Online MBAs Lead to Smaller Pay Raises than Full-Time Programs

December 1, 2011 · Leave a Comment 

Online MBAs from top-tier schools are, in some cases, becoming just as expensive as their full-time counterparts. Both Queen’s University and Duke University Fuqua School of Business’s online EMBA programs cost about 90,000 dollars, and the cost for the University of North Carolina Kenan-Flagler Business School ‘s online MBA is about the same at 89,000 dollars.

However, the high costs of top-tier school online MBAs may not be justified, as the online program graduates are unlikely to have as high a pay raise as those who graduated from the full-time program.

In Fact, Online MBA Graduates’ Raises are a Lot Less

Top-ranked Indiana University’s Kelley School of Business has had an online MBA since 1999. Many are looking to the results of the program now in order to make predictions for the new, high-costing MBA programs. Many are wondering if the online MBA programs will really be worth it.

It turns out they are not as worth it as the full-time programs for its graduates, at least when looking at the statistics. Online MBAs typically get pay-raises of about 18,700 dollars. Their average salaries increase from about 70,400 dollars to 89,100 dollars. Also, the percentage of those who make 120,000 dollars or more jumped from 2 percent to 26 percent after graduating with their online MBA.

However, the graduates from the online program had a salary increase of 37,000 dollars after they finished their MBA, to 89,144. The dollar increase was nearly double that of the online graduates.

Why You Shouldn’t Read Too Much Into the Lower Pay-Raises for the Online MBA Graduates

The problem with statistics is that they can be taken out of context. Admittedly, the salary increases for the full-time students was double that of those who took the online program – however neither did their salaries before the program start quite as high. The kinds of students in the online MBA program had vastly more experience (a little less than 9 years of experience, on average) and were already making more money (2 percent of the online MBA graduates before the program already were making a salary of 120,000 dollars) than the students in the full-time MBA programs. They also were coming into the online MBA from a different perspective. The full-time MBA students were looking for a career change – the online MBA students a career boost.

And it got them to the same place. One average, for both groups, an MBA landed their average salaries at almost the exact same amount. Both MBA graduates’ salaries averaged out at about 89,100 dollars, with a miniscule 44 dollar difference.

So maybe its about right, the cost of the MBA, in general. Be it online or offline – ultimately a top-tier school’s MBA is worth just about 90,000 dollars.

Read about the differences in pay raises for online degrees in Bloomberg Businessweek.

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