The average MBA tuition costs between $55,000 and $68,000 a year, according to U.S. News. The average debt for new grads at some of the top business schools can range from $59,000 to over $120,000. But at University of the People, you can score a tuition-free MBA with little to no debt, says founder Shai Reshef.
"Higher education can be affordable, and accessible and high quality," he tells CNBC Make It.
In 2009, Reshef officially launched University of the People, the first tuition-free, accredited online university. Immediately after launching, Reshef says he was swarmed with top educators who wanted to partake in his business.
The concept is simple. The university is completely run by volunteers, from the professors all the way up to the provost, who volunteers from Columbia University, says Reshef. The school also boasts volunteer professors and advisers from notable colleges like Oxford, Harvard, Duke University and UC Berkeley. Currently, the university has more than 6,000 volunteer professors, Reshef says.
Meanwhile, the number of interested students has risen each year. When the online university first launched, the school had 500 students. In three years, the number of students jumped to 10,000 and Reshef believes that it will double by the end of this year.
The school first began offering tuition-free associate and bachelor's degrees in business administration and computer science. "We started with both of the most in-demand degrees that are most likely to help students find a job," says Reshef.
The university later introduced a health science track and then a graduate business degree in 2016. "The MBA is our fastest growing program," Reshef says. That's not surprising. According to U.S. News, a new MBA grad can earn up to $164,000.
Reshef says he founded University of the People because there are over a million people a year who are qualified for higher education but can't attend due to factors like cost.
In his 2014 TED Talk titled an "Ultra-low-cost college degree," he says that he wants to democratize higher education "from being a privilege for the few to a basic right, affordable and accessible for all." His speech has since amassed over 4 million views.
"We provide an opportunity for people who have no other opportunity," Reshef tells CNBC Make It. The university's founder believes that with time, we will see not only more online universities, but also cheaper or free education.
"In online, there are no limits," he says. "Every single university is now offering online courses so movement is on its way."
Reshef does note that students who are accepted to the school must pay $100 for each exam that is required. However, he says the total cost is significantly lower than the "quarter of a million for standard colleges."
As online universities become a more popular option for students, they will also affect the price of tuition at brick and mortar institutions, says Reshef. Costs like campus maintenance and technological fees will no longer be relevant and "prices will go down because there will be less demand," he explains.
"[Colleges] will have to justify the costs if they don't keep up," Reshef says. "There will be price pressure on every university."
Reshef admits that online universities are not yet the top choice for a majority of people. However, he points to the fact that his graduates have landed jobs at in-demand companies like Google, Amazon and IBM as a testament to the quality of education they receive.
"People who are educated are more likely to find better jobs," says Reshef. "We train people to be entrepreneurs and to be creative."
He adds, "They are people likely to be a force behind new entrepreneurship and to create businesses in their communities."
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