Online MBA versus traditional MBA: Here are the major differences

BY Hadley HitsonApril 24, 2021, 10:25 AM
Martin Laksman

An MBA degree has been a staple of careers like financial management, marketing, health care administration, and others for decades. What’s changed during that time is how business schools across the country are offering their classes. Now, whether studying at a prestigious private college or an established state university, students can pursue their MBA through online or full-time programs—or some combination of both.

Online education has steadily risen in popularity since as early as 2013. During the 2013–14 school year, about 31% of graduate students took distance education (a.k.a. online) courses, and as of the 2018–19 academic year, the number of students taking online classes increased by nearly 9% to over 1.2 million students, according to the most recent federal data. Throughout the COVID-19 pandemic, that trend has continued, and experts in MBA programs say they are seeing more people finding value in online higher education. 

While online programs allow for more flexibility in students’ schedules, full-time programs offer students more personalized coursework and the opportunity to take full advantage of internships, networking, and other career resources. 

Weighing the opportunity cost of quitting a job and forgoing a salary to enroll in the traditional, in-person MBA program against the option of maintaining employment while completing a 16- to 24-month online program is a difficult decision for some prospective students. Here are the five biggest differences between online and full-time MBA programs that will help you decide.

Online MBA programs: Tailored to experienced working professionals

The average work experience of applicants to top online MBA programs is between six and 10 years, whereas the average falls between three and five years for full-time programs, according to several business school administrators. 

Online MBA courses are designed with the expectation that most students will have a higher baseline of knowledge coming into the program. Also, because of the flexible schedule of the online MBA, many students continue working in the business world while they are completing their courses.

Online students are able to finish coursework at their own pace each quarter or semester, which means they could complete an MBA at the “full-time” pace or extend their timeline to three years or beyond. Meanwhile, full-time students usually adhere to a more typical nine-to-five schedule for classes and complete the degree in about two years. 

Saby Mitra, dean of the University of Florida Warrington College of Business, says the online schedule is best for people who intend to continue working in their same field post-MBA.

“If you want to make faster strides in the career that you have, then an online MBA makes much more sense,” Mitra says. “You don’t have to take off from work. You don’t have the added expense of being in school for two years. You’re still earning your salary. It’s much more convenient.”

Online programs remove common financial and geographic barriers to enrollment that the traditional MBA education maintains. Therefore, online MBAs have also seen a trend in more diverse classes—including higher numbers of women and underrepresented minorities—over the past several years as online programs have become more widely accepted. 

“In general, most online MBAs would tend to see more diversity, and that makes it more attractive for the companies to recruit because they are looking for diversity as well,” Mitra says. “They are more likely to find that diversity in the online MBA pool than in the full-time MBA.”

Full-time MBA programs: Best for people who are switching careers 

As more schools offer the opportunity to pursue an MBA without requiring students to commit to a full-time and in-person education, students are forced to consider whether they actually need to pull out of the workforce to do so.

The people who benefit most from a full-time MBA education are those who want to shift from a different career into business, according to Bradley Staats, associate dean of MBA programs at the University of North Carolina at Chapel Hill

“I’ve worked in marketing. I’ve decided I want to work in finance. But how do I make that pivot? If I’m in a brand management job, that’s really tough to do,” Staats says. “If I go to business school I get the training. I spend my summer internship at a finance job, then I can make that jump.”

John Gresley, assistant dean and director of Warrington MBA programs, says that full-time programs offer students more opportunity to adapt the courses they take to what they need to learn. 

“You get a little bit more course selection, a little bit more opportunity to kind of pick and choose your experience in the full-time space,” Gresley says. “But you are locked into having to do it Monday through Thursday. You’ve got to live in Gainesville. You give up a lot of things for that customization.”

Full-time students trade off schedule and location flexibility for degree customization. Still, Gresley, Staats, and Mitra note that the overall content of online and full-time programs is the same.

Standardized tests are less important for online admissions

Whether you are applying to an online or full-time program, every admissions office wants a holistic view of you as an applicant. This typically involves at least one essay, a résumé, undergraduate transcripts, and two recommendations. 

However, Staats says that standardized test scores for either the GMAT or GRE are less likely to impact the standing of online applicants. In 2019, the UNC Kenan-Flagler Business School’s incoming online class had an average GMAT score of 670, while the full-time class average was a 697.

“Since they typically have a greater wealth of experience, we can view what they’ve done, and they’ve shown that they have this ability without needing to go and take the GMAT,” Staats says. 

Moreover, many schools offer test waivers if applicants meet certain criteria. Typically, waivers may be granted on account of other earned graduate degrees, significant work experience, or more occasionally a high undergraduate GPA. During the COVID-19 pandemic, however, many schools recognized standardized tests as an additional burden on students and were more lenient with waivers, according to Staats. And that’s a trend experts say they expect will continue. 

Starting salaries: Not an apples-to-apples comparison

Because many online MBA students work while completing their degrees, they don’t typically move directly into a new job upon graduation. Instead, online graduates look to increase their salaries through promotions afforded them through their MBA. 

Most full-time MBA graduates, however, are seeking new jobs with distinct starting salaries, which allows potential students to judge the value of a degree from one business school versus another. Nonetheless, the percentage increase in salary is typically greater for full-time program graduates. 

At the University of Florida, for example, the average reported salary increase for full-time program graduates is 128%, with an average starting salary of $128,375. Meanwhile, the average reported salary increase for online program graduates is 41%, with an average starting salary of $126,535, according to alumni-reported data from the Financial Times. 

“You start to see the economics play out that you can keep your job,” Warrington assistant dean Gresley says. “You can still earn roughly the same amount if you put in the time and the effort with the classes and the career search. But you also get those two years of economic benefit of having worked instead of not worked while you went through the program, which offsets that $1,500 pretty easily when you look in the grand scheme of things.”

Online programs don’t require internships 

Many full-time MBA programs, including those at UNC and Florida, encourage and sometimes require students to participate in summer internships between their first and second year. While online students may seek out internships, Mitra says most of these programs don’t emphasize the experience as much. 

“You likely have an existing career in what you want,” he says. “Therefore, you don’t need that internship to make your entry into those new areas.” 

Still, resources like career service centers are available to online students in the same capacity as full-time students. 

Additionally, though online students don’t have the same experience as full-time students when it comes to networking among classmates, some schools implement occasional, required events in person. For example, at UNC, Staats notes, the online program includes quarterly immersions where students are expected to meet in person for three-day weekends “that involve networking coaching, as well as academic content and career development opportunities.”

While these events have not occurred during the pandemic, Staats says he expects them to continue afterward.