Online MBAs Gain Ground in the US

Online learning has exploded in popularity in the wake of the Covid-19 pandemic and the strong US jobs market

The Online MBA has been slow to take off in the US, the largest and most important market for graduate business education. While a number of the best European business education brands run very successful online versions of their MBA programs, and many mid-tier US schools do as well, the leading American institutions have largely shunned Online MBAs.

That is starting to change, though, as online learning explodes in popularity in the wake of the Covid-19 pandemic and the strong US jobs market reduces the appeal of taking two years out of work, missing out on potential salary raises and promotions, to study full-time on campus.

This year, two of the highest-ranking US business schools will enrol their first cohorts to their part-time MBA programs which are delivered in a blended format: online with some face-to-face sessions. New York University’s Stern School of Business and the Haas School of Business at the University of California, Berkeley are entering a growth market, but they are behind some of their rivals.  

A crowded Online MBA market

The two institutions will face competition from a number of other US schools that offer fully online or blended MBAs including the University of Southern California’s Marshall School of Business, Carnegie Mellon University’s Tepper School of Business, and the University of Michigan Ross School of Business.

The expansion of the Online MBA market in the US comes as the digital version of the degree overtakes the full-time MBA in terms of total enrolment. Acceptance of Online MBAs is growing as changes in working practices triggered by the pandemic stick.

Both Berkeley Haas and NYU Stern have elected not to call their programs “online” MBAs, however, preferring the terms “Online/Modular Option” and “Flex Option”, respectively.

Jamie Breen, the assistant dean of MBA programs for working professionals at Berkeley Haas, says he’s seen very strong interest in the school’s new Flex Option, which is oversubscribed.

“Our original target for the class was 65 students, but we increased that to 70,” he says. “We had even more demand, but we decided to cap it at 70 students for our initial cohort as the faculty and the program are learning how best to support these students.”

The new Flex option offers the same curriculum and faculty and the same Berkeley Haas MBA degree, but in a flexible online and on-campus format. Students enrolled in the Flex option will take their core MBA courses online. After completing their first three semesters, students then take their elective courses either in person on campus or online.

“A flexible format allows students to gain the same high-quality MBA without the commute,” says Breen. “We launched Flex to prioritize flexibility in attendance, to adapt to the changing environment, and to allow learning from anywhere.”

Demand for Online MBAs is rising

Demand for flexible degree formats continues to rise. In the 2020-2021 academic year, 45,038 students were enrolled in Online MBA options in the US, compared to 43,740 in full-time programs, according to AACSB International, which accredits MBA programs.

“I would hesitate to call it a tipping point, but I can say that we have seen strong interest from highly-qualified students for the Flex cohort,” Breen says. “As one of our incoming students said, ‘I’ve been waiting for a top MBA program to offer an online format.’”  

NYU Stern and Berkeley Haas may be late to the party, but most of the other top US schools — including Harvard, Stanford, Wharton and Chicago Booth — do not offer Online MBAs. That may well change in the coming years, however, with a recent survey showing that 89 percent of business school deans expect one of these top-five institutions to launch an Online MBA in the next three to five years. The poll, by higher education consulting firm Eduvantis, was carried out in 2021.  

“It is safe to assume that every school is thinking through their online experience and what that translates to, whether it be a full program, a hybrid option, or non- degree granting programs,” says Patti Russo, managing director of part-time MBA programs at Michigan Ross.

Michigan Ross was a leader among top business schools in the US in launching its Online MBA in 2019. Russo says applications for the program continue to increase each year, helped by the impact of coronavirus.

Coronavirus impact on applications

“The Covid-19 pandemic caused many learning and working environments to move virtually, and this has caused people to rethink the traditional, residential-based MBA experience,” she says.

“Across the board, people have seen that online learning can work and provide advantages to students who are looking for added flexibility and accessibility in their MBA program. In addition, digital education technology continues to improve, which can create a higher quality and more engaging online learning environment.”

While full-time MBA programs are counter-cyclical, demand for part-time options tends to move with the economic cycle. The hot job market will make senior working professionals less willing to put their career on pause to go back to school, but the online format enables them to continue earning while they upgrade their credentials.

Russo says: “We know people are interested in flexibility in pursuing their MBA, and they are interested in continuing to work and keeping their jobs.”  

One barrier for these top US schools is the cost of their Online MBAs. Many of the biggest brand institutions charge similar rates to their full-time courses. Breen at Berkeley Haas admits “it could be” a barrier to some students, though he adds that the school offers scholarships and other forms of financial aid to support MBA candidates.  

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