One-Year MBA Programs Gain More Traction

by David Bogoslaw on

It’s no secret that an MBA is one of the most expensive gifts you could ever give yourself. Once you add in the lost income from quitting your job, the interest payments on student loans, and the ever-rising tuition and fees, the total cost of the degree can approach $350,000.

So at a time when applications to most two-year MBA programs have been down, it’s probably not all that surprising that there’s renewed and growing interest in one-year programs. As Kate Smith, admissions director for Kellogg, puts it: “The value proposition of the one year is great so there is high demand for it.”

While overall MBA applications to Kellogg were down 7% last year, one-year applicants bucked the trend. They rose by 6% last year and are up 24% since 2009. So this year, Kellogg has enrolled a record 100 students, up from 86 last year. Smith says the school plans to expand the class by 20% to 30% next year, bringing enrollment to as high as 130 students.

KELLOGG EXPECTS TO DOUBLE THE SIZE OF ITS ONE-YEAR PROGRAM IN THREE YEARS

As the highest ranked U.S. school with a one-year MBA program, Kellogg believes it has an unusual opportunity to achieve significant MBA growth. Within three years, the school plans to double the size of its one-year program to some 200 students.

Besides Kellogg, there are only two other top 20 U.S. schools with one-year options: Cornell University’s Johnson School of Business, which requires candidates to already have an advanced degree, and Emory University’s Goizueta School, which like Kellogg requires applicants to have an undergraduate business degree or a quant background (see Guide To The Best One-Year MBA Programs in the U.S.)

And those schools are also reporting increased interest in the one-year alternative.  At Emory’s Goizueta School applications this year are up 39% and the school has enrolled 48 one-year students, up from 39 a year earlier. At Cornell University’s Johnson School, applications for its one-year MBA rose 15% last year while class size jumped 30% to 59 students. Johnson hopes to enroll 60 to 70 students in next year’s class. Fueling demand for Cornell’s 12-month option is the opportunity for students to do a dual-degree. “It’s a unique opportunity for a dual degree, like an MD/MBA, or Masters in Real Estate/MBA,” says Randy Allen, associate dean at Cornell. “Students can shave time off as well as cost in getting that [second] degree.”

Viraj Mehta completed Johnson’s accelerated MBA this year, between his third and fourth years at Case Western Reserve University’s School of Medicine, where he’s studying to be an eye surgeon.

“It’s a great way to round out my skill set and give me a better idea of how the business of medicine actually works,” he says. “Eventually it will help put me in a position where I can make large-scale changes for the healthcare system.”

KELLOGG ONE-YEAR MBAS SAVE MORE THAN $115,000 OVER THE SCHOOL’S TWO-YEAR MBAS

The benefits of one-year programs are obvious: Getting the same degree in half the time brings considerable savings in tuition and fees, room and board, and the lost opportunity cost of not having a job for two years. Once you include lost income and interest charges on student debt, the one-year program at Kellogg would save a student roughly $115,614 (see table at left). The total cost of Kellogg’s one-year program is $207,008 versus $322,622 for the two-year program. These estimates do not include scholarship money from Kellogg (where the average scholarship grant is $15,254 per academic year) or corporate sponsorship from a previous employer.

And despite the shortened academic experience, MBA employers tend to award one-year grads the same starting salaries they pay MBAs of two-year programs. In fact, several schools report that their one-year MBAs make slightly more than graduates of their traditional programs, largely the result of differences in work experience. At Kellogg, for example, one-year students are on average five months older with six months more work experience. So the return-on-investment of the one-year degree is much faster.

“People doing the two-year program are looking to have a college experience,” says Shena Simmons, who completed her accelerated MBA at Goizueta in May.  “With the one-year, you go in, you want to learn your stuff, and then get out to restart your career.”

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  • highwyre237

    I know it isnt reflected in the total, but the first table in has Lost Employment Income under both MBA Cost and Extra cost.  The totals are correct, but it could make the table confusing.  Thanks for this! another useful, well written article

  • Byrne332

    Thanks for catching that mistake. I just fixed the table so it’s not in the MBA cost portion of the table. 

