Applications to full-time M.B.A. programs have been falling in the strong job market, leading business schools to shift resources online
The 42 University of Iowa graduates who got their master’s in business administration degrees in May marked the end of an era for 160-year-old Tippie College of Business: They were its last class of full-time M.B.A.s.
Tippie joins a growing list of U.S. business schools shutting down their flagship M.B.A. programs in favor of shorter, specialized masters and online degrees.
In May, the University of Illinois at Urbana-Champaign and Stetson University in Florida said they would stop admitting new students to their full-time, on-campus M.B.A. programs, funneling resources instead to more popular online equivalents.
Applications to traditional M.B.A. programs have languished in a strong U.S. job market, declining last year even at Harvard Business School, Stanford University’s Graduate School of Business and other elite schools. Administrators say millennials, saddled with more college debt than previous generations, have grown more reluctant to leave jobs for a year or more to pursue one of the nation’s priciest degrees.
Between 2014 and 2018, the number of accredited full-time M.B.A. programs in the U.S. shrank 9% to 1,189, with schools reporting 119 fewer two-year degrees in the most recent survey by the Association to Advance Collegiate Schools of Business. Wake Forest University and Virginia Polytechnic Institute and State University, commonly known as Virginia Tech, are among the others to recently cut their traditional M.B.A. programs.
Against that backdrop, shorter and more-flexible graduate business degrees have proliferated. At the business schools in the same survey, there were 140 new masters programs in specialized subjects like data analytics last year, marking a 16% jump from 2014, to 981. The data show online M.B.A. offerings, meanwhile, doubled to 390.
Business is the most popular field for students pursuing post-college degrees, but the strong economy has been hard on other American graduate schools too.
Full-time enrollment is down across master’s and doctoral programs in the arts and humanities, education and social sciences, according to an October report by the Council of Graduate Schools. Over the last five years, online and part-time degrees have gained ground in those fields, the data show. In 2017, there were 1.34 million graduate students over the age of 25 taking classes part-time, according to the latest Census Bureau statistics, reflecting an 8% jump on the year. The number of full-time students dropped 12% over that same period, falling just shy of 1.3 million.
“If you were able to get every dean in the U.S. under a lie detector, outside of maybe the top 20 M.B.A. programs, every one of them would admit they were struggling to maintain enrollment and losing money on the program,” said Jeffrey Brown, dean of the Gies College of Business at the University of Illinois. After the incoming class this fall completes its studies, students will no longer be able to pursue part-time or full-time M.B.A.s at Gies, although it will continue to offer an online M.B.A.
Gies College said it had 49 full-time M.B.A. students last year, down from 74 in 2015, and 38 students have paid the $1,000 deposit for the program starting this fall-the last full-time M.B.A. class at Gies.
Applications to the online M.B.A. program have tripled at Gies since 2016. Around 2,000 students are now enrolled in that program, which costs less than $22,000 to complete, the school said. The full-time M.B.A. costs $58,000 or more in tuition and fees, and it is expected to lose $2 million this year, Mr. Brown said.
The Gies M.B.A. program was ranked among the country’s top 50 business schools by U.S. News & World Report this year. But with limited financial and faculty resources, and growing demand for the online M.B.A., the choice was clear to the dean.
“This was an easy business decision to make, and a relatively easy educational decision, but it was an extremely hard call to make from the emotional side of things,” Mr. Brown said.
Jade Manternach, who graduated last month with her M.B.A. from the Tippie school in Iowa, said she understood the financial challenges schools are facing yet felt an online degree wouldn’t have provided all the same benefits to students, like her, who are hoping to switch careers.
“The real value of the M.B.A. is not what you learn, it’s who you meet and how you’re challenged by the experience, and the confidence it brings to rise to those challenges,” the 26-year-old aspiring entrepreneur said.
She and other members of the Tippie school’s last cohort of traditional M.B.A.s got T-shirts from the school that read: “Iowa Full-Time MBA: You Can’t Get In.”
Alaa Elhawwari, a 36-year-old training leader for General Motors Co. in Dubai and an online University of Illinois M.B.A. student, said he found the virtual program better than any on-campus alternative. Before enrolling last year, he had been looking to sharpen his financial and management skills, he said, but was traveling too much to juggle a full-time or executive M.B.A. program.
“I have a global network of classmates in c-suite and director-level roles around the world now, and have learned so much from these people and the experiences we’ve shared together,” said Mr. Elhawwari, who expects to complete his degree in December. He plans to fly to Illinois to walk with other Gies graduates in May. An online degree, he added, “is the future”.
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