Starbucks announced this week that it will offer full tuition reimbursement for employees seeking a bachelor's degree. There are a couple of stipulations, however. First, students have to work at least 20 hours a week at Starbucks. The full tuition reimbursement is only for workers' junior and senior years in college; partial reimbursement is available for freshman and sophomore years. As with most tuition reimbursement programs, employees have to pay the costs of enrollment and tuition upfront, and then make sure they comply with all the elements of the program to get the reimbursement. The support is for full-time students who enroll at Arizona State University, where they may choose from among 40 online degree programs. Starbucks' more limited support for attending other colleges will be phased out by 2015. So, the questions are: which employees will Starbucks' new benefit likely help, and how much will it help them?
On the first question, the program’s structure indicates Starbucks is targeting the type of students that are often termed “traditional” students. These are students who are young, who are coming to college straight from high school, who can rely on parents or family to cover their basic living expenses, and who are ready to start college-level work. The Wall Street Journal reported last year that only 29 percent of college students are traditional, and a number of scholars have noted the growth in characteristics considered non-traditional, with one report noting that over a third of college students are 24 years or older, more than half attend part-time or part year and nearly half are financially independent. The full-time study requirement effectively excludes those employees who are trying to live on their earnings from Starbucks, as a mere 20hours of work at Starbucks is unlikely to pay the rent, the heat, keep gas in the car and other basics. And experts generally agree that working more than 15-20 hours per week weighs against student success in college.
There are also limitations in career choice -- students interested in nursing or teaching, for example, will not find a program that prepares them for the certifications they would need to enter those fields. Students who might be interested in two-year vocational degrees in areas related to manufacturing or building maintenance and management will also not find these types of training available. Degrees where there is also a practical component or that require hands-on training are difficult to manage in an online format.
So, the help is suited to "traditional" college students, but it is less well-suited to the large and growing proportion of "non-traditional" college students -- adult students, part-time students, students who have to assume financial responsibility for themselves and work full-time, students who may have to support other family members. For these students and low-wage workers, the Starbucks program may offer limited help in getting to the next rung on the education and employment ladder.
For those employees who can take advantage of this assistance however, how will it help? First and foremost, this will clearly be a boon to Starbucks employees seeking to avoid higher education debt. Today's college students and graduates struggle with mounting debt burdens and the ability to complete a degree without a mountain of debt is indeed a very big deal. Many will be very grateful.
Will these degrees in turn help Starbucks employees find better jobs? That's less clear. The New York Federal Reserve finds that a higher proportion of college students today are in non-college jobs -- jobs that don't require a college education. Moreover, they also find that fewer are in what they term "good non-college jobs" and more are in "low-wage jobs" and more are likely to be part-time. Further, consistent with other work, they find that students with certain types of degrees -- notably in health and education -- are less likely to be employed in non-college jobs. (Fortunately, ASU does have some engineering, which is also top of the list for graduates finding employment in jobs that require a college degree.)
Finally, because the education is offered online, some of the other benefits from college -- like new connections to peers and professors, or businesses that recruit at the college or offer internships to local students -- won't be available to these students. It could be the case that virtual relationships formed through online education could help strengthen social networks that will in turn be helpful in finding better work, but then again, they might not.
So there are many questions that remain about how effective this program will be in terms of helping Starbucks employees. But at a time when companies are reducing benefits for workers and continue to only value cutting labor costs, Starbucks' willingness to invest in their workforce and its efforts to provide their workers with additional opportunities should be applauded.