Lots of MBA programs promise to prepare the next generation of entrepreneurs and business elites—for about $40,000 in annual tuition. Shai Reshef says he can do the same for a lot less.
After selling his education company to Kaplan, Inc., the New York-based entrepreneur in 2009 plowed the proceeds into offering tuition-free college degrees. Since then, his Pasadena-based University of the People has enrolled 3,500 students from across the world in bachelor degrees in business administration and computer science, taught online in small, intensive classes.
Now Reshef has gone a step further, with what he claims is the world’s first almost-free MBA, beginning in September. To sit all 12 exams, students will pay just $2,400—a tiny, tiny fraction of what students pay at physical schools. And there are scholarships for those who cannot afford that, with HP (hpe) and Microsoft (msft) among the donors.
Courtesy of University of the People
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While companies often regard online degrees skeptically, Reshef insists UoPeople, accredited by the Distance Education Accrediting Commission in Washington, is little different in quality from bricks-and-mortar competitors, which anyway post some of their course literature online. And, he says, it attracts students who otherwise struggle to launch professional careers—a hot issue in the US presidential race, where crippling student debt is fueling voter anger. “When you educate one person you can change one life,” Reshef says. “When you educate a lot of people, you can change the world.”
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Many academics are convinced. “Here is an opportunity to have an impact on people and their local economies that I would not normally get teaching top MBAs,” says Russell Winer, marketing professor at NYU’s Stern School of Business, who heads UoPeople’s business education. “There is excess demand for this kind of program.”
Indeed, UoPeople’s MBA has attracted 4,400 applicants for about 1,500 spots during the first year, about 20 percent of them Americans and one-quarter from Africa—many eyeing better-paid jobs. “I want a managerial position,” says Debbie Time, a health-insurance analyst in Orlando, Fla. “With a Bachelor’s I cannot get there.”
Such limitations are unnecessary, Reshef says. “Our model shows higher education can be sustainable, inexpensive and still high quality,” he says. “Others can do the same.”
A version of this article appears in the June 1, 2016 issue of Fortune with the headline “Making a Really (Really) Cheap MBA.”