  • Baldwin

    Harvard has PLD and caters to the EMBA market with amazing success.

  • TA

    I guess its a great option for someone who already has a graduate degree in engineering or some other field. Columbia also has a 15 month program similar to Kellogs.

  • Gil Levi

    Usually, the admission requirements for 1-year programs are similar (or identical) to the admission requirements of 2-year programs at the same school. The rationale for admission (that is, the criteria weighed by the Admissions Committee) is usually similar as well. It is sometimes easier to get into one-year programs if you are set to return to a family business after completing your studies or to your current company (this is the case with Columbia and Cornell, for example). This is so because 1-year programs do not offer a summer internship (or alternately, offer a brief one). They therefore feel that if you need to secure a job after completing your studies, a two-year program with a full summer internship may be more suitable for you. In some cases you are required to already hold a Master’s degree in order to gain admission.
    In terms of admission chances – as far as I see, the admission rates for the one-year programs are usually similar to those of the two-year programs at the same school. My impression is that the prestige and professional value (again, with the exception of the absence of a summer internship) of these programs after completing them is similar to that of the two-year MBA program at the same institution.
    Here is a list of 1-1.5 year MBA programs: http://www.aringo.com/ClientInfo/1y_programs.htm

  • Georges

    @428037882efd54be458356cb3902b3b4:disqus ,

    This is indeed a great option I was looking at : http://m.exed.hbs.edu/landing/Pages/executivemba.aspx

    Thank you.

  • JT

    Great report. Not sure I agree with the assertion that 1Y students at Kellogg are at any sort of disadvantage for consulting and other top-tier recruiting, though. IBD, I agree with.

    Here’s a link to the recent employment report:

    http://www.kellogg.northwestern.edu/career_employer/~/media/Files/CMC/Employment%20Report/EmploymentReport2011.ashx

    If you look at page 31 you can see where all the 1Y students went after graduation:
    McKinsey: 13
    BCG: 5
    Bain: 4

    There are also about 10 students going to prestigious PE/VC and Investment Management shops. That’s roughly 1/3 of the students going into jobs with very rigorous recruiting requirements.

  • mver12

    I just finished Emory’s one-year program and basically, I was interested in an accelerated program to get back in the work force as soon as possible, since I believe that in this day and age, technology and times are changing at such a pace that the longer I’d stay out of the workplace, the more out of touch I would have felt.  Also, with somewhat of a business background (of public accounting, in particular financial audits), I believed that I’d be able to leverage my work experience with my MBA without going the 2-year route.  I believe that the two-year program is especially beneficial for those with perhaps a more technical background (such as engineering, medicine-related, etc).  The two years allow them to be exposed not only to a larger network and more classes, but also a summer internship which provides them with direct experience working in a field that may be interested in pursuing. 

  • EG

    From the perspective of someone who just started the 1-year MBA program at Emory: I think the true value to B-school is not in the “what”, but in the “how”.  The technical skills taught (in any MBA program) can substantially be learned on the internet or through work experience.  The opportunity to apply and contextualize these skills with a network of quality individuals is where B-school is invaluable.  The benefit of the 1-year program IS the compressed time frame in that it purposely tests and hones critical skills in prioritization and efficiency.

  • Rgj1

    More decline in the quality of education. Pretty soon an MBA will be meaningless in the business world.

