Mixed Signals On The Acceptance Of Online Degrees

Sangeet Chowfla, former CEO of the Graduate Management Admissions Council, reflects on the business of business education

I have long been intrigued by this topic and follow the data closely.

A decade ago, MOOCs were being touted as “degree killers” that would make education available to all and eliminate demand for in-person education. It did not happen. MOOCs certainly had an impact, but more in expanding the pie and catering to newer segments than impacting traditional degree formats. Then, the Pandemic created even more fundamental changes.

Schools were forced to move their own degree programs to online formats and discovered that they could expand their reach by doing so. Online programming became mainstream. Is this the future?

THE DATA PRESENT A MIXED PICTURE FOR ONLINE LEARNING

The evidence is mixed, and it may be wise to take a more nuanced view than one that is skewed towards one or the other direction.

Let’s first look at the data. GMAC’s 2023 prospective students survey indicated that demand for pure online degrees was still a small proportion of the overall pie. Students in the US were the most open to consider such a degree while those in other parts of the world were more reticent. Figure 1 shows the proportion of surveyed prospective students who indicated that they were most interested in a particular program format.

Three things stand out to me from this data. One is that in-person programs still dominate student interest. While interest in other formats is growing, it has still not reached a tipping point. The second is that interest in hybrid is growing faster than pure online, and the third is that U.S. interest is an outlier begging the question about whether it is a signal of future online interest.

We should also consider whether there is some inherent bias in the data. We know intuitively that online programs appeal more to working professionals (the “part-time” cohort) and these are underrepresented in GMAC data that relies more on GMAT and mba.com visitors which are skewed towards the full-time cohort. Other data sets seem to indicate somewhat greater interest in online and hybrid. Carrington Crisp reports that interest in these formats combined is at 39% for MBA prospects and 29% for master’s degree candidates in business. The gap could be attributed to the higher percentages of part-time MBAs versus part-time master’s.

IN-PERSON LEARNING STILL DOMINATES

Regardless, one thing is clear. In-person learning still dominates. Why would that be? The biggest factor seems to be that the perceived impact of these formats on future careers is different in the minds of students. The same GMAC sample, when asked whether career opportunities were the same after studying in these formats, had widely different responses. Of those who had previously indicated an interest in in-person programs (the vast majority) only 7% agreed that their career opportunities would be the same regardless of program format while 77% disagreed. Even amongst the minority that preferred online-only programs, just 53% said that their career opportunities would be the same regardless of program format and a significant 20% disagreed. It seems that they were choosing online formats for reasons other than the advancement of their careers – a dangerous place to be for programs that are primarily oriented toward career growth.

So where are recruiters on this? In many ways, they will be the final arbiters of this debate. Here the picture is slightly more in favor of online programs. In a separate survey (the GMAC corporate recruiters survey 2023), 54% of recruiters said that their organizations equally valued online and in-person graduates and only 18% said that they did not. However, there were important caveats. Only 32% of the recruiters in consulting said that they valued both formats equally and 64% of all recruiters said that in-person programs prepared graduates with better leadership and communication skills.

So where does this leave us? Digital technologies are an important tool that increases access and efficiency and allows us to use valuable classroom time more efficiently. I also believe that much of education is experiential, and we are still struggling to bring the full richness of the in-person experience – whether in the classroom or in working on a case with your peers – through purely digital means. This experiential aspect is probably more valuable the earlier you are in your career. Younger, less experienced, MiM students need that in-person connectivity more than an Executive MBA student who is more able to grasp a concept remotely but also less in need of peer group interaction and motivation. The younger students also are more likely to study full-time and value the social and geographical benefits of a university environment. Older students are more grounded in an existing job, location and family.

IS BUSINESS EDUCATION EXPERIENCING THE SAME TREND AS ELECTRIC VEHICLES

In the end, we need to avoid an either/or approach. Like most things in life, it depends upon the problem that we are trying to solve and the student segment that we are serving. Working professionals clearly benefit from the efficiency of digital formats and most part-time programs are going online. The traditional MBA programs, while being able to use the efficiency of digital delivery, would probably need to continue to have significant in-person components. Pre experience master’s students tell us that they want to get back into the classroom (see Carrington Crisp’s Tomorrow’s Masters report 2023) while those pursuing certain specialized masters programs may be more comfortable online as they are more focused on the techniques of their trade rather and an experience.

It’s a mixed bag and online/digital is an important tool in our trade. I (and the data tells us students and recruiters also) don’t believe that it is the answer to everything. Better to think of it as a delivery mechanism, not as a program format per se.

Just this morning, before I sat down to write this column, I was reading an article in the Journal about how growth in electric vehicles had stalled in favor of hybrids. It was not that the technology would not be an important part of the future of transportation nor that they were not growing – it was just that mainstream consumers were cautious that the technology (range) or infrastructure (charging) was not there and were pivoting towards hybrids that gave a bit of the benefits of both. Might this be analogous to our current discussion? The technology and infrastructure may not be there for pure online in many cases and hybrid solutions may be the best fit for the times.

Author and former GMAC CEO Sangeet Chowfla

Sangeet Chowfla led the Graduate Management Admissions Council as president and CEO for nearly ten years from 2014 to 2022. A globally recognized and respected executive with deep experience in the technology, telecommunications, and venture capital sectors, he began his career in New Delhi with IBM/IDM. Chowfla went on to spend 18 years with Hewlett-Packard Co. in Europe, the Middle East, Asia Pacific, and the United States. He culminated his tenure with the company as vice president and general manager of the Inkjet Media Division from 1995-2001. He then moved to Timeline Ventures as a partner in the venture capital partnership. In 2007, Chowfla became the chief strategy officer and executive vice president of the Mobile Services and Global Market Units of Comviva Technologies, a leading Indian telecommunications software company. Chowfla joined GMAC during a period of disruption in the organization and industry. During the last three years of his tenure, he helped to stabilize the candidate pipeline, renewed GMAT exam growth, diversified GMAC’s footprint and ensured a strong financial foundation to enable future investment.