COMPARING THE TWO LOW-COST PROGRAMS
The school’s leadership, moreover, is busy dreaming up “value-added” programs to make its iMBA even more attractive. In the past year, the school offered online students the chance to do one of two ten-day global immersions in Brazil and Germany. Some 88 students signed up for the 30 available slots on the German trip which Gies priced at an additional $3,600, not including airfare. This year, Gies will double the global immersions to four, possibly including academic stints in South Africa and China, and will also do four to five mini-immersions in the U.S., the first of which is planned for Los Angeles in October when students will do a deep dive into the electric car industry.
BU is still working out many of the details of its offering, but the early decisions over the form and substance of its program suggest that it will be a big market winner, placing more pressure on more expensive online options from business schools that have ranked near or well below Illinois and BU. Like Gies, it will be the top faculty at Questrom that will teach its online courses and they, too, will do weekly live Internet classes in each course.
One big difference with Gies: Questrom has decided to create an MBA program of essentials with no elective choices or concentrations. “We are fundamentally rethinking the MBA,” says Questrom Dean Susan Fournier. “We have always aspired to be more integrated and now we can be because of the technology. We are getting faculty out of their silos and that is the biggest part of the culture change. All seven of the disciplines have something to contribute here. Contrast that with the broader tendencies of the MBAs where the mantra is ‘let’s get these core courses out of the way and move on.’ We are going in the opposite direction of that. Actually, we are going to give you 45 credits of what we think you absolutely need to know.”
WHAT DO ONLINE MBA STUDENTS SACRIFICE?
Students who take advantage of these price points also need to know that online MBA programs, as good as many have become, are not equal to each other or to their on-campus, two-year equivalents. At the very top of the line, Carnegie Mellon’s blended online MBA costs $136,000 but that price includes nearly 50 days of in-person sessions. Six times per year, over a 32-month period, students attend three-day Access Weekends that run from Friday to Sunday. Two-thirds of the curriculum is delivered on a synchronous basis. Translation: Your live and face-to-face sessions with your classmates and Carnegie Mellon professors account for the vast majority of the time you are in the program.
That is a very different experience. So is the traditional two-year, on-campus MBA which is especially ideal for career switchers who get to choose from a large menu of electives and gain a summer internship that sets them up for a full-time job offer. In on-campus programs, there’s one-on-one coaching and mentoring, greater access to faculty, a parade of recruiters who come to campus to hire students, deeper bonding among students, along with a more enduring alumni network.
After all, in Gies’ iMBA program, the number of students who attend the weekly live classes can number 500 or more. Class size in other quality, though more costly, online MBA programs is often limited. At Indiana University’s Kelley School, for example, the upper limit on a live Internet class in its KelleyDirect program is just 50 students.
THESE PROGRAMS ARE A THREAT TO THE EXISTING FINANCIAL MODEL OF A BUSINESS SCHOOL
Obviously, those advantages come at a cost that many can either not afford or desire. The bigger concern in the academy is the threat these disruptive programs pose to a business school’s financial model. Business school faculty are among the highest-paid academics in a university. The career services function is also an expensive proposition that few other schools or departments in a university even worry about. Add to this the fact that business education is fiercely competitive and more responsive to market needs than just about any other university discipline. All this costs money, big money.
Can the existing higher education model sustain itself on bargain rate tuitions? Questrom Dean Fournier thinks so, but only if a school has a wide portfolio of programs and makes up the online portion with volume. “We are tuition-dependent,” she says. “Our business model looks toward a healthy product portfolio to give us revenue. One of the pieces is a program with significant growth potential. We aim to be a force of nature in that segment. So we see a significant boost to our revenue. This is a volume play. We are not putting all our eggs in the $24,000 online basket.”
Whatever the outcome, the advantage here goes to the potential student who can get a highly valued degree for a fraction of the cost. “The MBA is still one of the most if not the most coveted degrees out there,” says Fournier. “There are still a lot of quality people out there who wish they could get this credential.”
Especially at $22,000 or $24,000.