For Tara Chang, an MBA was destiny. Her father has one. Her two brothers each have MBAs on their resumes. Even her grandmother holds the distinction that is the modern day near-guarantee to wealth and professional success. For Chang, it wasn’t an “if” as much as a “when.” And the when came this past year. It also came via the less-talked-about one-year route.
“I think the one-year program has done exactly what I wanted out of an MBA,” says Chang, who recently graduated with her quickie MBA from Northwestern’s Kellogg School of Management. A business education staple in Europe, the one-year MBA has yet to gain significant steam in the states. Yet, with the soaring costs of traditional two-year programs, the less expensive one-year option seems to be gaining ground.
These accelerated degrees certainly are not MBA-lites. Elite schools such as Kellogg, Cornell’s Johnson School of Management and Emory’s Goizueta Business School all have one-year offerings. Throw in Notre Dame’s Mendoza College of Business and four of Poets&Quants’ top 25 schools have a one-year option, which excludes the Stanford Graduate School of Business MSx program and the MIT Sloan Fellows Program. In total, 21 of the Poets&Quants’ top 100 MBA programs house a one-year MBA.
AN EXTENSION TO STRONG UNDERGRADUATE BUSINESS DEGREES
The path to programs like Kellogg, Goizueta, Cornell Johnson and Notre Dame are similar to Chang’s journey. Those programs essentially leverage an elite undergraduate business degree for much of the core work, allowing students to almost immediately jump into gradate-level electives. After graduating from MIT’s Sloan School of Management with an undergraduate degree, Chang spent time working at WebMD and most recently, New York City-based startup Visible Measures, where she worked her way up from being the only salesperson in a 20-employee venture to vice president of sales and marketing as the company ballooned to 150 in four years. The Los Angeles native boasts a top-shelf undergraduate degree, early career success, and is not looking to significantly jump industries.
“If you are not using the MBA as a tool to make a career change and are interested in staying in a similar or the same industry, then the one-year option becomes much more interesting,” says Matthew Merrick, the associate dean of MBA operations at Kellogg. Similarly, the Babson College one-year program is essentially an extension of a strong undergraduate business degree. “Our one-year program is structured for those who have an undergraduate business background, to leverage their existing academic foundation to complete the MBA in an accelerated format,” says Elizabeth Resker, the assistant director of graduate admissions at Babson. “There are several academic pre-requisites for the program and typically those who have a BSBA degree should qualify.”
NOT AN “MBA-LITE”
Still, Merrick says not to look at a one-year MBA as an “MBA-lite.” “It’s not a siloed version of our two-year program or an MBA-lite,” Merrick continues. “This is the full MBA experience, and we’re just giving you some credit for your undergraduate academic experiences.”
Perhaps most interesting is the sticker price of the degree when compared to two-year programs. At Kellogg, for instance, the total cost for a two-year MBA (tuition plus living expenses) is more than $186,000, but the one-year offering comes nearly $60,000 cheaper at around $128,000. Emory Goizueta’s one-year is even less, $117,000, a $45K discount to the two-year version, which surpasses $162,000. While technically not a one-year program, Columbia Business School’s J-Term — a January start-time that shortens the full-time two-year MBA to 16 months. With Columbia’s estimated yearly cost of nearly $100,000, cutting the first year in half can be an attractive option for MBAs not looking to participate in an internship.
Of course, the other side to consider is outcomes. At Cornell Johnson, only 64% of 2015 one-year graduates reported a job offer at graduation, compared to 85% in the two-year program. One-years gained ground three months after commencement, with a jump to 84% reporting offers and two-years reporting 92% with offers. However, there is one head-scratching surprise: Graduates from the one-year MBA program reported higher median salaries of $122,500, compared to $119,100 for two-year MBAs. At Notre Dame’s Mendoza College, two-year MBAs out-performed their one-year counterparts in the most recent employment report. Some 93% of two-year MBAs reported pocketing job offers with average salaries of $108,219. Meantime, just 84% of one-year MBAs held offers three months after graduation with an average salary of $100,052.
INCREASING CAMPUS INTEGRATION AND COHORT COHESIVENESS
Another hesitation for the one-year option is that there often is less integration with other options and about half a year less bonding time with classmates. These are both issues elite programs are addressing head-on. At Goizueta, Katie Lloyd, senior director of MBA admissions and one-year program operations, says the school has created “thoughtful activities” to “ensure synergy” and “help bring the two groups together as seamlessly as possible.”
At the University of Southern California’s Marshall School of Business, nurturing classmate bonding goes to another level. Students of the one-year IBEAR MBA program are incentivized to live together in an apartment complex seven miles west of the downtown Los Angeles campus. Program Director Richard Drobnick predicts about 40 of the 55 students currently in the program — and their families — are living in the complex. Students are given a subsidy of $18,000 for a two-room spot and $12,000 for a one-room place. However, Drobnick says those amounts are decreasing to $12,000 and $9,000, respectively, for next year’s cohort.
“We offer subsidies to attract our folks to live in one complex,” Drobnick explains. “It reduces the stress on spouses. It gets the Korean children, the American children and the Chinese children to play together. The students can come home from class at 6 or 7 at night, have a meal with their family and go into study groups without the transportation costs.” Drobnick says the living situation has helped foster life-long relationships and created an “incredibly intense community.”