  • MW

     I graduated this past May from the One-Year MBA program at Babson College’s Olin School of Business.  The One-Year experience at Babson delivered exactly what I was looking for in an MBA program.  I wanted a full time MBA program experience, but in evaluating the landscape of full time MBA programs during the application process, I realized my background did not fit the prototypical mold for a Two-year program as I had an undergraduate degree in Finance and nine years of relevant work experience.  Babson’s One-Year program added tremendous value to me in that it condensed the first year of a typical Two-year program into an intense 13 weeks.  The pace was frenetic and intense but incredibly rewarding and emblematic of the challenges faced in a high growth company.  I would disagree with the articles stance on the loss of bonding in a One-Year program.  I found the intensity of 13 week session pulled my classmates and me closer together than most Two-year programs.  I graduated exactly twelve months after I started with a job in Corporate Finance for a Fortune 200 company at an all- in cost of a little more than half that of a Two-year program.  
    I graduated this past May from the One-Year MBA program at Babson College’s Olin School of Business.  The One-Year experience at Babson delivered exactly what I was looking for in an MBA program.  I wanted a full time MBA program experience, but in evaluating the landscape of full time MBA programs during the application process, I realized my background did not fit the prototypical mold for a Two-year program as I had an undergraduate degree in Finance and nine years of relevant work experience.  Babson’s One-Year program added tremendous value to me in that it condensed the first year of a typical Two-year program into an intense 13 weeks.  The pace was frenetic and intense but incredibly rewarding and emblematic of the challenges faced in a high growth company.  I would disagree with the articles stance on the loss of bonding in a One-Year program.  I found the intensity of 13 week session pulled my classmates and me closer together than most Two-year programs.  I graduated exactly twelve months after I started with a job in Corporate Finance for a Fortune 200 company at an all- in cost of a little more than half that of a Two-year program.
     

  • polaiso

    it was always meaningless…you mean people soon will realize that :)

  • Erik F

    I completed Babson’s 1-year MBA program in May and I have to say it was the best decision for me for a number of reasons. 1) My cost savings were easily $40k not counting the opportunity cost of one lost year of income earning which would bump that number up quite a bit. 2) With an undergrad business degree and ample business experience, I didn’t feel the need for a full year of refreshers. Although the 2-year class was dynamic and diverse, many were studying business for the first time. No offense to them, but I didn’t want to go at a slower pace than necessary. I knew I would be with a group of like minded students in the 1-year program. 3) Classes were nice and small and professors connected well with 1-years, because we have solid experience and drive that make the class exciting for them. There are many other positive reasons. Of course, there will be some drawbacks like potentially losing the opp for a internship unless you’re really on top of your game…but for me the pros greatly outweighed the cons. 

    You also have to recognize that every program is different. Babson does an excellent job maintaining almost the same exact curriculum for 1 & 2 years. As a 1-year you feel pretty cool doing the same degree in half the time. Babson breeds entrepreneurs better than any program around. It’s important to take the knowledge gained and apply it to real situations. As a 1-year you find yourself taking action a lot quicker with a library of fresh knowledge in your mind. I wonder how much of the first semester the 2-years really retained and use by the time they graduate. 

    In sum, a one year MBA program is a great option for the right person…someone with drive, an undergrad bus degree, or lots of applicable business experience. You need just one of those qualities and you should be fine. I highly recommend Babson as a happy and successful Alumnus!!

    Go Beavers!

    Erik

  • Brian

    One year MBA program = Big Farce !  It is sort of a graduate certificate now, truncating programs to suit an audience simply because they do not want to attend for 16 months is pathetic. Business schools will basically do anything to stay afloat or to keep the revenue stream flowing. The degree is comical now.

  • Spencer

    Kellogg intends to grow their 1 year program considerably. Does anyone have any thoughts as to what this growth will do for selectivity? Should we expect the 1 year program to be as challenging to gain admission to as the traditional program?

  • Ryan

    A one year MBA used to be called an Executive MBA, shaving the degree for non execs is not beneficial to what the degree stands for.

  • http://www.accelerated-degree.com/ www.accelerated-degree.com

    Your ability to share Information is a talent and very appreciated.Thanks for another Timely Post.

  • http://www.facebook.com/jeffrey.kistner.50 Edward Robin
  • Charlie

    Very insightful information this, especially for someone looking to secure a job post graduation. Thanks.

  • Squareone

    For those with 8-yrs+ of experience and considering a one-year MBA, I would strongly urge you to consider the Sloan Fellow programs at Stanford and MIT. The Stanford program is exceptionally elite and they give you access to all of Stanford, not just the GSB; it awards a Masters in Management. The MIT program tends to cater to a slightly older crowd with a number of executives in the program. MIT gives you the option of an MBA or Masters in Management. The Masters in Management requires a thesis whereas the MBA does not. I believe most go for the MBA designation given its recognition.

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