As demand for MBA programs rebounds after years of waning interest, business schools must confront a pivotal decision: Join the growing crop of universities providing fully online degrees or stick with the traditional model that puts a premium on in-person networking.
Though online MBAs were once considered an inferior credential offered almost exclusively by for-profit and less selective institutions, the concept is gaining traction among students, employers and more prestigious universities as a more flexible—and perhaps more practical—pathway for working professionals to bolster their résumés.
And with elite schools like UC Berkeley and the University of Michigan recently jumping into the online space, pressure is building for competitors to consider the option, lest they lose out on a lucrative slice of the market. The University of Illinois at Urbana-Champaign launched a wildly successful online MBA in 2016, but Northwestern University and the University of Chicago, which boast two of the country’s highest-ranked programs, have no immediate plans to follow suit.
“Ten years ago, this would have been a heresy, and yet now a lot of top programs are embracing it,” Jeremy Shinewald, founder of admissions consulting firm mbaMission, said of online programs. “They’ve come to understand that they can appeal to a much larger demographic and leverage their own brands and their own resources—somewhat expensively—without watering down their degrees.”
That’s not an easy task. If schools want a piece of the online game, they’ll have to devise a curriculum that’s engaging and justifies the steep price tag (some online programs cost well over $100,000). Prestigious schools must also ponder whether adding an online option would upset high-powered donors who aren’t on board with the idea, Shinewald said.
Online or not, business schools are eager to see more students after years of declining enrollment. In 2020, applications to U.S. programs increased for the first time in five years as the pandemic spawned economic uncertainty and schools loosened admissions processes, such as temporarily dropping GRE or GMAT requirements. Marketwide enrollment data for 2021 hasn’t been released yet.
But whether schools will jump on the internet bandwagon rests largely on the type of student they’re trying to entice.
Residential, full-time programs typically attract younger applicants looking to enter an ultracompetitive company or make a major career shift. Part-time programs, on the other hand, are held on evenings or weekends and cater to older adults who continue working during their studies.
The latter group is where online MBA programs will have the most appeal, said John Byrne, editor-in-chief of the MBA-oriented website Poets & Quants, who estimates about 350 online MBA programs have emerged in at least the last decade.
“It’s not going to hurt big brand-name residential MBA programs, but it will start to whittle away the part-time MBA market and the executive MBA market,” he said. “Frankly, people just don’t have the time, or don’t want to devote the time, to go to school at night or on the weekends anymore when they can do it online.”
The University of Illinois, which unveiled its online MBA five years ago and later eliminated its dwindling residential program, provides a unique case study. Since launching with a little more than 100 students, enrollment in the fittingly named iMBA program has exploded to more than 4,200 this year. Byrne called it the “fastest-growing MBA program on the planet” and gives it high marks for quality, though the school doesn’t participate in formal rankings due to objections about methodology that give greater weight to test scores and selectivity.
The program in U of I’s Gies College of Business offers live video classes in which students and professors can interact, optional in-person immersion trips and instruction by renowned faculty, who make themselves available for virtual office hours. While some programs provide only pre-recorded lectures with little peer contact, iMBA students can choose whether they want to participate in real time or asynchronously for every class.
There’s another key element that sets the iMBA apart: Tuition costs about $22,104.
Jeffrey Brown, the dean at Gies, said the university brought price down by scaling the program and leveraging online capabilities. While there were significant upfront costs—such as investing “several million dollars” in professional-grade film studios where professors record lectures in front of green screens and hiring staff to design course material—the goal was to offer a high-quality MBA at a more affordable price.
“We wanted to disrupt this space,” Brown said. “We didn’t price it at profit-maximizing level. I would say we priced it at a mission-maximizing level, which really is about creating access in a way that is financially sustainable.”
Still, the program’s paid off. Brown said he’s “very pleased with the financial contributions the program is making” and officials confirmed the program is profitable but declined to share exact figures.
Not every university is racing to create a fully online degree. And some still see drawbacks, though online learning is becoming more accepted as a result of the pandemic.
“You’re probably not going to get a job at a top private-equity firm with an online MBA,” says Shinewald, the admissions counselor. “You’re probably not going to get a job with any other amazingly prestigious employer . . . a VC firm, a consulting firm, at least for now.”
Greg Hanifee, associate dean of degree operations at Northwestern’s Kellogg School of Business, said a completely virtual optional is not being considered, though the part-time and executive MBA programs are incorporating more online and hybrid courses to accommodate student schedules.
“We know that our students value the networking and in-person aspects and don’t want to totally give that up,” he said. “We’re not hearing from applicants that they’re choosing other schools because they never have to go to campus.”
Loyola University Chicago, which revamped its MBA program in 2020, said it’s also gotten feedback that the majority of students want to take advantage of in-person components. Business school Dean Maciek Nowak said students eager to interact have even organized additional events off campus.
“They like the flexibility of online, but they also want networking of in person,” he said. “That is ultimately the balance at the graduate level.”