Starbucks Offers Free* Higher Education: Details Emerge

Yesterday, I wrote about Starbucks’ innovative partnership with Arizona State University (ASU) Online to offer a free higher education for its employees. While the program will certainly provide many employees with a low-cost higher education, the education won’t be free because of the many strings attached. Student employees will have to bear significant upfront costs and risk, including having to maintain Starbucks employment and complete 21 credits before being reimbursed.

More details have started emerging about the plan, so I thought I would provide them here along with some other reactions from around the web:

  • Over at the New York Times, Lacey All, Starbucks’ strategy director, reiterated that the 21-credit threshold is an incentive for completion. She clarified further that even though student employees will have to complete 21 credits to be reimbursed fully, they will still receive a scholarship that will lessen their upfront costs.
  • Meanwhile, the Chronicle of Higher Education reports that Starbucks isn’t bearing any of the costs of those upfront scholarships. Instead, ASU will be chipping in approximately $2,420 for juniors and seniors per 12-credit course load. That’s about 40 percent of the cost of ASU Online’s lower-priced degree programs. If a student also receives a full Pell Grant, their remaining tuition and fees are likely to be low. Freshmen and sophomores will receive only about $1,267 of a scholarship from ASU and will not be reimbursed by Starbucks.
  • Libby Nelson at Vox writes that college dropouts are the real target of Starbucks’ tuition plan. Given its focus on juniors and seniors, that seems a likely scenario to me. It is also possible that this will be a way for student employees to earn a low-cost associates degree from a community college first, and then transfer to ASU Online to finish a more highly-subsidized bachelor’s degree. That could work for students as long as they didn’t lose too many credits through the transfer process. ASU provides an online portal to help students figure out whether their credits will transfer.

It’s good to see an employer get some skin in the game when it comes to ensuring an educated workforce. Although not technically a free higher education, this plan will certainly provide a benefit for some Starbucks employees looking to complete their degree. And the fact that employees will only have to work 20 hours a week to be eligible is huge.

As more details emerge and student employees start taking and completing courses, it will be interesting to hear what their outcomes are. It would be great if Starbucks kept track of students taking advantage of the benefit and publicly reported their outcomes—and tweaked the plan accordingly in subsequent years to meet its employees’ needs.

[Cross-posted at Ed Central]

Rachel Fishman

Rachel Fishman is a policy analyst for the New America Foundation Education Policy Program.