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EdTech: Growth In Online MBA Applications Outstrips Traditional Degree Formats

Spurt in demand for online learning outdistances part-time and executive formats, says GMAC

Tue Sep 22 2015

A growing number of online and flexible MBA programs have reported year-on-year growth in applications, more than traditional part-time and executive courses — highlighting the swelling appeal of digital degrees among business students.

The surge in application volume for business schools’ online MBA programs is reported in the annual Application Trends Survey by the Graduate Management Admissions Council (GMAC), owners of the GMAT entry test.

GMAC said the trend for students to opt for digital MBAs is related to survey findings that indicate a shift in employer tuition assistance. This year, both part-time and executive MBA programs expect fewer students to have financial backing from their bosses.

Comparatively online programs expect that a growing share of students will receive funding, indicating that business is taking to digital talent management.

Phil Powell, chairperson of the Kelley Direct online MBA program, said students and corporations expect the school to stay ahead of digital innovation.

“An online program provides flexibility for employees and allows them to learn and apply what they have learned immediately in the workplace and balance family and other life needs,” he said.  

Meanwhile, the majority of full-time MBA programs — in both two-year and one-year formats — report increases in application volume compared with last year and even a decade ago.

Among full-time two-year MBA programs, 57% report increased application volume this year. For full-time one-year programs, 51% report increases in applications, compared with just 37% last year.

Both program formats are performing better compared with 10 years ago: 60% of full-time two-year, and 53% of full-time one-year, MBA programs said they received more applications than in 2005.

This is particularly positive news for the US MBA market, around which fears have swirled that demand for the MBA degree was declining.

Nearly 60% of US MBA programs report year-on-year domestic application growth — a level of demand not seen since 2009. Domestic candidates however still account for less than half of the applicant pool for US MBA programs.

Shari Hubert, director of MBA admissions at Georgetown’s McDonough School of Business, said that establishing and maintaining a strong brand is paramount to securing applicants.

“It’s all about the brand recognition and brand value proposition — especially for international students; they want to be certain that they have made the right decision in choosing to study abroad,” she said.

This year’s GMAC survey also reveals that the representation of women applicants has increased by 3% to 8% over the last five years for all nearly all types of business school programs.

Schools have reported growing numbers of women in their MBA programs this year, thanks to initiatives targeting female applicants, including at Harvard Business School and MIT Sloan.

“Raising awareness around gender dynamics has led to changed behaviours, in particular our students’ willingness and courage to have difficult, uncomfortable conversations,” said Stephanie Fujii, assistant dean for the MBA at California’s Haas School of Business.

Europe’s full-time one-year MBA programs rebounded in 2015 after two years of stagnant volume. Around 67% said applications had grown this year, compared with 38% reporting application growth for the last two consecutive years.

GMAC said this uptick is attributed to increased demand from international applicants; 63% of European programs report increases in international candidates compared with last year.

Virginie Fougea, associate director for admissions at INSEAD, said the global business school has been targeting applicants through social media — including Twitter, YouTube, and LinkedIn — as well as using video content.

“We also organize more and more one-to-one sessions and coffee chats with prospects,” she said.

She added that the school is starting to explore massive open online courses — Moocs — which are widely believed to open up new potential applicants for degree programs.

Asia Pacific is the star performer however, with 90% of full-time two-year MBA programs reporting increases in volume. Yet 60% of full-time one-year MBA programs report decreases in volume, implying a preference for longer courses that are popular across North America.

Demand for master in finance and master in management courses is also on the rise, GMAC said. But 47% of master of accounting courses reported decreases in applications.