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Starbucks- For Coffee and College

How Starbucks is enabling its employees to attain a bachelor's degree.

Photo of An Old Friend
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The Starbucks College Achievement Plan is a collaboration with Arizona State University to offer all full and part-time employees full tuition coverage for every year of college to earn a bachelor's degree. Starbucks realizes more than 70% of its employees are students or aspiring students, and see the ways they can support their employee's ambitions as investments in the future of the company. Tuition for ASU's online bachelor's program is about $15,000/year, which equates to around $60,000 for a full four years of coursework for a bachelor's degree. ASU automatically covers 42% of every credit taken, and Starbucks covers the other 58%, minus any additional scholarships or financial aid the student might qualify for. After the degree is completed, the employee can either choose to continue working for Starbucks or seek employment elsewhere. Students are reimbursed by Starbucks for the tuition costs at the end of each semester, and the funding is guaranteed as long as they don't leave the company in the middle of a semester, in which case they will be responsible for that semester's tuition.

What is a provocation or insight that might inspire others during this challenge?

If we could get more employers involved in covering the cost of college for their employees, either through schooling concurrent with employment or with full tuition reimbursement after they join the company, it could dramatically lessen the cost of college for many students and make it more accessible, while allowing the company more investment in its most important resource, its people.

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Photo of Sasha Stewart

Hi Morgan, I love the contribution and the ideas. I agree, companies that offer education allowance or tuition reimbursement plans will also be more competitive in the marketplace long term, since they will, be definition , attract employees with a long term view on their career.

That said, how might we create a low cost, early prototype to create a solution in that space to encourage companies to offer the same plans, as Starbucks?

Photo of Anupriya Loganathan

Being a regular Starbucks customer, this post really surprises me as I have never heard about this program earlier. Thank you very much for sharing this information.
So, as long as the employees remain in the company, the tuition fees are taken care of.? And is there any specific criteria that has been followed in the selection process of these employees at Starbucks.?

Photo of Niandong Wang

Hi Morgan,

This is a great post! Applause for Starbucks and ASU.

I posted something similar here - https://challenges.openideo.com/challenge/higher-ed/research/two-year-break-after-the-high-school-oh-and-you-get-paid - that might be of interest to you. To make more employers willing to give this a try, third parties might be needed so that it won't become a burden for businesses (especially SMB owners) to operate this kind of program.

Photo of Azeem

Hi Morgan,
I think this idea is great for students as well as companies trying to gain resources. It really brings the questions of how to make college affordable for students on the table. It would be great to see more corporations and colleges building towards this plan!

Photo of Thao Vo

Hi Morgan,
I think it is a very beautiful idea,. Tuition fee has been a real burden for students especially international ones. By this program, it will definitely open a door for students especially those who desire to build up higher educational background. On the other hand, I believe it is also a great strategic plan for any corporations in seeking for talented and loyal employees. Hope the idea will be applied soon:). Cheers

Photo of Anne-Laure Fayard

Great insights and nice way to address the issue.
As mentioned by others, I guess the question that comes up to mind is what is the incentives for companies? It reminds me of cases where governments provide grants to students to go and study abroad and in exchange students have to come back and work in their countries for a while.
This is one way of solving the challenge: assuming costs stay the same, how can we make it more affordable for students?
Can we think of this kind of partnerships as providing some solutions for reducing costs over all?
I'm also wondering if these partnerships could not offer some value by providing internships, mentors and / or guest speakers that could increase the relevance of some of the knowledge provided (an issue that arose in some other posts).

Photo of Diana Romero Delvasto

Hi Anne,

Intersting insight regarding the partnerships and the way students are able to afford tuition costs. I honestly don't know how does it work for the USA. However, in countries such as Colombia, my home country, there is a government organisation called Colfuturo. This entity offers the opportunity to Colombians that are interesting in studying their postgraduate studies abroad to apply for credits aids with really low rates. Through this program the Colombia's government is investing in students education by offering alternatives for studying abroad with the main requisite of comming back to Colombia after finishing their degree. In other words, they invest on your education with the condition of bringing back all the knowledge you acquired and then, applying it in Colombia.

