Arizona State and Starbucks in Pathbreaking Educational Benefits Deal

By | June 17, 2014

Arizona State University (ASU) is taking a page from the playbook of University of Maryland University College (UMUC). While there seems to be a Starbucks coffee shop on every corner, the U.S. military services are still larger employers of young Americans without a college education. UMUC has grown to be the largest online educational enterprise in the world (261,000 online course enrollments in 2013) providing degrees and transferable credits to U.S. active duty personnel, many of whom earn credit for courses while posted overseas.

Many private employers offer undergraduate tuition support programs but the trend has been to support education which is related to improving job performance.  The approach that Starbucks is taking stands out because any of Starbucks 135,000 U.S. employees working at least 20 hours per week can get generous tuition support to take courses and earn degrees in any of ASU’s 40 online degree areas.  Having said that, the Starbucks program has important qualifiers — in particular, reimbursements are provided in increments of 21 credit hours such that a student must pay ASU and complete those credits before receiving the reimbursement (see Starbuck’s own material for more details).

The collaboration between Starbucks and ASU Online will not reach the numbers of young people that UMUC does (ASU estimates 15,000 to 20,000 students per year) but this could presage a fundamental and important shift in access to higher education. 
While it’s too early to claim success, Starbucks deserves credit for being innovative. Before today young Americans who needed a job with deep and broad educational benefits to afford a college education had only a few choices, the U.S. military first among them.  UMUC has shown that online delivery of low-cost-per-credit-hour higher education to working adults is a sustainable business model for a university. If other large private employers join Starbucks, and other universities join ASU and UMUC, we may see higher education benefits rivaling health care benefits as a deal closer for the best young employees.