Starbucks will help employees attend online courses at Arizona State:
The plan comes with a few caveats, according to The New York Times: employees must work at least 20 hours per week at Starbucks and meet admission criteria for ASU. The online program at ASU admission requirements are the same as general admission, with average SAT reading and math scores of 508 and 491, respectively, an ACT score of 22, and a high school GPA of at least 3.0 necessary for acceptance.
While restricting this plan to one school might seem limiting, the Arizona State online program is a pretty good one. U.S. News ranks ASU’s the ninth-best online bachelor’s program in the country. Nearly 200 of the school’s full-time faculty teach courses available online (the average teaching experience for online instructors is seven years), the program has a retention rate of roughly 80 percent, and a little more than one-third graduate in three years.
The Bloomberg editors are pleased with the new tuition scheme:
What makes this different from other companies’ tuition-support programs is that employees don’t have to stay at Starbucks after they graduate. Nor is the benefit limited to long-serving workers; anyone can take advantage of them, regardless of how long he or she has been with the company. And there are about 40 programs to choose from.
Danielle Kurtzleben believes it’s a pretty good deal for Starbucks:
Starbucks’ new program isn’t about altruism. Research shows educational reimbursement can have big benefits for employers. One issue is taxes. The first $5,250 in tuition benefits accrue to workers tax-free, making tuition payments a way to get more bang for your compensation buck. (That said, a Starbucks spokesperson told the Chronicle of Higher Education that the “vast majority” of workers won’t hit the $5,250 threshold.)
But another issue is that different employees will value a tuition benefit differently, and tuition assistance might disproportionately appeal to higher-quality workers. In a 2002 NBER working paper, Wharton School of Business Professor Peter Cappelli studied Census data and found that employees who use tuition assistance are more productive than their peers. In addition, those extra abilities are not readily visible to most other employers who are competing for talent; the very act of offering tuition assistance draws in people with those higher abilities. An employer doesn’t have to go looking for them.
But Andy Thomason urges baristas to check the fine print:
Participating employees will get reimbursed only for every 21 credits they complete (the equivalent of about seven courses) and only after the fact. Starbucks says the rule is meant to encourage completion, rather than having employees sporadically take a handful of classes. But for someone living off a barista’s wages, that’s a pretty hefty chunk to pay upfront.
And Rachel Fishman argues that, “like many ‘free college’ programs, this benefit comes with a lot of strings attached”:
In this situation, the student picks up the tab first, and then if they are successful Starbucks will pay the student back. Removed from the equation is the institution. ASU Online is an expensive school. At approximately $15,000 a year for tuition and fees alone, the price is more than four times the price of an average community college ($3,264) and a little less than double the average in-state tuition rate of $8,893. Undoubtedly, this program will benefit some of Starbucks’ 135,000 employees. But anyone who thinks this may be an innovative solution to the college cost problem is mistaken.
Related thread on tuition costs here.
The Dish 