Have Online MBA Programs Jumped The Shark?

Getting an MBA online has many advantages over an in-person program. For one thing, it’s considerably less expensive. It doesn’t require you to quit your job and walk away from a paycheck. And it’s remarkably flexible, allowing students to start a program several times a year and to complete the degree more often than not in as little as two years or as long as five.

That’s why online MBA students have outnumbered on-campus students since 2020, according to a recent whitepaper by Validated Insights Inc., a higher education research firm. As of the fall of 2023, 58% of enrolled MBA students are online. No wonder, business schools have rushed to launch online MBA programs. “Demand for online programs is driven by students not taking a graduate admissions test,” concludes Validated. As previously reported by Poets&Quants, the firm is predicting an annual 3.2% growth in MBA enrollments through 2030.

What’s clear, however, is that there are now too many business schools chasing too few online MBA students. In the past five years, the number of online MBA programs has exploded by nearly a third. In 2018 there were 555 online MBA programs. By 2023, that number had jumped to 732. The vast majority of these programs are at local and regional business schools and are largely commoditized with little differentiation.

Not surprisingly, that explosive growth in online MBA education has caused the average enrollment per program to decline to 182 in 2023 from 215 in 2018. Enrollment per program reached a peak during the pandemic when it hit a record 315-student average per program in 2020. The chart below tells the story quite well.

online MBA

Source: MBA Insights Report from Validated Insights Inc.

What the chart reveals is something that any 101 Economics course would tell you: supply is outstripping demand. One predictable outcome is what that excessive supply is doing to pricing. It’s going down. In fact, Validated found that the average cost of an online MBA is now just $31,500 (see chart below).

What a student gets for that money is nowhere near what one would get from a fully-featured online MBA with a greater emphasis on admission standards, a broader portfolio of electives, weekly online classes, in-person immersions, one-on-one coaching, and the prestige of a branded business school. Yes, there are true values in the MBA marketplace, particularly the disruptively priced online MBAs at the University of Illinois’ Gies College of Business and Boston University’s Questrom School of Business. Both offer online programs for about $25,000 each. But they are true exceptions.

online MBA

Source: MBA Insights Report from Validated Insights, Inc.

It’s equally fascinating that most deans appear to believe that affordability is the future of online learning. They believe that online offerings should not only be cheaper than full-time MBA programs but also less expensive than traditional part-time programs that require students to attend classes during weeknights. As of 2024, 61% of business school deans believe competitively priced MBAs from strong brands will lead the online MBA market (see chart below).

online MBA

Source: MBA Insights Report from Validated Insights Inc.

Business school deans, moreover, are far more optimistic about the future of online MBA education than their university bosses or their one online program administrators. The takeaway: Deans may not know how hard it has become to both recruit and enroll online MBA students..

online MBA

MBA Insights Report from Validated Insights Inc.

Nonetheless, MBA students enrolled in online programs surpassed those studying in-person five years ago in 2020 and continue to exceed enrollments in on-campus programs. The clear preference today is for an online MBA over either a traditional part-time or full-time experience (see chart below). If not for the growth in online education during the past five years, the MBA would have suffered a bigger decline in enrollment in the U.S.

online MBA

Source: MBA Insights Report from Validated Insights Inc.

Moreover, data shows that student interest in studying online has seen a dramatic increase since the pandemic. In fact, Validated points to data from several sources showing that the percentage of prospective MBA students preferring an online MBA program doubled from 2018 to 2023 (see chart below).

online MBA

Source: MBA Insights Report from Validated Insights Inc.

DON’T MISS: Poets&Quants’ Best Online MBA Programs For 2025 or How Online MBA Graduates Rate Their Programs