(Read more: The $89,000 online MBA degree)
Yet, the steep price tag of taking online MBA classes didn't discourage Pedrazzini from enrolling.
The reasoning? He could stay in California and keep his job at Lockheed Martin. His company was also picking up most of the tab.
"I think we all saw the risk that an online MBA, a new program, poses," Pedrazzini said. "This was something that the world never saw before … but I think that it is absolutely worth it."
(Read more: Comparing CEO and worker paychecks)
Pedrazzini hopes the MBA will help him think more like an executive and open doors for his career. Apparently, so do many other students.
A program that began with just 19 students—90 percent of whom graduated on time—now boasts 460 students.
Doug Shackelford, associate dean of the business school, noted that UNC is the first top-20 business school to offer an online MBA program. Shackelford said it teaches the curriculum with the same rigor as the regular program.
"The students in our program spend a lot of time on the road," said Shackelford. "All you need is a broadband connection to attend our classes which are run as video conferencing. They are all live classes."
This idea of earning online degrees appears to be gaining acceptance in corporate America, according to a recent survey.
The Graduate Management Admission Council finds 21 percent of recruiters plan to hire online MBAs versus 18 percent just two years ago.
(Read more: What's an online MBA degree really worth?)
In fact, the Tepper School of Business at Carnegie Mellon University—another top-20 school—is getting in on the game. It's launching an MBA degree which combines online learning with weekend on-site classes.
"Without a doubt online is up and coming. People are very busy and they want education. ... And we are more comfortable with technology," said Jim Del Greco, director of the New York office of Global Employment Solutions, a provider of professional staffing services.
"MBAs do help people. The schools are absolutely critical to your long-term success in the business world."
But those online MBA graduates could be at a disadvantage.
Del Greco believes the key ingredient of attending MBA classes in person is building relationships and the ability to interact with classmates
"If you are talking about an equal school in prestige and academics … then bricks and mortar trumps online, from what I have seen," Del Greco said. But, he added, an online MBA degree from a prestigious school will take precedence over a traditional MBA program from a less-competitive university.
What about those who don't divulge whether they got their MBA degrees online?
Employers will find out. Del Greco said they all do sophisticated background checks.
—Steph Landsman is a producer with CNBC's "Fast Money." Follow her @StephLandsman on Twitter.