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MBA enrollment is down again. What’s the future of the degree?

(Daniel Acker/Bloomberg)
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It’s almost impossible to drive down the interstate, walk through an airport or surf the web without seeing advertisements for a master of business administration degree. And there’s good reason: At many colleges and universities, the traditional graduate business degree has fallen on hard times. So schools are recruiting potential students everywhere.

Applications to U.S. M.B.A. programs dropped 7 percent last year, sliding downward for the fourth consecutive year, according to a survey by the Graduate Management Admission Council, a nonprofit that oversees the GMAT admissions exam. Full-time MBA programs seem to be in the most trouble, with more than 70 percent of business schools reporting a decline in applications in 2017.

As a result, some business schools, including those at Wake Forest University and Simmons College, have pulled out of the full-time, on-campus MBA market after years of declining applications and enrollment, and others have been cutting tuition to attract prospective students worried about leaving their jobs to go back to school. Even full-time programs at elite universities are beginning to struggle after years of being immune to national trends, as are part-time programs offered with traditional concentrations, such as marketing and accounting.

After more than three decades of surging enrollment in MBA programs and a fourfold increase in degrees awarded annually, some business leaders and university officials are wondering if the credential has peaked.

Not all MBA programs face the same headwinds. “The schools that haven’t added concentrations, gone online or offered more flexible pathways to a degree are the ones struggling,” Nancy Albers told me. She’s dean of the College of Business, Education and Human Development at Louisiana State University at Shreveport.

It is business schools like Albers’s — at regional public universities such as Fitchburg State University in Massachusetts and the University of North Carolina at Pembroke — that in some cases are showing surprising growth in MBA enrollments despite their lack of brand names. Many have shuttered face-to-face programs or scaled them back and moved to accelerated degrees online with concentrations in high-demand fields in data analytics and cybersecurity. At Shreveport, enrollment in the online MBA has grown from some 400 students in 2014 to more than 3,000 today.

“We’re responding to what students are telling us they need,” Albers said. And that includes the price. Students at Shreveport can complete a 10-month program for about $12,500.

Louisiana State University at Shreveport, like many universities that have started online programs, has turned to outside companies to market and recruit students and to provide technical support, although admissions decisions and teaching duties remain with the university. Both sides split the tuition revenue in such arrangements.

One benefit of using outside companies for marketing and recruitment is that they have the technical expertise many universities lack, said Albers, whose academic background is in marketing. For instance, Shreveport’s partner provides the university with the most popular online keyword searches related to business degrees, which allows school officials to quickly respond to trends in the job market and create or eliminate concentrations. “Armed with that data, I’m able to go to the faculty and build programs very quickly,” Albers said.

While an MBA degree from a regional public university certainly lacks the name recognition of one from a top-ranked program, the motivations for students going to both types of institutions also differ, said Alberto Cardelle, provost and vice president for academic affairs at Fitchburg State. “Students are enrolling in our degree to gain skills and competencies that they need to apply on a job immediately,” Cardelle said. Top-ranked programs, he added, sell themselves to prospective students based on their alumni networks.

The survey from the Graduate Management Admission Council seems to indicate that shorter, more specialized programs are the future of graduate business education. More than one-fifth of prospective business students are interested exclusively in specialized master’s programs in fields such as data science and supply-chain management because they are narrowly focused compared to a traditional MBA, and usually lead to a specific job.

“The popularity of master’s degrees will increasingly depend on if the return on investment for students makes sense,” said Anthony P. Carnevale, director of Georgetown University’s Center on Education and the Workforce.

It’s likely that the MBA and other professional master’s degrees that don’t require occupational licenses to get a job will be forced to develop programs that are faster and cheaper than the current offerings in order to survive.

Several universities, including the Massachusetts Institute of Technology, the University of Pennsylvania and Boston University, are experimenting with micro-masters degrees online. In those programs, anyone can take a suite of courses, and those who do well and pass a set of proctored exams can earn a credential. The mico-masters is equal to somewhere between a quarter and a half of the course material of a typical master’s degree.

Eventually, students might be able to use a micro-masters to enroll in a full degree program having completed all but a semester or two of a full-blown master’s. It’s also possible that in the future, a micro-degree will be enough for some students to get a job or get promoted, and the venerable MBA will become a luxury product.