If your university or college is considering moving its on-ground MBA into the online environment, but has concerns that the graduate business program market is oversaturated, we have good news. Up until recently, for-profit institutions owned almost all online MBA market share. But since non-profit institutions have entered the online MBA market, students are consistently choosing them over for-profit programs – thus expanding the market. Due to these shifts, research suggests that there is still ample opportunity to offer graduate business programs online thanks to the sizeable market and students’ desire to learn online.
The Impact of Going Online
According to research data from IPEDS (Integrated Postsecondary Education Data System), trends from the last five to ten years show MBA programs heading towards the online environment – and for good reason. Although the overall growth rate for new MBA programs has slowed, data shows higher education institutions that adapt their on-ground MBA programs for online delivery or grow their existing online MBA programs, see bigger increases in student enrollment than schools whose MBAs stay solely on-ground.
The IPEDS data demonstrates that although MBA graduate growth has been nearly stagnant over the last few years (seeing a total growth of 1 percent since 2010), approximately 110,000 MBA degrees were awarded last year alone. There is little doubt that even though MBA growth has slowed, the business administration and management education markets remain expansive.
With the number of MBA programs growing at an average rate of 2 percent per year, competition has increased. However, the research indicates the number of online programs increased 57 percent since 2012 while on-ground programs decreased 13 percent. In fact, institutions that do not take their MBA programs online are losing market share. Since 2012, total graduates at institutions that report only having an on-ground MBA option have declined 24 percent. Conversely, the total number of graduates (ground and online) from institutions that offer online MBAs has grown 8 percent during that same period. This data is a strong indicator that the preferred modality for MBA degrees has shifted to online.
Who is Going Online?
IPEDS research indicates that the presence of both private and public non-profit institutions continues to grow in the online space, while for-profit institutions have decreased their presence. The number of online programs offered through for-profit schools has dropped at least 14 percent since 2012, and The National Center for Education Statistics (NCES) suggests the rate of decline in online programs offered by for-profit institutions is likely even more significant.
Notably, during this time, the number of online programs offered by private institutions increased 66 percent, while public institutions increased by 58 percent.
So what exactly does this mean?
A substantial shift is occurring in the graduate business program market. Private and public non-profit institutions are steadily gaining MBA market share as for-profits continue to lose ground. In fact, in the same time period that for-profit institutions decreased the number of online programs by 14 percent, their MBA market share also fell from 22 percent in 2012 to only 17 percent in 2015.
What this data strongly suggests is that many MBA students primarily enrolled in for-profit schools because the online modality was not offered by non-profits. Now that students have this option, they have the ability to choose, and they are overwhelmingly choosing online non-profit education over for-profits because they perceive the quality of education to be higher.
The message to higher education administrators is clear: there is significant opportunity to offer online graduate business programs, but it is also critical to remember that the quality of the program remains tantamount to its success in what is still a highly competitive market.
Graduate Business Program Market Conclusions
Overall, the trend is good news for non-profit colleges and universities of all sizes because even in a competitive market, there is still ample room for new MBAs to move online and room for growth within existing online MBA programs. This trend is also likely to be seen with the growth of other online degrees that for-profit schools have historically dominated until now. Based on the research data provided by IPEDS, non-profit institutions are poised for significant growth potential in offering online graduate business programs.
Contact us to learn how we can help grow your MBA program online.