It's a buyer's market for MBA degrees

From the downtown Minneapolis skyways to suburban billboards, the sales pitch is impossible to miss: You need a business degree, now.

Yes, the MBA is hot.

In recent years, Augsburg College, Concordia University St. Paul and Bethel University have started master's in business administration programs, which add to the long-running programs at the University of Minnesota and the University of St. Thomas. A St. Cloud State University MBA can now be earned in Maple Grove, and Hamline University attracted more than 100 MBA students for a program that launched this month.

Throw in for-profit institutions such as Capella University, the University of Phoenix and Walden University, all of which offer online learning, and prospective students in the Twin Cities have more than a dozen places to get a MBA.

Currently more than 5,000 people in the Twin Cities area -- primarily working adults taking classes at night and on weekends -- are working on what has become a tool for advancement in the corporate world. The programs are a moneymaker for local universities.

For students, an MBA on the résumé can lead to a promotion, a new job and increased wages. Employers -- many of whom offer some tuition reimbursement in benefit packages -- get career development done on the employees' own time.

"We've seen a change in the marketplace," said Thomas Hanson, chair of Concordia's MBA program. "A bachelor's degree in business is a starting point, but there wasn't enough there. The MBA has been growing in reputation out there. It has become known as the business degree."

"It seems like the path upward and potentially outward includes a MBA," said Rich Tooley, a Boston Scientific engineer who is attending the University of Minnesota's Carlson School of Management. "It certainly doesn't hurt you."

Significant growth

Business school enrollment is growing not only in Minnesota but across the nation. From the early 1990s to 2005, the number of degrees awarded each year had grown from about 1,200 to 2,100, according to the Minnesota Office of Higher Education.

And it's largely a phenomenon of part-time students. Part-time MBA enrollment at the University of Minnesota has doubled since 2001. Most of the newer programs don't even offer full-time MBA programs.

According to the Graduate Management Admission Council, which administers the GMAT, the standardized test required to get into business school, nationally nearly 70 percent of part-time MBA programs saw an increase in applicants from 2006-07 to 2007-08. In addition, the number of registrations for the GMAT was up nearly 8 percent nationally in 2007.

Tony Wolfe, who manages a credit underwriting group at U.S. Bank, went back to school at St. Thomas for an MBA. So did his wife, who works in communications at a 3M subsidiary.

"In order to open myself up to some other opportunities eventually, I'm going to need a MBA," he said. "After a few years of not doing any education after college, I was almost getting bored, and I felt like I needed to start learning again."

Determining the value of an MBA is difficult for graduates of part-time programs, whose job advances may not be immediate. "What we've seen over time is that they do get these promotions," said Mary Whitman, the director of the MBA program at Bethel University. "The blood, sweat and tears pay off. About half of our cohort that graduated in December have more responsibility in their jobs, and two of them already have new jobs."

But the value of enrollment itself is easier to track. As employees nationally are seeing changes to their benefit packages -- usually not for the better -- many companies remain willing to offer tuition assistance.

"It's a form of cheap personnel development," said Steve Zitnick, director of Augsburg's MBA program. "They don't have to take company time or resources -- except for some cash -- to do it. And they're still getting a full day's work out of their people. [Employees] are doing this on their own time."

The changing market

For a long time, the part-time MBA market was owned almost exclusively by the U and St. Thomas. Even now, Julian Schuster, dean of Hamline's Graduate School of Management, calls them the Coke and Pepsi of the market, together enrolling more than 70 percent of the MBA students in the Twin Cities.

But starting with Metropolitan State University's decision to add an MBA program in the mid-1990s, prospective students are finding more competition for their tuition dollars.

St. Cloud State touts that it is the only school in the Twin Cities market other than the U that is accredited by the Association to Advance Collegiate Schools of Business. Concordia St. Paul's program is a combination of classroom and online learning. Other schools offer classes at satellite locations, which are more convenient for working adults.

"Clearly you don't get into this to lose money," said Christopher Puto, the dean of the University of St. Thomas business school.

"Both of us are really focused on the highest possible quality education we can give to talented student applicants," Puto said.

The competition is likely to leave some programs behind, business school deans acknowledge.

"The demand for the MBA is strong, but will we all be successful? I don't think so," said Schuster, the latest to enter the MBA derby.

"We vastly exceeded our projections. We're enrolling 50 percent more people than we originally planned, and we didn't compromise on the quality of our applicants. We do have high hopes. The battle, so to say, has been joined."

Jeff Shelman • 612-673-7478