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In a pivotal moment for graduate-level business education, more full-time MBA students are enrolled in online programs than residential programs during the 2020–21 academic year. According to data from the Association to Advance Collegiate Business Schools (AACSB), a leading business school accrediting agency, 45,038 students were enrolled in online programs last year, while 43,740 were in-person.
The shift to online classes during the pandemic accelerated the growth of online MBAs, but the trend has been pointing in that direction over the years. AACSB data shows that the number of accredited business schools offering fully online MBA programs increased by 54 percent between the 2012–13 and 2016–17 academic years, and another 85 percent between then and 2021–22.
“Growth is slow and steady,” said Sean Gallagher, executive director of the Northeast University Center for the Future of Higher Education and Talent Strategy. “Pandemics and the shift to work and online learning are just taking existing trends and accelerating them.”
It helps that employers have become more receptive to online MBA programs in recent years. A study released last December by the Center for the Future of Higher Education and Talent Strategy found that 71 percent of employers now view business degrees earned online as equal or better than traditional programs in quality. That’s up 10 percent from 2019.
“Today, most employers will welcome your online MBA,” says Gallagher. “But it would have been in the minority just seven or eight years ago.”
Early adopters
When the University of Illinois at Urbana Champaign’s Gies School of Business launched its full-time online MBA program in 2016, there were only a handful of online MBA programs available from accredited and highly-rated business schools. Indiana University’s Kelley School of Business had launched the first one-way street in 1999, but when the University of North Carolina at Chapel Hill launched [email protected] in 2011, which started a “chain reaction” of similar programs at other highly accredited business schools, Gallagher said.
W. Brooke Elliott, executive dean for academic programs at Gies, who was involved in launching the iMBA program in 2014, said the school was motivated in part by the growth of online MBAs but disrupting the competitive market and differentiating themselves from applicants was also a major factor.
“The traditional MBA market is very competitive, especially for public institutions,” says Elliott. “We are trying to think about how we can be innovative.”
Elliott emphasizes the accessibility of online programs compared to residential programs which are more expensive and less flexible. Tuition for the iMBA is approximately $23,000 per year—nearly a third of the average price for a full-time residential MBA program. As a result, Gies sees the pool of online MBA applicants making a significant demographic shift.
“About a quarter to a third of our applicant pool are still regular MBA students … the rest are outstanding students with great stories, but postgraduate education is usually inaccessible to them,” says Elliott.
Cost is not the only factor expanding the pool of applicants for Gies. The program’s flexibility attracts many students whose mitigating circumstances would prevent them from pursuing a residential MBA, from mothers with young children to those who serve in the military. Elliott says they even have suitors living on the submarine.
“That’s one of the coolest things about online education … if you look at the students you draw, they vary in ethnicity, gender, background and experience, where they live in the world,” says Elliott. “You’ll never see it in a traditional MBA program.”
The Gies iMBA program has grown rapidly every year since its launch, from an initial cohort of 116 students in 2016 to more than 4,600 students this academic year. In fact, it proved so successful and cost-effective that Gies stopped offering a residential MBA entirely in 2019.
If online MBAs were on the rise before COVID-19, the pandemic put it into hyperdrive. When Gies stopped offering residential MBAs, approximately 2,600 students were enrolled in its iMBA program. During the pandemic, its enrollment grew by another 2,000 students—thanks in part to Gies laying the early foundations for a successful online specialty business education, says Elliott.
“The education market has changed dramatically by the pandemic,” he said. “Even the strongest housing program with the greatest reputation … lacks the expertise or capacity to, quickly, develop and deliver high quality [program] designed for online.”
Top Mobile Business Schools Online
In 2010, Harvard Business School dean Nihit Nohrita was asked if the top business schools in the country would ever explore online degree programs. The answer is short and definite: “Not in my lifetime.”
That attitude is shaped by the assumption that online MBA programs are inherently lower quality, Gallagher said, in part because of their ties to non-profit institutions without AACSB accreditation, such as the University of Phoenix and DeVry.
“If you go back almost 20 years, very few top-ranking business programs offered online degrees,” says Gallagher. “A few years later, the market has shifted in such a way that they are starting to accept it.”
In mid-2010, schools such as Harvard and Stanford began offering some online classes towards a business degree. But it was only after the pandemic, when expanding online learning became a temporary necessity, did the top 10 business schools start exploring flexible options for getting most or all of an online MBA.
One of the new offers comes from the Haas School of Business at the University of California, Berkeley. The school’s new Flex option, which will allow a group of students to earn a part-time online MBA while offering optional face-to-face opportunities, is in the process of enrolling its inaugural class.
Jaime Breen, Haas’ assistant dean for the MBA program, said applications for the Flex option were “as strong or stronger” than the normal pool for part-time programs, and that applications from women and service members increased significantly.
At a leading business school like Haas, concerns about the depletion of the school’s brand or offering a low-quality education can be expected to arise from the online program offering. But Breen says support for Flex is widespread among faculty, alumni, and students today—in part, he believes, because of the pandemic.
“Many people are forced to have it [online] experience, and it challenges their innate bias” about online learning, he said.
The Flex option is part of the Haas school weekend and evening MBA program, and it is intended to offer more flexibility to the student population that already needs it. Gallagher, the center’s director, said these face-to-face part-time programs are the most likely to be replaced by online options in the near future.
“There will always be a market for full-time face-to-face experiences,” he said. “Working professionals, part-time audiences have largely switched online.”
Breen says that while there are no concrete plans for a full-time online MBA program at Haas, the school has not ruled out the conversation. They take a close look at the burgeoning online MBA market, and the upcoming first year of the Flex program, for signs that they should have it.
“This is our way of learning and gaining experience,” he said. “Part of the reason behind [Flex] is that we need to have this capability to cater to the market in which it is located.”
Ahead of the Curve?
Business and business-adjacent programs have long been at the forefront of online education. In 2016, there were nearly 7,500 online programs in business, management or marketing—nearly 3,000 more than the nearest competitor, according to a 2019 study by the Center for the Future of Higher Education and Talent Strategy.
Elliott, from Urbana-Champaign, said that the launch of the iMBA program inspired other online graduate degree programs across the university, including at the Granger School of Engineering.
“Business school is a leading indicator of what’s possible in other areas of graduate education,” Gallagher said, adding that other graduate programs, particularly professional degrees, will likely follow the same trend as the MBA.
In many cases, they have. According to 2019 data from the National Center for Education Statistics, nearly a third of all graduate students were enrolled full-time in exclusive online degree programs before the pandemic.
“When all of these online programs started years ago, the narrative and strategic assumption was that distance learning was for students who couldn’t come to campus,” Gallagher said. “It has since been proven untrue.”
For Elliott, the fact that the doubts and stigma surrounding online program offerings are disappearing means more opportunities for disadvantaged and non-traditional students to earn a college degree—and subsequently, become more socially and economically mobile.
“Going online is a way to make higher education accessible,” says Elliott. “There are millions of people we don’t serve as an academic institution. And I think if we come together and change the way we think about education, we can do real social good.”
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