Another one bites the dust. The University of Illinois at Urbana-Champaign announced today (May 24) that it will eliminate both its full- and part-time MBA programs to focus more resources on its online MBA and specialty master’s programs. With the move, Illinois Gies becomes the second top-50 U.S. school in the last three years to eliminate its residential MBA program.
Like the University of Iowa, which dropped its full-time MBA in 2017 to redirect resources to its online offering (which launches this fall), Illinois Gies is banking on the continued popularity of its iMBA — and they have good reason to be confident in that popularity. That’s because with a total tuition bill of $22,000, the iMBA is by far the cheapest online MBA from a major university.
Another point in its favor, as far as prospective students are concerned: Applicants to the iMBA do not need to take the Graduate Management Admission Test. That, along with the cost, is part of Illinois’ mission to open up the MBA experience to a wider applicant pool.
“Part of the whole idea of this model is, we wanted to really take seriously one of our core strategies and missions, which is creating access to world-class business education for as many people as we can,” Dean Jeff Brown tells Poets&Quants. “And we are still really committed to that mission. The iMBA is the right format for the times — providing a powerful learning experience with any time/anywhere accessibility at an affordable cost. Given the global reach and accessibility of this program, we are creating what I call ‘the world’s MBA.’
“With this and with our innovation in undergrad, specialized master’s, and lifelong learning, we are playing to our competitive advantages and positioning ourselves for tremendous impact and steady growth. These moves will focus our investment in ways that will make us unquestionably one of a handful of the world’s very best and most innovative business schools.”
DOWNWARD TREND FOR THE FULL-TIME MBA PROGRAM
Why the sea change, or, as Illinois Gies puts it, “strategic shift”? Economics was a major factor, Brown says. Application volume for the Gies full-time MBA has fallen by about 25% since 2016, partly because of the general wane that’s impacting all MBA programs and particularly due to the drop in international interest that has plagued so many schools. In fact, in November, Illinois made headlines when it took out a $400K insurance policy against the further loss of Chinese students amid what Brown told P&Q was an “unprecedented decline.”
In its heyday in the 1990s, the Illinois MBA had an enrollment of more than 600. Compare that to today, with fewer than 100, including a fall 2018 intake of just 49 students.
“The full-time market is down pretty substantially from its peak, although some of that might just be a sign of a very strong economy — people don’t want to go back to school,” says Brown, adding that discussions about moving away from the residential programs began about 18 months ago. “We think part of that is also a longer-term decline due to the fact that there is growth in specialized master’s programs. But also, yes, the program was losing money. I don’t want people to think that’s the only reason we made this decision. This was really a decision about where we can most effectively put our staff and faculty resources, our reputation, everything, in order to really build our brand and deliver on our mission.
“But yes, money was a factor. This was not something that was a financial drag on the college. I would say it was small losses for a number of years and it just sort of coincided with the fact that our number of students in the program is down a lot from what it was at its peak in the heyday, 25 years ago.”
Nor has it been a great couple of years in the rankings for the Gies full-time MBA, which was ranked 66th by Poets&Quants last year, a loss of 15 places. That big drop was due in large part to losing two rankings altogether — The Financial Times and Forbes — and suffering an eight-point decline on U.S. News’ 2018 list. The school also dropped 24 places in the 2018 Bloomberg Businessweek ranking, to 69th place. Gies subsequently halted the decline at U.S. News and ranked 47th in that publication’s latest ranking — but along with financial uncertainty and other factors, perhaps the writing was on the wall. The fall 2019 intake will be the last for the Gies full-time MBA, meaning the Class of 2021 will be the last to graduate, Brown says.
FLAGGING INTEREST IN THE PT PROGRAM, TOO
The Illinois Gies part-time program, meanwhile, known as the Professional MBA and ranked 65th by U.S. News, grew to a yearly enrollment of 64 in 2018 but is at about one-third of that this year. (See page 3 for admissions data for the Gies full- and part-time MBAs as well as the iMBA.)
“The full-time and part-time residential MBA programs are excellent, as are the students and alumni of those programs,” Brown says. “Yet market demand for traditional formats is declining nationwide. Meanwhile, demand, as well as the needs of businesses and individuals, is growing in these other areas. We believe in innovating and staying ahead of trends in business education and on top of the needs of business and society.”
Recognizing that the announcement to kill the full- and part-time MBA programs may impact some students’ decision about whether to attend Gies, the school extended the deadline for refunding deposits from June 3 to July 1 and also offered automatic admission into the iMBA as an option.