Many things can claim victim status in the wake of the current economy, but local MBA programs aren’t one of them.
Despite significant tuition costs, ranging from $12,000 to $40,000, MBA programs are at worst holding steady in enrollments, and many are actually enjoying surges — not just in applications but in qualified applications.
That said, students are getting choosier and shopping more carefully.
Local colleges already understand they need to offer a degree program that brings the potential for a big return on investment. But a more discerning clientele is also forcing them to think more competitively about the value and services they offer to support their curricula. What’s more, despite high demand, colleges are getting more aggressive with financial incentives to attract the best applicants.
And program administrators are saying the same thing: The bad economy has been good for business.
“We’re an automatic beneficiary of the economic downturn,” says Sanjay Varshney, dean of the Sacramento State College of Business Administration, which has seen almost a 50 percent increase in applications. “People are looking for ways to improve their skills and make themselves more competitive, either in their current job or as they look for a new one.”
Mary Emery Sherman, associate regional dean with National University in Sacramento, agrees. “As some areas of the job market continue to contract, we’re getting lots of people enrolling in programs where there’s going to be a work force need in the future,” she says. “Enrollments have been good, even better than last year. People are looking to enhance and improve their skill sets.”
For working professionals, earning an MBA can be a fast track to the executive washroom, meaning promotions and raises after graduation. It could also mean a leg up in the competitive job market.
“During down economies, the opportunity costs associated with higher education can be lower than in booming economies,” says Marcela Iglesias, Elk Grove campus director for DeVry University’s Keller Graduate School of Management. “This provides the chance to become more competitive when the economy eventually improves, so we’re not surprised to be seeing almost 14 percent growth systemwide in our graduate programs.”
Nicole Woolsey Biggart, outgoing dean of the Graduate School of Management at UC Davis, says applications for the Davis program are also up this year, but the question is whether there will be a job available when students graduate.
“The real issue isn’t attracting students; it’s placing them,” she says. “There used to be multiple jobs waiting for our graduates. That’s not true anymore. We really have to work our business and alumni networks much harder to make sure they’re aware of the graduates coming from our program.”
That’s making job placement assistance one area where schools that offer it can claim a competitive edge. Sacramento State, for example, boasts a track record of being “the most successful at job placement in the region,” because its graduates, in Varshney’s words, hold many of the region’s leadership positions.
“We track our graduates, [and] roughly 85 percent of them stay in the region,” Varshney says. “They’re the ones fueling the economic engine in Sacramento. That gives us a very powerful network.”
Job placement, however, is a relatively low priority for applicants. Many already have full-time jobs, but with employers less likely to cover the costs, these students are looking for value.
By far, the values universities are pushing as the most important involve flexibility, convenience and efficiency.
“If universities don’t offer flexibility, there’s a bigger chance students will drop out, and it’s extremely difficult to get them back,” says Bob Eoff, vice president and director for the Sacramento Valley campuses of Phoenix University. “It used to be students conformed to the school’s schedule. Now, it’s the other way around.”
That flexibility mainly involves providing an education without requiring students to travel to a school campus. Both National University and Golden Gate University have created programs where the instructors travel to a company location and teach classes there.
Even more popular are online options, which allow students to continue their studies at their own pace and on their own schedule. Most of the MBA programs available in the region offer some combination of classroom and online instruction, and as testament to the growing demand for online courses, Golden Gate University had fewer than 40 students enrolled at its Roseville campus last year but more than 300 in online-only classes. This past June, Golden Gate announced it was shutting its Roseville campus and going completely online.
“We run 24/7; we never close,” says Terry Connelly, dean of the Ageno School of Business at Golden Gate University, which has seen a 4 to 6 percent increase in enrollment in recent years. “What we’ve done is fix the academic calendar so it makes sense for working people. I think this is the future of higher education.”
In the category of efficiency, universities are also looking at ways to reinvent the concept of business education.
“We’re an automatic beneficiary of the economic downturn.”Sanjay Varshney, dean, Sacramento State College of Business Administration
“There’s a great deal of reflection going on among business schools about how we should be training business leaders to succeed in a new economic and regulatory environment,” says Steve Currall, incoming dean of the Graduate School of Management at UC Davis. “Issues like corporate governance, environmental sustainability and corporate social responsibility … are starting to come to the forefront of business school curriculum.”
