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How to choose an online MBA

By Vicky Phillips / November 2007

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Once a rarity, online degrees are now close to mainstream. In 1989, when I first began tracking online degrees, only three accredited colleges offered MBAs (Master's of Business Administration). Today, more than 130 colleges offer the degree, which has become the most popular online graduate school option.

But all distance MBAs are not equal. My company's recent survey of 130 programs revealed online learners should be prepared to pay as little as $5,598 or as much as $115,700 for a regionally-accredited MBA.

With so many options now available for an online MBA, at such a wide price point, anyone considering an e-degree would do well to take the time to learn how to shop for an online university. Price, the most visible variable, is accompanied by differences in accreditation status, admission requirements, and the demographics of incoming students.

AACSB-Accredited MBAs

The various types of accreditation affect a number of key factors, including the cost of the degree, how competitive you will find the program upon admission, and the acceptance level of the degree among employers nationwide. Most e-learners will need, at minimum, a degree from a regionally accredited university.

Among the 130 regionally-accredited MBAs in our site's recent survey, the average cost stands at $14,486 while programs that are accredited both regionally and by the Association to Advance Collegiate Schools of Business (AACSB) command a much higher mean price of $27,644.

Why pay twice the sum for an AACSB-accredited option? The price premium may or may not be worth the cost. Programs accredited by the AACSB enjoy a higher prestige rating among corporate recruiters and academicians. If your career has you competing in top urban environments, areas such as New York City or Boston, for example, the AACSB mark will instantly improve your recruiting status among headhunters.

Similarly, if you plan to compete at a Big Ten corporation or in a highly competitive business arena such as Wall Street, expect extra points if you present an AACSB pedigree. If you intend to work in a university environment, investing in an AACSB program will also result in a higher employee desirability rating as well as higher base pay.

However, for many people, especially those who work in rural environments or those seeking an MBA primarily to open doors at smaller companies, attending an AACSB-accredited program may not pay any premium. In these cases, employers are more likely to be impressed by a university brand name they recognize, such as the local state college or university, then they are by the AACSB mark. In fact, many outside academia and competitive corporate hiring sectors have never heard of the AACSB.

Differences can be expected also among student bodies in an AACSB-accredited program versus one that holds only regional accreditation. AACSB programs typically require a standardized exam, the GMAT (Graduate Management Admission Test), for entry, and a higher than average score on that exam. If you don't test well or you've been out of school for a decade or more-the GMAT requires knowledge of math at a calculus level-you might do well to avoid programs that use the GMAT or similar standardized exams. Not all regionally accredited programs require the GMAT. Private colleges are more likely to forgo this exam than publicly supported universities.

Even among AACSB-accredited programs price varies widely. Many of the top-ranked AACSB-accredited online MBA programs originate from southern universities where costs tend to be lower. In fact, the South is poised to become a dominant niche provider of online education to the national market as growing numbers of mature learners (average age 36) clamor for a more accessible and affordable higher education system.

Leading the pack is the state of Texas, with four options: Texas A&M Commerce, the University of Texas system, the University of Houston Victoria, and the University of North Texas. Florida ranks second with three options: Florida Atlantic, Florida Gulf Coast, and Florida State University.

Regionally-Accredited MBAs

You don't have to attend an Ivy League school to reap the advantages of brand recognition. In fact, most employers favor "backyard brands," colleges whose names are known to them because they operate residential campuses within their immediate geographic region.

Mississippi residents for example will get a big boost from earning a Mississippi State University MBA whether they earn it online or on campus. If you are seeking the extra employment edge that a name brand school will bring to your resume take, it's time to check out colleges that are physically headquartered within 200 miles of your commute circle and offer versions of their traditional MBA online.

Our national surveys show that you can attend a "local" name-brand MBA program online anywhere in the U.S. Western residents can rely on solid brands such as California State University (California) while Midwesterners can turn to schools such as Upper Iowa University (Iowa), Bellevue University (Nebraska), Baker College (Michigan), and Fort Hays State (Kansas). Those in the Northeast may favor Saint Joseph's College (Maine) and Marist College (New York). The South enjoys a bevy of low-cost, quality providers such as Troy University (Alabama) and Tarleton State University (Texas).

For-Profit MBA Schools

While for-profit players such as the Apollo Group (University of Phoenix) continue to expand, the cost of attending for-profit colleges greatly exceeds the national average. Aggressive marketing and easy open admission—most for-profits do not require feared standardized admission tests such as the GMAT—keep for-profits expanding. But our surveys have found that the for-profit MBA programs are rarely the best buys for cash-strapped consumers.

The University of Phoenix Online, for example, charges an average of $27,048 for their online MBA compared to non-residency best buys such as California State University ($10,500), Baker College ($14,250), Bellevue University ($11,700), the University of Wisconsin Whitewater ($19,800), and the University of Nebraska Lincoln ($14,212).

Check Out the Student Body

Ask any potential MBA program about student demographics. This is important if you are trying to gauge how well you'll mesh with your potential new study mates. Ask for a demographic breakdown of recent admission cohorts and the type of educational and professional background held by your potential classmates.

Distance MBA programs tend to attract older more worldly students (the average age range is 36-44 with a decade or more of managerial experience). Students in this older age range tend to have little interest in theory and more of a thirst for real-world applications.

If you're 40 years old and have managed your own business for a decade, you may not be on the same wavelength as a 23-year-old who's yet to hold a managerial position. Getting assigned to complete business case studies with someone who holds a background out of skew with your own can impede your ability to complete an online MBA program, almost all of which use case studies completed by cohort teams to mimic a real-world, business-problem-solving approach.

Ask also about graduation rates for online degree seekers. Make sure you specify you want the graduation rate for the percentage of students who have completed the entire degree, not just a single course. (We specify this because recently we've noticed that some for-profit MBA schools are publishing completion rates that refer only to the percentage of students that complete their first online course, which is always more favorable than that for an entire degree. Don't be mislead.)

Be cautious of programs that either do not have this data or give degree-completion rates lower than 70 percent. A high rate of dropouts often signals problems in program curriculum, faculty attentiveness, or admission screening standards.

Watch Out for Online Scams

Because an MBA degree carries such a premium in the workplace-studies report that MBA holders can expect to earn $20,000 or more per year than their non-MBA peers—a booming market has evolved for fake online MBAs. The average price of a fake online MBA is about $2,600, making it tempting for anyone seeking to earn this big-bucks credential the quick and easy way.

My site now tracks more than 150 fake online colleges that will award a quickie MBA to anyone with the cash. Many of these fake college websites look better than the sites operated by top-ranked universities. And if you think checking for accreditation will protect you, think again. Virtually every online degree mill is "fully accredited." Problem is they are accredited by fake agencies, agencies operated by the very same people who run the degree mills.

The Internet is a dangerous place to shop for an online MBA. Almost every "directory of online degrees" in operation today is owned and operated by advertising companies that erect fronts solely for the purpose of buying and selling student leads. They list any college that has the cash to pay for leads. Degree mills love these sites because no one screens them for accreditation or academic standing. websites and search engines cannot be trusted for unbiased educational advice.


  • Thu, 13 Sep 2012
    Post by Tom Richard

    online degrees are really helpful to make the most of your talent and caliber and hence today a huge number of people are opting for these degrees. done in a short time and in the most affordable way from your home comfort, these study programs are hugely liked by teens and busy working professionals. well, choosing an online MBA program from the right place is never a very easy thing and this article can help you to know several crucial aspects of it. AACSB programs discussions are very good.