Online MBA Forum

Some people in my department are considering studying an online MBA, so we had a meeting yesterday to consider the various kinds of study that online MBAs can ask you to do. Many programs involve a fairly high percentage of the assessment (and some of the work) to be done as group work. This involves co-operation online, including messaging, conferencing and emailing between the groups, and even using telephone conferencing. In some programs the amount of group assessment can be as high as 30%

Other programs do not require this level of consultation, simply requiring groups to divide up work and then present it jointly, allowing the consultation to be done over a period of time. You have to decide how you want to study, and how you are going to schedule this kind of work into your own work timetable in order to make the decisions necessary to select the MBA program that is best for you.

The net present value of an online MBA today is over half a million dollars. You can calculate this by taking the cost of studying your MBA - fees plus loss of earnings and other expenses, and subtracting it from the extra earnings you will make by having an MBA.

No wonder there are more than 100,000 students studying an MBA, or seeking a place on an MBA program. It's like being given a tax free gift of half a million dollars!

If you decided to study for an MBA in 2001 and invested the average sum required - some $162,000 you could expect a total increase in salary over your career of some $1.4 million (in 2001 dollar value). this is a 17.6 rate of return on your investment.

This level of ROI is remarkable, some three times higher return than Treasury Bills over the same period, and 4% better than the Dow Jones Industrial Average. And this is for the average, straight forward MBA. If you studied an online MBA, your initial investment would be much less as you wouldn't have forgone so much income, so your rate of return would be even higher.

Studying for an MBA means that you have to make a serious investment in your future. You not only have to pay fees, there are also considerable losses in earnings and other costs - some $162,000 in 2001, according to The Anuual Survey of Colleges. It takes around 8.7 years to pay off this debt at current rates of income for the MBA graduate.

However, because the value of an MBA is increasingly recognised in higher salaries, this payback time has reduced since the beginning of the 1990s. In 1991, the average investment in an MBA was $124,000, and took 9.8 years to pay back.

Studying for an online MBA reduces the investment significantly - there is far less loss of income during the study period. So your payback time is reduced by more than 50%, giving you a real head start in the value of your MBA.