Millenial Shifts, Diversity & Online Degrees Pose Challenges For Part-Time MBA Programs

Diversity and gender issues are a continuing challenge for part-time MBA programs in the U.S., according to GMAC. African Americans are 13% of the U.S. population and earn 11% of the bachelor’s degrees, but are just 6% of part-time MBA candidates. Women, meanwhile, are 51% of the population and earn most of the bachelor’s degrees (57%), but are just 36% of the part-time MBA candidates. GMAC photo

A lot of things are going right for part-time MBA programs in the United States, which remain the most popular delivery mechanism for the degree. Hiring out of these programs is seeing a surge right now. Most part-time MBA programs with lockstep, or cohort-based, formats have grown their application volume in the last three years. And part-time isn’t suffering the decline — and somewhat alarming prognosis — that full-time programs are experiencing. But there are warning signs, as the Graduate Management Admission Council details in its latest report, Keeping Pace: Insights & Strategies for the Future of U.S. Part-Time MBA Programs, released today (April 24). Chief among them: a persistent stagnation in demand in the 10 years since the Great Recession, and a scattershot approach in reversing it.

Part-time MBA programs’ declining popularity is no new development. Long considered the “workhorses” of the industry, the programs have long been a welcome revenue stream for business schools that help support loss-leader programs and initiatives, writes Matt Hazenbush, GMAC research communications senior manager and author of the new study — “nearly synonymous with graduate management education itself.” But since a huge drop-off in application volume after 2008, the programs have been on a gradual but consistent decline, and permanently sub-50% in volume growth. In GMAC’s 2016 Application Trends Survey, 43% of part-time MBA programs reported volume growth, compared with 50% that reported declining volume. Nearly half (49%) of all part-time MBA programs surveyed reported plans to reduce the size of their next class.

There are a few clear indicators as to what’s happening, Hazenbush writes, pointing to a trio of culprits. First, there has been a huge shift in expectations in the population most likely to pursue an MBA part-time: millennials. Hazenbush also notes a clog in the diversity pipeline that is preventing target populations like women and under-represented minorities from joining part-time programs in greater numbers, despite their real and projected rise in participation in other graduate programs. Finally, he posits what is having perhaps the greatest negative effect of all: the rise of online MBA programs and the proliferation of massive open online courses, or MOOCs, which are “making inroads in the online degree and credentialing spaces.” Hazenbush also offers a slate of suggestions to reverse the stagnation part-time programs are experiencing, from better engagement with employers to better marketing of the advantages of the format.


Millennials — persons born between the years 1981 and 1997 — now represent nearly nine in 10 part-time MBA candidates, Hazenbush writes, and they have different expectations, needs, and goals than their counterparts in previous generations, particularly around “expectations for a community experience, their need for flexibility and the ability to specialize, and career goals that are more likely to include changing employers.” Millennial candidates, he writes, are also increasingly concerned about the cost of a degree, and their employers are less likely to help them pay for it than in the past.

No doubt because of these shifting expectations and needs, U.S. lockstep part-time MBA programs have outperformed self-paced programs in terms of application volume growth for the last four years, according to GMAC. Most recently, in 2017, 54% of lockstep programs reported application volume growth compared with only 34% of self-paced programs — the largest percentage point difference between the two program formats in the four-year trend. Among alumni of part-time MBA programs from the graduation years 2011 to 2017, a greater share alumni assesses the overall value of their education as excellent or outstanding (81%) compared with self-paced program graduates (76%); meanwhile, lockstep grads are also more likely than self-paced grads to agree that they developed their professional network (87% versus 80%), that they could not have obtained their current job without their degree (63% versus 54%), and that compared with peers without their credential they’ve received more promotions (68% versus 61%). 

“More than Gen X candidates,” Hazenbush writes, “millennials prefer a close-knit program community with ample opportunities for team learning and extracurricular activities. They prefer in-person to online coursework, seek flexible scheduling options, and want to be able to focus their studies around a specialization. They are more likely than Gen X candidates to plan to leave their current employer after earning their degree, and are more likely to choose their part-time program based on the quality of their career services.”

About the price tag: Most millennial candidates have reservations about the overall cost of a degree and the prospect of taking on more student debt, Hazenbush writes, as many are still paying off loans from their undergraduate studies. While part-time MBA students could count on their employers to help pay the cost 20 or 30 years ago, today that’s increasingly not the case: just 14% of the part-time MBA class of 2016 received full tuition support from their employer.


Put simply, part-time MBA programs need to diversify their candidate pipelines to grow overall demand, Hazenbush writes, noting that Hispanic-American participation in graduate education is projected by the National Center for Education Statistics to have grown by more than 33% by 2020, while the participation of those identifying as two or more races is projected to have grown by more than 136% since 2010. To date, however, this shift has not been seen in the U.S. part-time MBA candidate pipeline, Hazenbush writes, where, “Compared with their representation in the U.S. population and among bachelor’s degree earners, U.S. minority populations — and women — have been chronically underrepresented.” He notes that despite accounting for 18% of the U.S. population and earning 12% of the total number of bachelor’s degrees conferred, Hispanic Americans accounted for just 7% of candidates that sent Graduate Management Admission Test score reports to U.S. part-time MBA programs in 2017. It’s a similar disconnect for African Americans, who are 13% of the U.S. population and earn 11% of the bachelor’s degrees, but are just 6% of part-time MBA candidates.

And what about women, who are 51% of the U.S. population and earn most of the bachelor’s degrees (57%)? They are just 36% of the part-time MBA candidates.

Hazenbush writes that U.S. part-time MBA programs will need to “more effectively make recruitment inroads into these populations to grow the overall pipeline. Currently, fewer than half of U.S. part-time MBA programs conduct special recruitment or outreach for women (48% of programs) or underrepresented populations (41%) — including African Americans and Hispanic Americans.”

Questions about this article? Email us or leave a comment below.