Photo of Anne-Laure Fayard

Diana,
thanks for sharing your experience. I know there is a similar option in Brazil. See for example: https://challenges.openideo.com/challenge/higher-ed/research/how-universities-work-in-other-countries
I've also met Singaporeans who had a similar opportunity.
I like the point you made: "they invest on your education with the condition of bringing back all the knowledge you acquired and then, applying it in Colombia." What would that look like in the context of this challenge? I.e. is there a way to reproduce a similar model in the US? See this example in China: https://challenges.openideo.com/challenge/higher-ed/research/not-just-free-college

Photo of Beatriz

Hi Morgan,
Great model....I would like to see more corporations do this as part of their social responsibility....I have lots of students and parents working part-time at Wal-Mart and I am sure they can use a degree to move up the ladder....Good Job in providing us the example and a big shout out to
Arizona State University for being so flexible.

Photo of An Old Friend

I think this article does a good job of explaining the program in more detail, as well as the pros and cons.

http://blog.credit.com/2014/06/the-truth-behind-starbucks-tuition-plan-86125/

Starbucks clearly got a lot of praise for introducing this program, and ASU, as a for-profit institution, is reaping the benefits of having thousands more students enrolled while avoiding the physical costs that would typically accompany a university expanding its attendance (don't have to build additional buildings, construct more dorms, etc.) Starbucks gets both the goodwill it creates, as well as tax write-offs on each employee who's tuition it funds. However, I do think the article undercuts the benefits of the program by saying Starbucks student employees now "have" to attend ASU and "have" to attend online classes instead of physical ones. The reality is that many of these student employees might not have had the resources to attend a 4 year college without this program, so I definitely think the benefits outweigh the costs.

Photo of OpenIDEO

Congrats on this being today's Featured Contribution!

Photo of Heidi Wong

Nice precedent, Morgan! I wasn't aware of this type of partnership happening, but it's encouraging to see. I just wonder what's incentivizing a company like Starbucks to do this if the employees aren't obligated to stay and work for them after. Are they doing this out of sheer good will? It would also be cool to see companies making the investment for more than just online programs. I know of graduate programs that currently do this for employees, whether part-time or full-time, but wouldn't it be great if undergraduate ones did too?

Photo of Patricio Toussaint

Morgan,
First of all thanks for your contribution, I really like how Big companies are helping their employees reach their goals! I read one of the contributions that could relate to this topic made by Shane (https://challenges.openideo.com/challenge/higher-ed/research/hard-work-u)

Do you know any other companies that offer this type of grants? Do you know anyone that has participated in the starbucks college program? You could use the OpenIDEO Interview Toolkit In order to get more insights (https://d3gxp3iknbs7bs.cloudfront.net/attachments/5f542c81-e313-45f4-8bbc-5848064e6c07.pdf)

Normally Starbuck's stores are really crowded, you could relate with Irene's post:
https://challenges.openideo.com/challenge/higher-ed/research/the-idea-of-paying-it-forward

Great job!

Photo of Gavin Cosgrave

Morgan,
Thanks for sharing, this looks like a great model that other companies could follow!
Check out Heidi's post about private sector training: https://challenges.openideo.com/challenge/higher-ed/research/japan-s-employment-based-training-in-the-private-sector
Also, Ali shared about how she receives funding from private companies: https://challenges.openideo.com/challenge/higher-ed/research/how-australian-companies-are-paving-my-way-through-higher-education

Photo of Shane Zhao

Great cross-pollinations Gavin! Here's another related post - learning from the University of Waterloo's CO-OP model: https://challenges.openideo.com/challenge/higher-ed/research/co-op-program-at-the-university-of-waterloo