Free College for Starbucks Employees: Worth It?

Last summer Starbucks launched the Starbucks College Achievement Plan, a program that offers free college tuition for its employees. At first glance, it may seem too good to be true – working toward a college degree without the student loan debt many American college graduates take on. But how exactly does the Starbucks College Achievement Plan work, and what are some of its underlying issues? Is it right for everyone?

If you’ve thought about getting a job at Starbucks for the free tuition or are curious about the finer details of the program, here are some key points.

How does it work?

The plan doesn’t offer employees free tuition at any college or university, just Arizona State University’s online extension, which offers 40 undergraduate degree programs.

All Starbucks employees or employees of company-operated stores who are eligible for benefits and who have not previously completed a bachelor’s degree can apply, according to the Starbucks College Achievement Plan.

More importantly, the “full reimbursement” advertised is reserved for students classified by ASU as juniors and seniors. Freshman and sophomores receive only a partial scholarship of $1,267 per semester with no reimbursement. Students who qualify for full reimbursement are also required to pay for the cost of tuition up front, aside from a $2,420 per semester scholarship, which is given upfront. Once employees have completed 21 credits of coursework, Starbucks reimburses them for the cost of tuition via their paychecks.

Student tuition ranges from $480 to $543 per credit hour, according to the Online ASU website. For 21 credits, this equates to about $10,080 to $11,403 for students enrolled in the program. Even when you take into consideration the scholarship Starbucks provides ($2,420) at the outset, the student must still come up with $7,660 to $8,983 upfront to cover tuition expenses. This often requires students to take out loans.

What About Profitability?

In an interview with MSNBC, Sara Goldrick-Rab, a professor of educational policy studies and sociology at the University of Wisconsin-Madison, criticized the program and its underlying issues, calling the arrangement “incredibly problematic.” Goldrick-Rab said Starbucks and ASU have “gotten together and created a monopoly on college ventures for Starbucks employees.”

One of the most questionable aspects of the plan, according to Goldrick-Rab, is the profit-driven nature of ASU’s online extension. With declining state aid, ASU is increasingly relying on revenue generated from online tuition. ASU has even partnered with Pearson and outsourced much of the technology and management services for their online extension to to the company.

Online Learning: Good or Bad?

Recent research suggests online classes may put low-income students at a disadvantage, Goldrick-Rab said. These are the same students that are most likely to take advantage of a free tuition program, but the studies indicate that online education “not only doesn’t work well for them, but can also propel them backwards,” she said.

Despite this criticism, there are certainly a number of benefits to taking classes online rather than in person.  Some advantages of online education include:

• Classes are available 24/7
• Students can work and go to school simultaneously
• Students can complete homework on their own schedules
• Students can learn at their own speeds

Final word

Ultimately, whether the Starbucks College Achievement Plan is mostly positive or negative comes down to each individual’s situation. There are a couple obvious drawbacks to the program and some underlying questionable issues at hand. However, for someone who needs flexibility in their school scheduling, needs to work while they are in school, and wants a college education with minimal student loan debt, this incentive for Starbucks employees is certainly a worthwhile option to consider.

In the end, this tuition reimbursement program is a huge step forward for employee benefits in the U.S. Hopefully, other companies create similar programs and improve upon the model that Starbucks has implemented.

Update April 2015:

Update to Starbucks policy:
Starbucks made changes to its College Achievement Plan. Under previous regulations, only employees in Junior or Senior standing with ASU’s online extension qualified for complete tuition coverage with only partial scholarships available for Freshman and Sophomores.

However, on April 6th, Starbucks stated in a press release that it was extending this full coverage to include all four years of college tuition for its employees.

While this may seem like a great improvement from the previous limitations of the College Achievement Plan, it’s important to know that Starbucks is also changing its tuition reimbursement policy for employees attending colleges and universities other than ASU. Until now, Starbucks has offered tuition reimbursement of different amounts depending on service, with employees who have worked for 60 months or more being eligible for the highest value of reimbursement – $1000 per calendar year. Effective December 31st, 2015, this program will terminate.