How much money would you be willing to borrow to get an online MBA degree?
You will, no doubt, be surprised to learn that many online students are borrowing $50,000 or more to get their degrees. In fact, at the high end, the levels of student debt online students are willing to assume are shocking.
At Pepperdine University’s Graziadio School of Business, for example, eight of every ten graduates is going into hock to get an online MBA from the school. Even more surprising, the average level of indebtedness is a whopping $96,094 for an MBA degree with a price tag of $92,040. That’s more than $4,000 of debt over the actual cost of the degree.
GRADUATES OF AT LEAST 16 ONLINE MBA PROGRAMS HAVE DEBT OF $50K OR MORE
The average debt burden for graduates of at least 16 online MBA programs, in fact, is $50,000 or more. Many of the schools on the list, based on business school reports to U.S. News & World Report for its newest 2019 ranking of online MBA programs, are not even among the very top business schools in the U.S.
At American University’s Kogod School of Business, whose residential full-time MBA program is ranked 69th by Poets&Quants, nearly half the graduates (45%) are leaving with $82,668 of debt. At Syracuse University’s Whitman School of Management, whose full-time MBA is ranked 79th, the average debt load for online MBA students is $78,700. And at George Washington University’s business school, online student debt in its online MBA program came to $73,159 for the 49% of graduates who had to borrow money to get the degree.
One of the biggest surprises on the list, however, was the online program of a school that has never ranked in the top 100 of full-time MBA programs: St. Mary’s College of California. Online MBA graduates at St. Mary’s left with an average debt of $63,000 and 80% racked up debut upon graduation.
DEBT LEVELS SURPRISING GIVEN DIMINISHED CAREER BENEFITS OF AN ONLINE MBA
The numbers seem especially high because online MBA programs typically do not provide the same career outcomes as full-time MBA experiences at top schools that draw corporate recruiters to campus and allow more students to do career switches. In many online programs, in fact, career opportunities are far less available than they are in a full-time program.
Of course, that doesn’t mean an online MBA won’t provide a graduate greater confidence at work and an opportunity for either a raise or promotion in their current company. Pepperdine, with the highest debt levels, says that its 2016 survey of online graduates showed that 75% agreed that their online MBA helped them earn a salary increase and a promotion.
Switching companies or industries, a common reason for a full-time MBA experience, is far less likely with an online MBA, however, particularly from academic brands that are not well known. Poets&Quants’ surveys of online MBA alumni show that less than a third of graduates (roughly 31%) were able to change jobs as a result of their degrees (see Online MBA Programs That Deliver Great Career Outcomes). In contrast, a median 58% said they received a pay raise as a direct result of their online MBA.