Why Pay If You Can Get An MBA For Free?

The University of Illinois’ College of Business at Urbana-Champaign did the unthinkable this week. It agreed to put the entire MBA curriculum of a new and innovative program online for free.

Yes, the school says the actual degree would cost about $20,000, which is about a third or less of the cost of online MBAs from universities of similar stature (see Breakthrough: A Top 50 MBA For $20,000). But that’s only if you want the piece of parchment paper that no one ever asks for anyway. Otherwise, you can take the complete degree in 18 or more separate courses at no cost whatsoever.

You read that correctly.

That’s quite a revolutionary offering from a Top 50 U.S. business school. As a result, Illinois will become the first school to give away the complete content of an MBA degree for nothing. So the big question is why wouldn’t students just take the program for free, put it on their resume, and say—very justifiably—that they have an MBA education?

It turns out that very issue was the subject of much discussion among the members of a University of Illinois task force that did the spade work that led to the MBA degree on the Coursera platform. As the news industry quickly discovered after giving its content away for free, few readers were willing to pay for it when some organizations put up paywalls.

The similarities between the news media and higher education appear valid. “We studied the news industry carefully, as they have faced many similar issues in the past decade,” concedes Raj Echambadi, associate dean of outreach and engagement at Illinois’ College of Business.

The school concluded, as have many media organizations, that ultimately the cat has already been let out of the bag. “The truth of the matter is that content is available out there,” adds the Illinois official. “Every month, Poets&Quants put together a list of best MOOC courses available for learners to take. Also, it is possible that employers may look at newer ways of whether a potential employee has certain skills rather than using a university-issued credential. Could third-party certifications become more valuable in certain scenarios? We thought about these issues carefully. We took a nuanced approach.”

That approach may well be too “nuanced” to protect the school’s investment in content, but the school smartly made sure there is a difference in getting the entire MBA curriculum for free or paying for it. Those who pay not only get the actual degree, including the right to say they were admitted to the University of Illinois through a selection process. They also gain access to a higher engagement platform that promises a deeper level of contact between and among students and faculty.

Still, one of the biggest challenges in cobbling together the equivalent of an MBA from available MOOC courses at such elite business schools as Wharton, Stanford, the University of Virginia and others is that those one-off courses fail to build on each other. They can’t really be taken in a thoughtful sequence that leads to the educational journey a student would get on campus. The Illinois offering, in its “stackable” building blocks of knowledge, solves that problem for free learners very nicely.

Students can take any of eight specializations–each a three-or-four course integrated offering–in such core MBA areas as strategic management, improving business finances and operations, leadership and management, entrepreneurship and innovation, business tools for successful execution, business environments and corporate responsibility, and digital marketing. The successful completion of the Illinois iMBA, as it has been dubbed, requires the taking of six of these eight silo-breaking specializations.

Again, students only pay if they want a certificate for completing a course (at a cost of $79 that is evenly split between Illinois and Coursera) or a sequence of courses for college credit ($1,000 per course or $3,000 for the specialization) or the actual MBA degree (which will end up costing roughly $20,000).

“At a broad level,” says Echambadi, “we believe that there are many student learner segments in the market. Among other things, there are the (a) ‘credit/credential seekers’ who value content but also require the credit/degree for pragmatic reasons of signaling to the marketplace, (b) there are the ‘need the knowledge but do not need external validation’ segment, and (c) ‘need the competencies but do not need a degree’ segment.

“So we distinguished between ‘basic’ content and ‘augmented’ content. Basic content provides you with all of the information but augmented content is much more than information. It is engaging content because a student engages with the subject matter expert and fellow students in deeply meaningful ways. Basic content is free on the Coursera platform but augmented content is provided at an affordable price on our platform. And we let students self-select what they want. We welcome this. This is a novel aspect of our model.”

Whether would-be students will find that “augmented” model worth twenty grand is another matter. In any case, Echambadi doesn’t seem all that concerned about it. “At the end, we decided that we do not need to monetize every aspect of our content,” he tells Poets&Quants. “There are advantages to the provision of free content. The MOOC approach is excellent for extending our brand and bringing value back to campus and to alumni."

And there is, after all, the issue of having the discipline to take an entire MBA curriculum for free. When you have skin in the game, the anecdotal evidence and research shows, you tend to stick with it. When you don’t, you often drop out. That’s why the completion rate on free MOOC courses is under 5%, but significantly rises when learners agree to pay the $49 or more for a certificate that verifies they have taken the course. Ultimately, Illinois may be counting on the fact that relatively few learners will have the discipline to take advantage of what they can literally get for nothing.

To find out more about the University of Illinois' new iMBA degree and how you can take it for free, check out PoetsandQuants.com:

A Breakthrough: A Top 50 MBA Program for $20,000--Or For Free