The value of an MBA is clear and quantifiable. Data overwhelmingly demonstrate that companies look to hire Master of Business Administration graduates (more than three-quarters do every year). The average starting salary for MBA graduates is about $85,000, representing a greater-than-fifty-percent income boost; graduates from high-profile business schools tend to earn substantially more. Most importantly, graduates of MBA degree programs leave school with access to a useful network of professional contacts. That can lead to a lifetime of compelling and lucrative opportunities.
So, why don't more people pursue graduate-level business degrees? One obvious reason: it's not that easy. Academically, B-school is challenging. Then there's figuring it out how to fit it into your life. To attend a full-time on-campus program, you'll very likely need to relocate. You'll also have to forfeit approximately two years of work, enduring the consequent loss of experience and income. That's not a commitment everyone can make.
There's another option: the online MBA. Colleges and universities have been adapting their MBA programs for distance learners for decades. Still, it's only fairly recently that many prestigious online MBA programs have joined the game.
In this article, we consider the question is an online MBA worth it? by addressing the following questions:
On paper, online MBAs are virtually identical to on-campus programs. All MBA programs, regardless of format, teach business students the skills they need to succeed in executive-level and management positions, launch careers in consulting, or run their own companies. Many of the learning experiences are the same.
Core coursework covers:
Online MBA programs also have the same types of experiential learning requirements as traditional MBA programs. These typically involve internships and capstone projects completed by individual students. At some schools, they take the form of intensive campus residencies or excursions. At Southern Methodist University's Edwin L. Cox School of Business, for instance, students pursuing MBAs online participate in at least two four-day, in-person immersions that can take place in cities in the US or in business centers around the world. Over those four days, advanced degree students in business programs work on real-world consulting projects for local companies.
The most significant difference between online MBA programs and on-campus programs is that programs for distance learners can't replicate the full MBA experience. On-campus students benefit from a constant stream of networking lunches, job fairs, and events with industry speakers. Online students can't get all that. That's not to say online students receive no such benefits—on the contrary, most online programs dedicate staff to internship and job placement for online students. Many schedule campus residencies, excursions, and immersion events to build cohort cohesion and promote networking.
It might seem like online MBA programs have a lot to offer experienced professionals who are looking for a way to earn more money or advance more quickly, but less to offer career switchers who don't already have an established network. Perhaps in some cases, but a degree from Indiana University - Bloomington's Kelley School of Business or Carnegie Mellon University's Tepper School of Business is going to take you places regardless of how you earned it. That's not just because the top business schools make an effort to give online MBA students an experience as close to that which on-campus students receive. It's also the name-recognition value.
Flexibility makes online MBA programs attractive. There are online MBA programs with customizable—and even self-directed—schedules designed for students who must continue working while studying. You'll also find parents of young children and other people with demanding personal commitments in these programs.
Online programs benefit students who aren't located near major metro areas and business hubs, allowing them to enroll in top schools without relocating. In some cases, online MBA programs can be completed more quickly than traditional programs, which typically take two years. The fastest online MBA programs take only about a year.
Are any of the shortest MBA programs or the most flexible ones at top business schools? No, but the takeaway here is that what makes an online MBA worth it will be different for everyone. Some people need maximum flexibility to get a degree. Others need to get a degree fast because they need to start earning more money as quickly as possible. Earning an MBA online from University of North Carolina at Chapel Hill's Kenan-Flagler Business School will always be better than earning the same degree from a school with no national reputation. That said, any MBA from a reputable school will boost your resume and your job prospects.
Obviously, cost is a factor when you're calculating the value of a degree program. MBA programs are notoriously expensive compared to other master's degree programs. Still, the bump in salary people get from a field-specific MBA (e.g., an MBA in Healthcare Administration) tends to be higher than they'd get after earning a Master of Science or Master of Arts degree in the same field.
Not every online MBA program costs as much as the one offered through the Kelley Direct program at Indiana University's Kelley School of Business (with its $70,000+ price tag). Some colleges and universities deliver their online MBAs for $20,000 or less. The most expensive online MBA programs (which can be found at Tepper and Kenan-Flagler) cost upwards of $120,000. In contrast, online students at the University of Tulsa can typically complete the program for under $40,000 after accounting for scholarships.
If you can afford to enroll in an online MBA program at a top business school and have the GMAT scores and the bona fides to get accepted, do it. If you can't afford it and your employer won't foot the bill—employer funding is becoming much less common—do it anyway. You'll more than likely be able to pay off any loans you take out to finance your MBA much more quickly than the average graduate student.
If you don't have the qualifications necessary to get into a top online MBA program, you have some thinking to do. It might make sense to wait a few years to apply, during which you can work on improving your applicant profile. On the other hand, if you have years of work experience, a less expensive MBA from a less prestigious school may be enough to get you past a frustrating mid-career plateau.
This question assumes that an online MBA is an online MBA, but that's far from the case (more on this below). As you've probably guessed by now, you'll get the biggest returns from nationally renowned schools. Tepper MBA graduates see an average increase on pre-MBA salaries of 126 percent. Graduates of the online MBA program offered by University of Michigan - Ann Arbor's Stephen M. Ross School of Business see an average increase of 103 percent.
Don't assume you have to stick to schools at the top of the school rankings to get the biggest salary bump, however. North Carolina State University at Raleigh's Poole College of Management ranks #15 on U.S. News and World Report's list of the best online MBA programs, but graduates typically see a 129 percent salary increase.
Of course, these averages don't guarantee that you'll see the same increase when you graduate. Your chances of earning top dollar after getting an MBA online will be higher, however, if you graduate from a big-name school versus one of the most affordable online MBA programs.
Most online degree programs at every level (including bachelor's degree programs) confer the same diplomas as on-campus programs. It's also uncommon for potential employers to ask a lot of questions about how you earned your degree. So, no, they do not.
When hiring managers do dig into the MBA format you chose, you might discover that the fact that you graduated from an online program is actually an asset. Your online MBA is proof that you can work independently. Additionally—if you completed a part-time or executive program (like those offered by Howard University's School of Business or University of Michigan - Ann Arbor's Stephen M. Ross School of Business) while also working—it demonstrates that you have above-average time management skills and grit.
Where you get your online MBA matters, but no more or less than it does when you choose among on-campus, full-time programs. The best business schools have a reputation for providing MBA students not just a solid education, but also access to network building and employment opportunities. These colleges and universities put as much care and effort into their programs for distance learners. The Kelly Direct program, for instance, has done a lot to ensure that students in the program get as much out of it as students in its on-campus, full-time MBA program. When you study online, you work with a career coach and receive guidance related to professional development, have the option of completing several immersive experiences in the US or abroad, and can even join the Student Leadership Association.
The bottom line is that an online MBA from a prestigious school will carry as much weight when you're looking for work or negotiating a raise as any other degree from the same school. Consequently, the best advice we can offer is that online MBA programs are only as good as the colleges and universities offering them. To find a great program, don't just look at lists of the best online MBA programs. Look at school rankings to identify the top business schools, then see whether those schools offer their MBAs online—you'll find many do.
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