A $20,000 MBA degree from a business school whose residential MBA is ranked in the Top 50? You better believe it.
The University of Illinois at Urbana-Champaign today (May 4) announced a potential breakthrough in business education with the debut of the first massive open online course-based MBA degree in partnership with Coursera, the Silicon Valley-based online learning company. At a highly affordable price of just $20,000 per student, the school expects to have an initial online cohort of about 200 learners, but believes it can increase the annual intake to 1,500 in five years.
The school is touting the new program as the first ‘stackable’ MBA, meaning that a student can enter the program at any time and eventually build it into an MBA if he/she wants, stop at just a certificate, or just leave it at one course. It’s a low barrier of entry for those who might otherwise not pursue an MBA, but could benefit from the coursework.
This is the first time a single business school plans to put an entire MBA curriculum online for free. Students only pay if they want a certificate for completing a course (at a cost of $79 that is evenly split between Illinois and Coursera) or a sequence of courses for college credit ($1,000 per course or $3,000 for the specialization) or the actual MBA degree (which will end up costing roughly $20,000). The initiative, spurred by the Illinois College of Business’ 100th anniversary, brings up a thorny issue for educators: How many students will simply take all the courses for free, put them on a resume and present themselves to employers as having an MBA? And will most employers only recognize and reward those with the degree or will it ultimately make any difference?
‘WE BELIEVE THE iMBA IS A DISRUPTIVE CONCEPT’
Students who take two courses at a time can earn the MBA, which requires the completion of 18 courses or 72 credits, in two years. Students, however, would have as long as five years to gain the degree if they want to stretch out their coursework.
Though all of the courses in the iMBA curriculum will be offered on Coursera for free, the school is giving learners the option to pay for a series of related courses in specialized areas, from strategic marketing to entrepreneurship and innovation, for college credit. The credit for taking those courses and enrolling in supplemental “high engagement extensions” will allow learners to apply for admission to earn a University of Illinois MBA. “We can not guarantee that anyone who gets credit will be approved (for admission) because you still have to go through the admissions process,” says Raj Echambadi, associate dean of outreach and engagement at Illinois’ College of Business.
Ranked 40th best in the U.S. by Poets&Quants, Illinois admits a relatively small full-time MBA class with an average GMAT score of 659, accepting slightly more than 25% of the applicants who apply. Typically, however, acceptance rates and average GMATs for online programs are substantially below residential MBA programs because they often attract older, more experienced learners.
“We believe that the iMBA is a disruptive concept,” adds Echambadi in an interview with Poets&Quants. “We’ve re-imagined the online MBA in terms of the stackability of credentials, a novel hybrid combination of closed / open systems thereby bringing the power of the MOOCs into a traditional MBA classroom, and silo-busting through the creation of non-discipline-based “specializations” that can help a student to eventually build towards an MBA. We’re just beginning with this, but, to me, it is a truly disruptive concept.”
AT LEAST 22 OF THE TOP 50 U.S. BUSINESS SCHOOLS NOW HAVE ONLINE MBA DEGREES
As many as 180 business schools already offer online MBA degrees, including seven whose residential MBA programs rank among the Top 50 and at least another 14 from schools that rank in the second half of the Top 100 programs.
But what will clearly set the iMBA at Illinois apart from those offerings is cost. At roughly $20,000, it is the most affordable online MBA from any Top 50 business school in the U.S. and less than half the price of the school’s residential MBA program for in-state students. Illinois administrators say the low price tag is “one-third the cost of online MBAs from institutions of similar stature to the University of Illinois.”
In some cases, however, it is much cheaper. The cost of Illinois’ iMBA is only a quarter of the $80,000 charged by the University of Maryland’s online MBA program and one-sixth the $118,080 price of the online MBA program at Carnegie Mellon University’s Tepper School of Business. Tepper’s more rigorous 32-month hybrid program, however, includes in-person weekend classes six times annually.
‘THE iMBA ATTEMPTS TO DEMOCRATIZE HIGH-QUALITY EDUCATION’
“At some point in time, we need to start bringing the costs down and this is our initial foray into that purpose, adds Echambadi. “The iMBA attempts to democratize high-quality education, in the spirit of the great public universities. We hope to broaden the very definition of who an MBA student is. We believe that there is a large swath of people that would otherwise be closed out of getting a serious MBA now getting one. That will broaden the talent base and enable more people around the world to maximize their potential. This is a very different way to look at the MBA market and that’s hugely exciting.”
Eschambadi says he does not believe the online offerings will either cannibalize the existing residential MBA program at Illinois or lead to a round of major price cuts by online rivals.”Our numbers are too small: 200 in a market of 120,000 MBAs a year. I don’t think we are truly disruptive in that sense. I think of it as the price performance paradigm changes. This is to me the same quality as our face-to-face program because the students will be taught by the same faculty and have the same degree. But the difference is we don’t have the costs of infrastructure. We are co-creating with our customers and passing on those savings. It will allow the democratization of education.”
Eschambadi believes the online format will be welcomed by students who are different from those who come on campus. “I do think our online education appeals to a completely different segment than the full-time MBA students who want and need peer-to-peer, face-to-face learning and networking,” he says. “I am hoping that the iMBA will benefit our entire ecosystem. We believe that something like this will drive student recruitment for people who value face-to-face programs and also will augment other ways of delivering content. Having an online program is only going to bolster our face-to-face offerings.”
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