Jackie Pham is the perfect candidate for an MBA. A banking investment analyst with a business bachelor’s, he has years of experience in both finance and consulting, having worked for two of the biggest banks in the United States. He’s the right age — 28 — and he’s looking to move into management.
Pham could have applied — and had a good shot at admission — to many elite MBA programs. Two major factors swayed him away from residential and toward online: Covid and cost.
“A lot of my family members got Covid,” Pham tells Poets&Quants. “It really resonated with me. It’s kind of a difficult time right now for everyone — globally, not just inside of the States. And I guess the second thing was the price difference. In-person programs, like any of the top-20s — if I had gone in person I would’ve definitely tried to go to any of the top 20 programs — they’re running like 120 grand.”
MAKING THE CHOICE
Covid concerns may fade with time, but sticker shock is only getting more pronounced as the price tag on a two-year MBA goes up every year. The average cost of an MBA in the United States now exceeds $200,000 at 15 schools, with three more nearly that much — and despite the prevalence of scholarships and other funding options, the reality of the debt burden involved sends a lot of candidates looking elsewhere, or deciding to forego a degree altogether.
For many, “elsewhere” is the online MBA. Though some elite OMBA programs carry hefty price tags as well, one program that is both elite and a relative bargain is the Kelley Direct Online program at Indiana University, which is both a pioneer and a runaway leader in the space. Kelley Direct’s current tuition is just over $80,000, and for Jackie Pham, that was a deal-maker.
“That’s about a 40-grand difference with the residential programs,” Pham points out, though the gap is much wider when the conversation turns to the very top B-schools. “And it’s not accounting for the opportunity cost and the income that you can get during that time. And that was also one of my biggest factors — that my work experience is extremely relevant to what I want to be in.”
EXPERIENCE > EDUCATION … BUT EXPERIENCE + EDUCATION IS EVEN BETTER
The biggest question hanging over the online MBA market is whether employers see it as a satisfactory alternative to the traditional degree. According to a 2022 survey from the Graduate Management Admission Council, while the OMBA is widely accepted and respected by European employers, it has yet to gain widespread acceptance among American recruiters, with just 29% in the U.S. agreeing that they view graduates of online and in-person programs equally — lowest of any world region and down from 33% of respondents in GMAC’s survey a year earlier.
That doesn’t concern Pham. Experience trumps education, he says — and with Kelley Direct, as with any online MBA, he continues accruing experience while studying.
“One thing I really learned as I got older: When I was younger, I was like, ‘Man, maybe I should just pivot right into an MBA program and try my best.’ But the older I get and the more work experience I accumulate, experience trumps education by miles. Miles.”
But while experience may trump education, he adds, experience plus education is even better.
“I was right about at that four-year mark where I was like, ‘OK, let me try and pursue higher education,'” he says. “I’m at that point in my career where I’ve been a senior financial analyst for a year and a half, now two years, and maybe I can pivot into a managerial role. Now it’s the right time to add an MBA to my CV.”
‘THE MARKET WAS WAY AHEAD … AND SAW THIS AS AN EQUAL PROGRAM’
The suggestion that online MBAs might not be as valued as their residential cousins is the quickest way to erase the smile from the faces of Will Geoghegan and Sarah Wanger — and to spark a flurry of convincing counterarguments. Geoghegan, clinical associate professor of management and entrepreneurship and chair of the Kelley Direct program, and Wanger, executive director of Kelley Direct programs, understandably see OMBAs generally — and Kelley Direct specifically — as equals to the top residential MBA programs, not only in terms of strength of curricula. They even make the case that in some ways, flexibility chief among them, online is superior to in-person.
You certainly could argue that that’s the case with Kelley Direct. Its faculty, numbering about 100, is second to none and deeply involved with curricular innovations; varied does not begin to capture the quality of its course content, which is comprised of about half electives; and, thanks to a $10 million upgrade in 2020 to its Jellison Studios Classroom, few other major OMBA programs compare in terms of state-of-the-art design and delivery.
How, then, is Kelley Direct not the equal of any major residential MBA program?
“I believe that the way in which the online modality has developed over the last 20 years, that we’ve gone from an antiquated view with discussion boards and a lack of engagement to now being able to reconcile those traditional tradeoffs,” Geoghegan says.
“When we’re talking with prospective students, we never get that question anymore,” Wanger says. “We used to all the time. When I started in 2019, I got it all the time: ‘Tell me about how you compare to your full-time program? Is my employer going to see this as legit?’ Before Covid even, I was noticing that that was going away. Folks were noticing and even our students were saying it.
“One of our alums works at Amazon. He works at Amazon and he was like, ‘Actually my boss told me to do an online program because then I knew that you could multitask. I knew that you know how to prioritize.’ So when I was hearing that, it was this epiphany. To me, it was like, ‘Oh, this idea that online programs are less than is still something I think higher eds have been telling ourselves: ‘Oh, we still aren’t seen as quite right in the marketplace.’ No, actually the market was way ahead of us and saw this as an equal program. I think we still talk about it amongst ourselves too much — and really the market is not telling us that.”