CHAMPAIGN — The University of Illinois Gies College of Business plans to phase out its on-campus MBA programs and direct future students to its growing online iMBA and other specialized master’s programs.
Current MBA students, and those admitted to the two-year program starting in August, will be allowed to complete their degrees, but the college will not be taking applications for future classes, officials said Friday.
Dean Jeffrey Brown cited a steep decline in enrollment in on-campus MBA programs nationally and at the UI, in part because students are moving toward online MBAs and more specialized graduate business degrees.
He said the change will affect both the full-time MBA program and the part-time Professional MBA program geared toward working professionals.
"We will honor our commitment to all current students as well as those we have extended offers of admission for the fall," Brown said.
The incoming students will be given an extended period to accept the UI’s offer of admission, he said. The college is also offering them other options, such as switching to the iMBA or other master’s programs.
Brown said the decision — which is still subject to university approval — is the result of an 18-month process that included consultation with college faculty committees and analysis of national data from business education organizations.
"It is very clear that nationwide there is an ongoing trend away from traditional on-campus, two-year master’s in business administration programs," he said.
Students are gravitating to more flexible MBA programs, including online versions like the iMBA, as well as more specialized master of science degrees in a particular discipline, such as accounting, finance, financial engineering or technology management, he said.
"We have a whole suite of those programs," Brown said, "nearly all of which are very highly ranked and highly regarded."
The iMBA, which allows students to earn an MBA completely online at less than half the cost of traditional programs, has also seen rising enrollment. Applications have nearly tripled since its launch in 2016, Brown said. It currently has 2,600 students, and about 3,200 have applied for the cohort that starts in August.
The total cost of the iMBA is less than $22,000. Tuition for Illinois residents in the traditional MBA program is $24,868 a year, or $49,736 for the full two years. With fees, the total cost is $58,692; for out-of-state students it rises to $83,588.
"It was a strategic decision," Brown said. "We just decided to focus our investment on the future, on those growth opportunities, and free up the resources, the faculty time and attention and so forth from the traditional programs to reinvest in these critical ares for the college."
The UI’s on-campus MBA program has seen a steep decline in enrollment over the past quarter-century, from about 600 at its peak in the mid-1990s to about 100 today, or roughly 85 percent, Brown said.
He said 49 students enrolled in the full-time MBA program in fall 2017, graduating this month. Another 49 enrolled in August 2018, and so far 38 students have paid deposits to enroll this coming fall.
National data show that in 2018 alone, 70 percent of all full-time MBA programs experienced a decline in applications, he said.
Enrollment in graduate business education is growing overall, but it’s shifting to those other types of programs, Brown said.
Some specialized degrees that didn’t exist 20 years ago are more valuable now for some types of jobs than a general MBA degree, he said.
"The market has just segmented," he said.
At the same time, international enrollment in U.S. MBA programs is declining as more schools abroad offer that option, Brown said. Some international students are reluctant to apply in the U.S., and employers here are hesitant to sponsor them, because of new visa restrictions, he said.
"Basically what you’ve got is a traditional market that’s in decline," he said. "We’re making the decision to support the growth areas."
Other schools have eliminated their on-campus MBA programs in recent years, including the University of Iowa and Wake Forest.
"The word among business school deans is that there is going to be more consolidation of these programs" over the next five to 10 years, Brown said.
He said MBA programs in major cities, and the top 10 elite programs such as Harvard, Stanford and the University of Chicago, will continue to thrive. But those outside the top echelon will likely consolidate with other schools or shift toward online or alternative programs, Brown said.
Professional MBA programs also tend to do better in larger cities, drawing from the workforce there. The UI’s Professional MBA program, which holds classes in the evenings, enrolled 46 students in 2017 and 64 in 2018 but only 20 so far have registered for the fall.
One factor in the college’s decision, Brown said, was that a significant number of Champaign-Urbana professionals — more than 100 — have opted to enroll in the online iMBA program.
"It’s turning out that our online program is a much better substitute for the PMBA than we first imagined it would be," he said.
Word of the college’s decision leaked out Friday before the official announcement, and concerned students began contacting faculty members and others at the college.
The college sent out a video message to students from Brown explaining the decision around 1 p.m. and planned to reach out to answer their questions.
Brown said he talked with current MBA students and alumni over the past few months about MBA trends and how the UI’s program could be improved or redesigned — though not necessarily about closing it.
He expects there will be "a period of grieving" by some, "but I think they’re smart business people" and will understand the decision.
"There are going to be students and some alumni and frankly even some faculty who feel a sense of loss for a program that has been important to them personally," he said. "I completely and totally respect that."
In the long run, he argued, "this is going to help build the Gies brand" and make their degrees more valuable.
Brown said the college will also be reaching out to all incoming MBA students to discuss their options. One reason the announcement is being made now is to give them time to "make a fully informed decision" while they still have other options.
"We’re doing everything we can to keep them as Illini," he said.