How Starbucks is Modernizing the Free Tuition Benefit for the 21st Century Worker (2)

16/06/2014
The announcement coming from Starbucks today that it will pay for an online degree from Arizona State University for thousands of its workers has the chance to shift the conversation around a college education as an employee benefit much like the company did with health insurance for part-timers in the last decade.
Many employers have long helped pay the tuition bills for their workers, but in recent years companies have become stingier about the benefit. Some employers are requiring workers to pay back the benefit if they bolt for another job after they graduate. Some have tightened up on the types of classes and degrees they will pay for. And even as tuition rates have risen, nearly all have declined to sweeten the maximum benefit, instead sticking with what the federal government allows them to deduct annually from taxes (up to $5,250 per employee from their revenue), an amount that has not changed in nearly three decades.

       "Most companies have designed their tuition benefits for a 20th Century workforce.
That’s why the announcement from Starbucks is significant. Its tuition plan is open to any U.S. employee as long as they work 20 hours a week and can gain admission to Arizona State. For those with two years of college, Starbucks will pay full tuition. For those with fewer credits, it will pay some of the cost, with university and government aid picking up the rest for many students. (In the interest of full disclosure, I'm employed part-time income at Arizona State as a professor of practice).
Most companies have designed their tuition benefits for a 20th Century workforce. The Starbucks plans designs the benefit in a way that is consistent with how the economy works in the 21st Century in four important ways:
It doesn’t hold employees hostage.
Americans switch jobs, on average, every four years. Most employees never tap tuition benefits because they’re not around long enough in a job to complete a credential or they don’t want to pay back the benefit if they leave within a specified time period. Because the Starbucks benefit allows an employee to be a full-time student, its workers can complete a degree quickly.
We all benefit from an educated society.
Some might question why a Starbucks barista needs a college degree. By giving this benefit without strings attached, Starbucks is saying that its baristas don't need to keep filling orders for tall cappuccinos once they have a degree. They are free to move on. Starbucks CEO, Howard Schultz, realizes an educated society benefits all, even if he is training his employees to launch new careers and go work somewhere else.
We allow employees to take their retirement accounts with them, so why not their education. Schultz told the Chronicle of Higher Education that his plan demonstrates "the role and responsibility of a public company" at a time when education matters and "so many people are being left behind."
Completing a degree matters.
One in five Americans between the ages of 25 and 64 attended college but never earned a credential. That’s because some 400,000 students drop out of college every year. The economic and social benefits of a college education go to those who actually complete a degree, not just have some college. Schultz recognizes that difference by completely subsidizing the credential for those at least halfway toward a bachelor’s degree.
Employees are time-pressed, and often location bound.
Fully online education is not for everyone. Research has shown that it's often best for students who are highly skilled and motivated, not for struggling students. So benefits like this that only offer online courses don't help all employees and it would be better if Starbucks workers had some choice of institutions beyond Arizona State. Still, given the hours of most Starbucks employees, partnering with an online provider makes sense since students are limited as to where and when they can go to schools. But even employees outside of retail are time-pressed and location bound. Often, fully online courses are their only choice.
The Starbucks plan has some shortcomings (need to enroll full-time, only online, only at Arizona State), but its basic design is one that recognizes the needs of the 21st Century employee. Other companies should take notice and update their policies for today's workforce.
Jeffrey Selingo is author of College (Un)Bound: The Future of Higher Education and What It Means for Students, and of the forthcoming e-book, MOOC U, an inside look at the world of massive open online courses, due out this spring from Simon & Schuster. He is a contributing editor at The Chronicle of Higher Education and a professor of practice at Arizona State University.
Follow him here by clicking the FOLLOW button above, on Twitter @jselingo, and sign up for free newsletters about the future of higher education at jeffselingo.com.

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