Boston University’s Questrom School of Business is diving into digital — and looking to make a big splash. On Tuesday (July 23), the school announced the fall 2020 launch of its new online MBA in partnership with edX, the education platform founded at Harvard and MIT in 2012. But the real eyebrow-raiser is the pending program’s price tag: At a total cost of just $24,000, Questrom’s new online MBA instantly becomes one of the most frugal options in online graduate business education.
“The time has come again to expand our portfolio, using new technologies to reach the global online segment,” Questrom Dean Susan Fournier says. “We are excited to deliver on our social mission by making our high-quality online MBA accessible at a disruptive price point.”
It’s a price point that may be disruptive in more than one way. Because of the cost (at least initially), Boston Questrom likely will have little trouble attracting the 250-300 students it has targeted for the first intake — but if online success is just around the corner, a major crossroads also looms: What will become of Boston’s residential MBA programs, currently home to 300 full-time and 600 to 700 part-time students? Will the cost of running on-campus programs become too onerous to continue, as has been the case at other top-50 U.S. schools?
No chance, Fournier says.
“This is just such a central question,” Fournier tells Poets&Quants. “This is in no way a signal that our on-campus is dying. This is in no way a retreat from that market, or our commitment to it. More importantly, this is in no way in our mind a situation of substitutes. This is not substituting for the full-time MBA. That is a completely different segment. On campus, online — completely different segments. Different needs, different audiences, different programs, different programming experiences.”
‘RESPONSIBILITY’ TO KEEP ON-CAMPUS MBA PROGRAM ALIVE
Boston Questrom currently is ranked 42nd by Poets&Quants and 50th by U.S. News & World Report. This spring another top-50 business school in the United States, the University of Illinois at Urbana-Champaign (47th in U.S. News), joined Iowa Tippie in announcing plans to phase out its on-campus MBA programs to dedicate more resources to the online side. Illinois’ iMBA has taken off since being announced in 2016 for a price of just $22,000, with enrollment growing from an inaugural 300 to 2,600 today. Jeff Brown, dean of the Gies College of Business, told P&Q in May that going all-online plays to the school’s competitive advantages and positions Illinois “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.
Application volume for the Gies full-time MBA has fallen by about 25% since 2016. That’s a reality playing out in Boston, too, Fournier acknowledges, saying the Questrom School has not evaded the widely reported — and ongoing — slump in MBA applications at U.S. B-schools. So why wouldn’t Boston use the launch of its new online MBA to pivot away from its residential programs, which include a Professional Evening MBA, Executive MBA, Health Sector MBA, Social Impact MBA, and the MBA+ MS in Digital Innovation?
“On-campus programs that serve as templates for their online counterparts were designed, in many cases, decades ago. Using existing templates to create online programs and merely transferring commoditized core courses online means that they are not optimized for a global online audience,” says Fournier, who is also Questrom professor in management. In contrast, she adds, the new online MBA has been designed from the ground up, with the global online learner and digital delivery in mind.
The program can be completed in as little as 21 months, requiring nine to 16 hours of work per week. Each of five modules will end with what Questrom is calling an “action-learning experience” with a capstone project at the end of the program. Unlike some rival programs, Questrom’s online MBA will not offer any electives or residencies. It is 100% online.
The Questrom School is excited about its new offering but still believes strongly in its on-campus MBA, she emphasizes. “I think what’s important for you to know is that we’re not just continuing to invest in our on-campus, but we’re actually kind of doubling down on it,” Fournier says. “And we are building support because we believe in it. I would even go so far as to say that as an academic institution, I feel it’s my responsibility to be not only delivering on that value proposition, but to be increasing it in the face of the reality of the online marketplace, which allows you to reach different target audiences.
“There are a lot of things that you can do on-campus, face-to-face, the analogs for which in an online environment are weak at best. If we can’t as an industry create value around that and demonstrate why you might select offering B instead of offering A, then shame on us. I will say that in Illinois’ case, I don’t think there’s a direct correlation that they closed their full-time face-to-face because their online grew, because as I understand it things were going down for a while and they were down to one cohort. They were a little bit in the bleeding phase. We are not there. We’re not. We have a thriving part-time MBA program. We’re expecting a class of 130-plus full-time MBAs and we have 700 part-time MBAs walking around on any given day on campus. We’re not there.”
‘A LOT OF PEOPLE AT THE TOP’
At $24K, the price point of Boston Questrom’s new program aligns with the stated mission of both the school and edX to expand access to top-tier business education. “Digital business is all about scale,” Fournier says. “The online MBA market is price elastic, with degree offerings ranging from $11,000 to $132,000, with a median price of $75,000. We expect tuition for online MBA degrees to drop to get to scale. We decided to be in front of this trend.”
At the upper end, costing more than $120,000, are programs at Carnegie Mellon University and the University of North Carolina. (Go here to see our list of tuition at the top online MBA programs.) At the other end of the spectrum are a handful of schools that charge less than $30K, and, besides Illinois, four schools that currently charge less than $24,000: the University of Tennessee-Chattanooga, the University of Wisconsin MBA Consortium, Louisiana State University’s Ourso College of Business, and SUNY Oswego. Why did Boston Questrom decide to join these schools, instead of building the infrastructure that would allow them to create a program that rivals the more costly — but unquestionably more popular, and some would say more reputable — schools at the high end?
Short answer: It’s crowded at the top.
“You want to operate at scale — that’s like Business 101,” Fournier says. “The other thing is, you did a plot on your X-Y axis over there about enrollments and price. There are a lot of people at the top. It’s very crowded, increasingly crowded. And it’s interesting because we have a lot of anecdotal evidence about some of those programs priced at the top that after many, many years have still failed to be profitable. Part of that is about price elasticity. There’s also, we know, a new program coming in at around $90K. Our little anecdotal evidence suggests that they literally are not getting people in that program. So I think it’s already crowded at the top — and you know, far be it from me to predict the future, but I see a leveling coming.”
Even as the playing field levels, Boston Questrom will be ramping up.
“We’re building all these infrastructures that are going to be supporting this program and they also ramp up,” Fournier says. “So we want to ramp up our staff, our structures, our support mechanisms so that we can guarantee success.”