Also emerging among business schools is the idea of specialized or career-focused MBA concentrations. Golden Gate University, for example, offers MBA concentrations in accounting, health services and project management for students who already have full-time jobs in these fields but are looking to acquire specialized management skills.
With demand so high, it seems a contradiction that schools would seek to lower tuition costs or offer some kind of financial relief. Indeed some of the bigger schools are choosing to emphasize the value and quality of their programs. Others view a decision to invest up to two years and several thousand dollars in an MBA as an emotional decision, as well as an economic one.
“People are weighing a decision to spend several thousand dollars that they weren’t spending last year against a backdrop of salary cuts, declining home equity and higher prices,” says Toby Oxholm, dean of the Center for Graduate Studies at Drexel University. “It’s a good career move, but emotionally it’s a hard time to lift your head up out of where you’ve been ducking and envision where you’re going to be in two years.”
All the local business schools offer some form of financial assistance to help students apply for federal grants and loans that will help offset tuition costs. Some have also taken the additional step to launch some unique programs specifically geared toward overcoming today’s economic concerns.
Golden Gate University, for example, has established a grant program for students who find themselves unemployed. The program provides a $1,500, one-time grant for students who are enrolled in a degree program and can document they’ve been unemployed for at least 30 days. These grants are available in addition to $1,000 to $3,000 scholarships Golden Gate makes available specifically for graduate students.
As another example, DeVry University’s Keller School of Management has begun awarding Employment Gap scholarships to displaced workers. Two scholarships, valued at $1,000 each, are available at each DeVry campus per semester; both graduate and undergraduate students are eligible. Keller has also partnered with Becker Professional Review, a global leader in professional education for accounting and finance, to offer 35 CPA and MBA scholarships. The $3,500 scholarships are available to new students entering either an MBA or Master of Accounting and Financial Management program. For DeVry administrators, it’s not just about making education affordable, but accessible.
“We understand that higher education goals sometimes fall just slightly out of reach for some, even more so during tough economic times,” Iglesias says. “Our stimulus-type scholarships provide that little extra financial assistance to help someone achieve his or her lifelong career and educational goals.”
Drexel University offers a host of programs to help with tuition. The first, the Sacramento Leadership Fellowship, covers 15 to 40 percent of a year’s tuition based on the student’s academic record. That support can be further augmented by one of the new Constantine Papadakis scholarships available to anyone employed 20 or more hours per week in a nonprofit or government agency. The idea is to give back something to these students who, in their daily work, are devoting themselves to public service and to work that enriches the quality of life in the region.
Drexel also offers a special program for employees who have been laid off by cutting tuition up to 50 percent as long as they’re unemployed. The best deal, however, goes to veterans. Any veteran who’s served at least 36 months since Sept. 11 can enroll in any degree program with 100 percent of the tuition waived.
“We have a lot of military folks who are coming back to the region, and we want to help ensure they transition easily into career and economic sectors that are going to fuel this region’s growth for the next decade,” Oxholm says. “We want them to know we appreciate their service and that we’ve got their back.”
With Sacramento yet to land a Fortune 500 company, the unpleasant reality is that many MBA graduates are grabbing their degrees and heading for larger markets, such as San Francisco and Silicon Valley. “We’re only successful if the region succeeds,” Oxholm says. “We need the opportunities that are going to keep the brains and the talent here, so we aren’t facing a shortage of qualified workers when the recovery comes.”
Varshney agrees, adding that the burden is really on the leadership of the region as a whole. “We need to look at how we can make this region more attractive as a place to live and work,” he says.
That may seem odd for a region that is already so desirable, but the state’s dysfunctional Legislature, financial troubles and business climate — recognized as one of the least friendly in the U.S. by some accounts — would suggest the region’s only major drawback is that it’s located in California.
That, unfortunately, appears to be an insurmountable challenge.
Seventy percent of colleges now say online education drives their long-term growth strategies. And, where for-profit universities once dominated online MBA programs, now highly rated business schools like Kelley and the University of North Carolina’s Kenan-Flagler Business School offer them.
When Laurie Grimsman graduated in June from the Graduate School of Management at UC Davis, she was 51 and a self-proclaimed “age outlier.”