Do Online MBAs Make the Grade?


By Jeffrey Gangemi Dale Bolger, the vice-president of information services for Oki Data Americas and a 2003 MBA graduate of the University of Phoenix online program, has worked in international business for almost 20 years. Maintaining a hectic travel schedule but wishing to advance his career with an MBA, Bolger saw an online program as his only option. "I could be in a hotel in Tokyo or on the road in Brazil or Europe -- and still learn and be attached to the school," says Bolger.

For prospective students like Bolger, whose circumstances make it tough to attend on-campus courses, getting a degree online can be the only option. And programs offering that choice are growing at a blistering pace, with thousands of online MBA's being granted annually through the distance-learning divisions of traditional bricks-and-mortar B-schools and newer virtual colleges whose ivied halls exist only in cyberspace.

"RIPE" FOR FRAUD. Many of the online MBA programs are well-regarded and offer a way for busy people, such as Bolger, to get advanced education without having to sidetrack a career for a year or two. But, as in many growing fields, cautions abound. Concerns about "diploma mills," or substandard institutions without proper accreditation that offer degrees with little or no serious work, are growing.

"There are now more fake online MBA programs in the U.S. than real ones," says Vicky Phillips, founder and CEO of GetEducated.com, a Web site that evaluates accredited online degree programs and educates consumers about them. "It's an area that's ripe for consumer fraud."

Diploma mills range from those practising outright deceit -- like St. Regis University, which falsely asserted Liberian government approval and was closed by court order in June, 2005 -- to organizations that require only a modicum of work for a degree, says Alan Contreras, administrator of the Oregon Office of Degree Authorization, a state organization that approves individual degree programs. "In the case of diploma mills, I call the schools 'suppliers' and the degree-holders 'users' because the educational component is often minimal," notes Contreras.

CORPORATE SKEPTICS. Even with the best programs, online students lack the means to build their professional network or even interact in person with classmates. But the schools say that isn't a problem.

"There's a really strong, off-the-radar network building up on its own," says Michael Goess, chairman of the Division of Business for Graduate Programs at Regis University in Denver. (Regis University is not connected with the shuttered St. Regis school.) Goess points out that students often arrange to meet on their own time, as well as trade e-mails and network electronically.

For those who expect the same respect from corporate recruiters, think again. "The only way we'd hire [an MBA with an online degree] is if their résumé is strong and they can explain why they had to get their MBA online," says Gloria Odogbili, assistant MBA recruiter for UBS Investment Bank in New York.

GROWING POPULARITY. The online schools, on the other hand, insist that they offer a quality alternative, despite some questionable actors in the space. "On the downside, people lump all of what goes on in the online learning environment together, " says University of Phoenix CEO Brian Mueller. "But on the upside, people who take the time to research their options will see that there are a group of schools, including the University of Phoenix, that have produced a methodology that helps students produce quality work."

Mueller adds, "Our students will tell you that, when they compare our online courses to our classroom courses, the online courses require more time and are more rigorous than the classroom courses."

The MBA world's misgivings haven't prevented online programs from expanding rapidly. With yearly enrollment numbering about 16,000, the University of Phoenix online MBA program -- the for-profit online school is a subsidiary of the Apollo Group (APOL) -- reports year-to-year growth in excess of 50% since its inception in 1989 (see BW, 1/31/05, "Back to Earth for Apollo Group?").

HOW TO JUDGE. Similarly, when Regis University launched its first online MBA program in 1996, enrollment peaked at 14 students. Now about 1,800 students join the program every eight weeks. And in a 2003 survey of more than 500 B-schools accredited by the Association to Advance Collegiate Schools of Business (AACSB) worldwide, 39 reported having virtual programs -- and more are being created every year.

The criteria for choosing an online program differ from that of the more traditional full-time one. Here are some guidelines for selecting the cybercourse that's right for you:

Accreditation

The experts agree that the mandatory first step in choosing a program is to find out if it's accredited -- and by which organization. If it's not accredited by the AACSB, the oldest and most well-known accrediting organization, then you should look for regional accreditation. This means that the organization examining the program is approved by the U.S. government. "Unless the school is [accredited by] a federally recognized accrediting organization, it means zilch," says Contreras.

But to get that coveted AACSB nod requires a relatively high level of interaction between students and faculty. "The AACSB committee thinks higher of programs where students and faculty interact concurrently," as opposed to at times of their choosing, mostly because it's more directly comparable to the classroom, says Rich Sorensen, the dean of Virginia Polytechnic Institute and State University Pamplin College of Business and chairman of AACSB's board.

With so many online MBA programs popping up, Phillips estimates that nearly a million people fall for fake programs every year. "All diploma mills advertise as being accredited, so it's vital to know if the accrediting organization is legitimate," says Phillips.

Interaction

It's the high level of interaction between students and faculty that separates a solid program from a poser. At the Indiana University Kelley Direct program in Bloomington, Ind., the faculty members all teach in both the full-time and online MBA program.

"Knowing that all the professors teaching in the program are tenure-track professors really set my mind at ease," says Tom Croston, a 41-year-old student of Kelley Direct. If professors offer a synchronous discussion period for online students, they're required to schedule more than one to accommodate those needing to log on in different parts of the world. "Not only were my professors available for discussion online, but I could also call them on the phone to discuss coursework," says Bolger.

Either way, it's important to assess whether the structure jibes with your learning style. The best online programs are the ones that offer brief in-classroom periods, says George Lorenzo, author of The Complete Idiot's Guide to Getting Your MBA Online (Alpha Books, 2005). If a program requires travel to a school's physical campus, you must note that and plan for the extra expense. Some programs require as many as three weekends per year and others just one.

Resources and support

Be sure that the program has sufficient resources and support services, such as career placement, that are available even if you can't make it to campus. At Kelley Direct, widely respected for its connection to a top-tier MBA course, the career-services department provides more than just placement. "[Through the department], our students and alums can improve their interviewing skills, gain insight into market trends, prepare for internal promotions, learn how to mentor, and many other skills," says Joelle Andrew-Mohr, Kelley Direct's program director.

It's especially important to have a large online library to conduct research for papers. The best programs will go beyond that and even have an online service to help students with their writing, says the University of Phoenix' Mueller.

To find out if such resources exist, go beyond the school Web site -- and the salespeople hired to paint a pretty picture of the program. "Ask tough questions because you're going to be investing a lot of money in this," says Lorenzo. Call institutions to ask about the faculty's credentials, as well as the students. The qualities of both sets of people will help determine how much you're getting for your money.

Cost

Just how much money you'll pay for an online program can vary broadly -- from $5,000 to $10,000 for a nonaccredited program, to about $25,000 for a degree from Regis University, to roughly $45,000 for a Kelley MBA. Phillips, of GetEducated.com, says many of the best deals are found at state universities, many of which now offer in-state tuition to out-of-state online students. "Students don't often find the state programs because they don't have the advertising budget that for-profit institutions have," explains Phillips.

Whether you choose to go for that top-tier program or your neighborhood institution, seek the right fit. Lorenzo says online programs actually teach a set of skills unique to the technologically advanced world in which we live. "It teaches you to work in virtual teams -- to learn the communication skills that are valuable in the real world -- which is more and more the virtual world."

But some things don't change -- online students at good programs still have to do their homework or their virtual professor will give them a very real F. Gangemi is a reporter for BusinessWeek Online in New York


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