What is a free MBA worth in the marketplace?

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Coming soon: a tuition-free MBA. It was announced this week from University of the People, which already offers no-tuition bachelor’s degrees. The idea of its new degree is to extend advancement opportunities to people who can’t afford graduate business education. The question is whether an MBA from an untested new program will be worth their time, as many employers may be skeptical of a new degree from an online program.

Tuition alone for an MBA from an elite school typically tops $120,000 over two years. A University of the People graduate will pay only about $2,400 in fees. Expenses stay low through online classes and support from foundations.

University president and founder Shai Reshef is realistic when it comes to competing with other business schools.

“People who can get into great universities which will cost a great amount of money, if they can do it and afford it, they should do it,” he said.

The idea is to create a space where people who could never afford any MBA can pick up skills that’ll advance their careers. University of the People’s program is accredited and professors from top global business schools are supporting it. But despite its credentials, it’s still hard for managers who might hire these graduates to gauge the value of a degree from such a new and unusual program.

“I’ll be curious to see how employers look at that,” said Russ Poulin, policy and analysis director at WCET, a nonprofit that tracks online higher education. “It is not a brand that is well known.”

The value of the degree could increase over time if the program’s reputation grows. University of the People’s undergrad program has already attracted thousands of students from around the world. Reshef said based on the early response, he’ll have no trouble filling his first MBA class. These students will begin their studies in September.