Starbucks announced a new tuition reimbursement program for its employees Monday. The program is being praised for its generosity but some critics warn that it may not be as beneficial for employees as the company’s old program.
The new benefit is part of a partnership between Starbucks and Arizona State University's online studies program. It is available to both full-time and part-time employees and allows students to choose from any of 40 undergraduate degrees without any requirement that the employee stay with the company upon completion of the course work. The benefit potentially pays for two full years of classes.
Starbucks CEO Howard Schultz said the new benefit will allow employees, known as “partners” within the company, to achieve a degree in a difficult economy.
"The rules of engagement for running a company that is people-based like Starbucks, and so many other companies: you just cannot continue to leave your people behind and only focus on shareholder value,” Schultz said in an interview with CNN.
"I feel so strongly this is the right thing to do and Starbucks as a company is going to benefit in ways that probably we cannot identify today,” he added.
In many ways the new benefit is more generous than the company’s old tuition reimbursement program which topped out at about $1,000 per year for each employee. The new benefit supplements education costs to the tune of $30,000 per employee. However, it is far less flexible in that students can only take ASU’s online courses.
Dr. Sara Goldrick-Rab, a professor of education policy studies at the University of Wisconsin, told Think Progress about the problem.
“It’s a farce to claim to be offering ‘free college’ to employees when what’s being offered is simply the chance to pursue a degree at one specific university, only online, only if you enroll full time and work at least 20 hours a week,” she said.
Dr. Siva Vaidhyanathan, the Robertson Professor of Media Studies at the University of Virginia, agrees.
Vaidhyanathan said it was troubling that Starbucks would make an exclusive deal with “one particularly aggressive institution.” He claims that ASU runs its online degree program as though it were a business and he questioned the educational value of the degree. He asserted, “There’s a lot of questions we should be asking about how ASU is going to retain a high level of quality when all of its incentives are geared to pushing more students through the system.”
“The fit with the needs of employees here is weak,” said Goldrick-Rab. “They are less likely to benefit from online education and a supportive company would allow them to attend the local public college of their choosing in person.”
ASU charges $482 to $543 per credit. Vaidhyanathan said that one community college near his office charges about a quarter of that, but a Starbucks employee would be forced to pay all of that amount if he or she did not use the company’s tuition program.
“It seems to me to be a huge scam that Starbucks is running here in conjunction with ASU, because the idea here is to make both brands shine here in the public mind,” he said. “But in fact, this is nothing close to anything helpful.”