(Poets&Quants) — It’s no secret that an MBA is one of the most expensive gifts you could ever give yourself. Once you add in the lost income from quitting your job, the interest payments on student loans, and the ever-rising tuition and fees, the total cost of the degree can approach $350,000.
So at a time when applications to most two-year MBA programs are down, it’s probably not all that surprising that there’s renewed and growing interest in one-year programs. As Kate Smith, admissions director for Northwestern’s Kellogg School of Management, puts it, “The value proposition of the one year is great so there is high demand for it.”
While overall MBA applications to Kellogg were down 7% last year, one-year applicants bucked the trend. They rose by 6% last year and are up 24% since 2009. This year, Kellogg has enrolled a record 100 students, up from 86 last year. Smith says the school plans to expand the class by 20% to 30% next year, bringing enrollment to as high as 130 students.
As the highest ranked U.S. school with a one-year MBA program, Kellogg believes it has an unusual opportunity to achieve significant MBA growth. Within three years, the school hopes to double the size of its one-year program to some 200 students.
Besides Kellogg, there are only two other top 20 U.S. schools with one-year options: Cornell University’s Johnson School of Business, which requires candidates to already have an advanced degree, and Emory University’s Goizueta School, which, like Kellogg, requires applicants to have an undergraduate business degree or a quant background.
And those schools are also reporting increased interest in the one-year alternative. At Emory’s Goizueta School, applications this year are up 39% and the school has enrolled 48 one-year students, up from 39 a year earlier. At Cornell University’s Johnson School, applications for its one-year MBA rose 15% last year while class size jumped 30% to 59 students. Johnson hopes to enroll 60 to 70 students in next year’s class. Fueling demand for Cornell’s 12-month option is the opportunity for students to do a dual-degree. “It’s a unique opportunity for a dual degree, like an MD/MBA, or Masters in Real Estate/MBA,” says Randy Allen, associate dean at Cornell. “Students can shave time off as well as cost in getting that [second] degree.”
Viraj Mehta completed Johnson’s accelerated MBA this year, between his third and fourth years at Case Western Reserve University’s School of Medicine, where he’s studying to be an eye surgeon.
“It’s a great way to round out my skill set and give me a better idea of how the business of medicine actually works,” he says. “Eventually it will help put me in a position where I can make large-scale changes for the healthcare system.”
The benefits of one-year programs are obvious: Getting the same degree in half the time brings considerable savings in tuition and fees, room and board, and the lost opportunity cost of not having a job for two years. And despite the shortened academic experience, MBA employers tend to award one-year grads the same starting salaries they pay MBAs of two-year programs.
In fact, several schools report that their one-year MBAs make slightly more than graduates of their traditional programs, largely the result of differences in work experience. At Kellogg, for example, one-year students are, on average, five months older with six months more work experience. So graduates tend to see a faster return-on-investment than traditional MBAs.
“People doing the two-year program are looking to have a college experience,” says Shena Simmons, who completed her accelerated MBA at Goizueta in May. “With the one-year, you go in, you want to learn your stuff, and then get out to restart your career.”
No time for summer internships, or friends?
The downside? Career switchers tend to be at a disadvantage because they lose the benefit of a summer internship — which has increasingly become a prerequisite to a job offer. In careers such as consulting and investment banking, companies largely recruit students from internship programs, so there’s limited hiring of one-year students into those industries, says Randy Allen, associate dean for international and corporate relations at Cornell’s Johnson School.
One-year students also lose out on the intense bonding experience of a two-year program, many of which require cohorts of students to go through the first year core classes together. That’s why some of the nation’s most prestigious MBA players, such as Harvard, Stanford, Wharton, Dartmouth, and Chicago, have not entered the market. Deans at those schools believe that the ideal MBA program is a two-year, all-encompassing experience with an internship, a global immersion trip, and a full menu of electives that allow time for specialization.
Still, other prominent schools with accelerated MBA programs include Babson, the University of Southern California’s Marshall School, and the University of Pittsburgh’s Katz School of Business. And one-year MBAs have long been common in Europe, with INSEAD, IMD, IE Business School, and Copenhagen Business School offering such programs.
They are also gaining in popularity in other parts of the world. In Australia, for example, the Melbourne Business School recently replaced its 16-month program with a 12-month version after observing that Australian students favored part-time over full-time study. The number of Australian applicants has roughly tripled since Melbourne shortened its program, according to Deputy Dean Jennifer George.
At Melbourne, the accelerated students have to digest the MBA curriculum much like students in any other one-year program. More radical is the school’s overhaul of students’ daily schedules. Borrowing from the modern workplace, Melbourne’s new program rejects the traditional university model of a few lectures amid vast tracts of unallocated time and instead assigns students to an 8:30 a.m. to 5:30 p.m. “workday” in collaborative teams and with professors on the school’s premises every weekday. So much for outdated notions that graduate study is a time for reflection. Most other one-year programs aren’t nearly as regimented.
Integrating with the traditional track
Given the importance that MBA students attach to alumni networks, it’s reassuring for one-year students to know that once they complete the core requirements, they will be integrated into classes with two-year students.
Goizueta emphasizes that come fall, one-year students, after an intensive summer of core courses, join second-year students in the two-year program, becoming one class that graduates together. The only differences are the lack of an internship and 10 required electives versus 14 for two-year students, says Corey Dortch, associate director of Goizueta’s MBA program.
Brandon Beeken, a 2011 Goizueta graduate, says you don’t sacrifice those alumni connections by getting your degree in half the time. He says that most of his leads doing enterprise sales for WayIn, a startup tech firm, come from Emory alumni, especially for companies in the Atlanta area. “I’ve also gotten connections through former professors at the business school,” says Beeken. “It makes the conversation easier, better than doing cold calls.”
In lieu of internships, accelerated programs often require students to take a course that assigns them to work in teams on live projects for companies. Johnson’s management practicum gets projects from technology companies, such as Microsoft MSFT, to pharmaceutical and medical device makers, such as Novartis NVS, as well as financial services and manufacturing firms. Goizueta’s management practice course has worked exclusively with Popeye’s Corp. for the past two years, while a more advanced elective brings in six to eight companies each spring.
Steve Clareen, who graduated from Johnson in 2008, enjoyed his experience on an international compliance project for specific drugs at Novartis so much that, as a business unit manager in Synthes’ Trauma division, he has sponsored two projects for Johnson students. “We were actively recruiting those students who worked on the project. That was less my decision than that of my superiors,” he says.
Goizueta MBA candidates can also get targeted business experience by doing a directed studies course, where students look for a faculty member with research interests that match their own and create a project proposal that must get approved by the faculty member. One-third of Goizueta’s one-year MBA students took advantage of this program last year, says Dortch.