-profits than for-profits. The most obvious example is completion/graduation rates. At least at the undergraduate and masters level, there is a strong incentive to select students that are LIKELY to graduate from the program. Bringing in woefully underprepared students who have little chance of finishing the degree seems to be strongly discouraged at the undergraduate and masters level. I cannot speak for the PhD level, since I have little experience in that area.
Contrast that with stories about MULTIPLE for-profit colleges going so far as to target the homeless for recruitment into their universities. In some cases they went so far as recruiting people who DID NOT OWN A COMPUTER to sign up for online degree programs. Since virtually all Americans (regardless of credit score) qualify for up to $20K in loans per year (with a cap of about $180K total), a students ability (or lack there of) to complete the program is irrelevant as long as the money keeps flowing in.