Are Online MBAs A Good Investment?

a woman explores online mba options on her tablet computer

If you work a full-time job, have a family, or simply don’t have the time to physically attend a university, but still have the aspiration to land a career that requires an MBA (Masters of Business Administration) then pursuing an online MBA probably sounds pretty appealing. But deciding whether this type of learning would be a good fit for you, or perhaps more importantly, if this sort of degree will be worth your time (and money), can be difficult to determine on your own.

Pros and Cons of Online MBAs

There are many advantages to receiving an online MBA, which is why it is the #1 most popular online graduate degree. If your schedule doesn’t permit you to attend classes at a university, either because you work full-time, have family obligations, or live far away from a campus, then being able to do your school work from the comfort of your own home whenever your own schedule allows you can be a real perk.

MBA degrees through online programs tend to cost significantly less than attending a traditional school, with some schools only charging as little as $5,000. You can also stretch out your degree to up to 7 years at some schools, allowing you to have a lighter workload as well as spreading the cost over a longer period of time.

There are some things to keep in mind when considering this type of graduate degree. You will need to have a strong sense of self-discipline and be a self-starter to make sure you’ll get your work done. Finding the time and place to study might be difficult if you constantly have a lot going on inside your home. Additionally, being isolated from your peers and instructors might be inconvenient at times, especially if you find that you excel through communicating with others and having a working relationship with your professors.

The “MBA Bump.”

The increase in pay expected after receiving your Masters of Business Administration, more aptly named the “MBA bump,” has proven for many to be well worth the time and money required to achieve this goal. According to some studies, 2012 graduates of full-time MBA programs saw an average of 81% increase in their pre-MBA base salaries. Graduates of part-time MBA programs reported increases of about 53%.

So what does that mean for your return of investment? A lot goes into consideration here, such as how much the school’s tuition cost you, and how much the prestige of the school affects the caliber of your job offers. According to, students graduating from programs like Stanford (with tuition topping $120,000) will only recoup less than 30% of their investment during the first year of post-MBA work. However, students graduating from mid-range, more modestly priced schools (about $56,000 for tuition) will earn back about 60% of what they spent for their education within the first year of work.

Are They Worth It?

It is important to know that not all online MBA programs are the same. There are some mass-market schools that are online-only and have virtually no entrance requirements as long as you are able to pay the tuition. These schools will not be as valuable to you in the job market since they are not selective and, therefore, the quality of their student body suffers. Since these schools are concerned primarily with making a profit, they will not spend much of their resources on ensuring that the faculty they employ will provide a worthy education to their students.

On the other hand, there are online MBA programs that are an extension of brick-and-mortar institutions which require the same entrance requirements as residential tracks, including GMAT scores and minimum years of work experience. The drawback to this option is that the cost of these programs is generally not any cheaper than students attending the university full-time.

One criterion you can use when trying to select an online MBA program is making sure they are AACSB (Association to Advance Collegiate Schools of Business) accredited. This means that the school is held to a certain standard of education that mirrors brick-and-mortar institutions. Receiving a graduate degree from an online program like this should be equally as valuable in the job market as physically attending school.

All of this should go into consideration when contemplating getting your MBA, as well as which program might be the best fit for you.

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