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Bloomberg View: Graduating magna cum latte

Bloomberg View

First Published Jun 17 2014 09:47 am • Last Updated Jun 17 2014 03:19 pm

College degrees often have fancy names, take a long time to get and cost more than they should. In other words, they’re already a lot like Starbucks coffee.

So maybe it’s not surprising that the Seattle-based coffee chain says it plans to start helping employees pay for college. It’s a welcome development, from both an educational and employment standpoint, even if Starbucks claims for it are slightly exaggerated. In corporate PR, as in college grades, a little inflation is to be expected.

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For those working at least 20 hours a week, Starbucks will pay part of the cost of tuition for the first two years of an online bachelor’s degree at Arizona State University. The idea is that with tuition support from Starbucks, Pell grants and other federal aid, and financial assistance set up by the university, employees will be left to cover less than half of the cost of a full-time education. Starbucks says students will have the entire costs covered — now about $15,000 a year — for their final two years.

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.

This isn’t necessarily altruism on the part of Starbucks — nor should it be seen as such. First of all, federal student aid is what makes it possible. Second, Howard Schultz, the company’s chairman and chief executive, predicted the policy will allow Starbucks to attract and retain better employees, while benefiting Starbucks’s reputation.

Starbucks’s approach may also provide lessons for other companies and for institutions of higher learning. That includes examining what incentives best encourage part-time workers to pursue a degree, and whether increasing financial support in the third and fourth years of a degree can help improve college completion rates. If Starbucks can show that such programs enhance productivity, other companies may do the same.

That said, it’s worthwhile to note just how limited this program is. It applies only to online courses from Arizona State. Some Starbucks workers may prefer to pursue a degree in person at a local college or community college, or online elsewhere. Those programs don’t qualify.

All else being equal, many options are better than one — but one is better than none. By offering its employees this program, Starbucks is making college more accessible for its employees. They may find the extra shot is worth it.




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