Should You Get an Online MBA Degree?

Even high-level federal employees may have these “bogus” degrees paid for at the government’s expense, according to a 2003 report by the U.S. Government Accountability Office. The possibility that government officials may have fraudulent MBAs continues today. Scott Farnam, the mayor of Wildomar, California, claims a Rochville bachelor’s in business administration on his LinkedIn profile.

One natural lure of these diploma mills is their low cost—perhaps a few hundred to a couple thousand dollars for a diploma in a week. Prices for more legitimate online MBA programs vary wildly—ranging from $7,000 to $119,000, according to GetEducated’s 2009 survey of 90 online business programs. Regionally accredited programs ran an average of $22,924 while AACSB programs averaged $32,926, according to GetEducated.

Despite their cut-rate prices—or perhaps because of them—diploma mills may be lucrative to their operators. Distance-learning author John Bear once suggested a mill can earn $10 to $20 million a year and that the aggregate earnings top $200 million. Their success also depends on aggressive marketing. Phillips says the people behind the MBA fraud business tend to be masters of search-engine optimization. MBA applicants doing a Google search on b-schools have to wade through a host of sketchy programs to find sound ones. Consider the ads that show up when searching the phrase “online MBA program”—three of the seven I see explicitly say “no GMAT required,” which doesn’t inspire much confidence in their programs’ rigor.

In addition, a host of web efforts, from fake accreditation to fake employer verification to waves of PR, exist in order to make diploma mills appear more legitimate than they really are.

‘I WORK READ HARD FOR LONG TIME AT DAIRY QUEEN’

But those efforts fall apart against closer scrutiny. The woman behind a consumer awareness site called DegreeInspector.com recounts sending one-line, resume-free applications to places like Rochville. She was accepted to at least one program based on basic contact information and her often-repeated application pitch: “I work real hard for long time at Dairy Queen.”

The quality of more-legitimate programs also has come under scrutiny. Columbia University b-school professor Henry Levin dismissed the University of Phoenix’s MBA option when talking to the New York Times in 2007: “Their business degree is an M.B.A. Lite…I’ve looked at their course materials. It’s a very low level of instruction.” In that same article, William J. Pepicello, president of the University of Phoenix, retorted that, “the university takes quality in the classroom seriously.”

Widespread concerns about quality and sometimes fraud create problems not only for prospective students and employers, but also for those trying to run high-quality online programs.

When San Diego State University investigated launching a virtual business degree more than a decade ago, officials surveyed 550 traditionally enrolled MBA students and found skepticism. “My perception (however wrong) is that Internet programs are primarily for people that can’t get accepted into a ‘regular’ MBA program,” one respondent wrote, according to the Online Journal of Distance Learning. “It is very difficult for me to imagine that such a program could have the same quality and interactions as a ‘regular’ MBA program.”

The glut of for-profit programs, some more legitimate than others, blows out the airwaves, web, and print with advertising, and many traditional directors grapple with how to construct a credible online program—and what to underscore.

Kenneth Heischmidt, the director of Southeast Missouri State University (SEMO) in Cape Girardeau, Missouri, emphasizes the school’s AASCB accreditation. SEMO’s online MBA is also especially affordable, at a little over $8,000 for in-state residents and $14,000 otherwise. Heischmidt emphasizes that at SEMO, the management MBA’s online option simply comes with a “different delivery mode.” The school offers the same assignments with the same requirements, as well as the “same instructors teaching online as face-to-face.” Its online MBA program has run for around eight years, according to Heischmidt, and was launched in part to serve a region he calls “sparsely populated.” Cape Girardeau has under 40,000 people, he observed, and SEMO would benefit from targeting the broader Missouri region. He recalls one of the first students: a single mother from a rural town, who couldn’t have completed the degree if not for its online option.