Innovation challenging traditional higher ed structures for MBAs

The latest Bloomberg Businessweek documents interesting changes in the traditional approach to higher education in business.

When Indiana University’s Kelley School of Business launched an online MBA program in 1999, few traditional universities had embraced distance learning. Online degrees were more typically offered by for-profit outfits such as the University of Phoenix (APOL), whose television ads featured tired working stiffs eager to escape their income bracket, not the future titans of industry top MBA programs look for.

Fifteen years later, 1,072 students are enrolled in Kelley’s online MBA program, more than double the number in the school’s regular two-year program. Tuition for Kelley Direct works out to $61,200 for two years, compared with $93,000 for the on-campus program. The University of North Carolina at Chapel Hill’s Kenan-Flagler Business School has 551 students in its online program, more than in its full-time MBA program. UNC’s online degree costs $96,775, vs. $111,092 for its regular program.

The popularity of online degree programs at Kelley and Kenan-Flagler—the only schools offering online MBAs in the top 20 of Bloomberg Businessweek’s biannual ranking of full-time MBA programs—is evidence of a shift in attitudes. The day may not be far off when, freed from the bonds of geography, elite B-schools use digital streaming and online video to attract the brightest students from around the world. While top-ranked institutions are probably immune to the competitive challenge this change could bring, that’s not true of the larger universe of 420 U.S. MBA programs accredited by the Association to Advance Collegiate Schools of Business. “Half of the business schools in this country could be out of business in 10 years—or 5,” says Richard Lyons, dean of the University of California at Berkeley’s Haas School of Business.

Perhaps this type of change can help address problems created by the college bubble.

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