The ubiquitous coffee chain Starbucks has received a great deal of positive media attention for its announcement that it will provide full reimbursement for tuition and fees of employees at company-owned stores who enroll in one of Arizona State University’s online bachelor’s degree programs. Education Secretary Arne Duncan even made an appearance at the program’s unveiling, alongside Starbucks CEO Howard Schultz and Arizona State President Michael Crow. But, while I applaud Starbucks for providing financial assistance to students who want to continue their education, the conditions in the model will result in fewer employees successfully completing bachelor’s degrees. Below are the reasons not all employees will benefit.
Only juniors and seniors will get a full reimbursement. The frequently asked questions document on the Starbucks website notes that there will only be a “partial scholarship” for employees who have not at least achieved junior status (likely 60 credits earned). ASU Online’s tuition rates are between $480 and $543 per credit hour, meaning that credits taken at the local community college will probably be a fraction of the cost of the ASU Online credits after partial reimbursement. This means that students are less likely to use the Starbucks program for the first 60 credits, although the promise of future reimbursement may be enough to induce Starbucks employees to go back to college.
Discussion of ASU/Starbucks
On Friday, Arizona State President Michael Crow will discuss the university's new partnership on This Week @ Inside Higher Ed, our weekly audio newscast. Click here to find out more about This Week or here to sign up for an email link to each program.
Students are not reimbursed until they complete 21 credits. This policy was designed in order to encourage completion, as the goal is to motivate students to continue their studies until they are reimbursed. However, given the per-credit cost, a student not receiving any grants from the federal government would have to pay about $10,000 out of pocket (or borrow that amount) before being reimbursed. ASU Online recommends that students take two or three 3-credit classes during each 7.5-week class window, meaning that a continuously enrolled full-time student who started in August would probably complete seven classes by March or May of the following year. Students can also qualify for reimbursement by enrolling part-time, but they may take two years to complete the 21 credits necessary for reimbursement. This also provides a strong incentive for students to stay at Starbucks to claim the benefit, which can limit their mobility as employees but may be worthwhile given the potential value of the benefit.
The delay between paying tuition and fees and being reimbursed introduces substantial risk for students. A student who is willing to pay up to $10,000 and get reimbursed later only if successful likely has a higher tolerance for risk, is more willing to borrow, and is more likely to complete courses than a student who is hesitant to participate in the program. This means that the Starbucks employees who participate in the program as currently constructed are probably from higher-income families with more social and cultural capital — potentially minimizing the social mobility the program offers. Reimbursing students after each successfully completed course would help mitigate this risk and reduce the amount of money students have to pay upfront.
Reimbursements by Starbucks take place after other grant aid is applied, making the company’s contribution smaller. Students are required to file the Free Application for Federal Student Aid (FAFSA) in order to participate in the program and any grant aid received will be applied before Starbucks makes its contribution. Consider the case of a student with a zero expected family contribution, representing the greatest level of financial need, who enrolls for 12 credits in a semester. Her tuition at $500 per credit would be $12,000 for the academic year. She is eligible for the maximum Pell Grant of $5,730 in the 2014-15 academic year, which is applied before any aid from Starbucks. This leaves $6,270 uncovered by the Pell Grant, but Arizona State is offering scholarships of $4,840 per year to all Starbucks employees. The resulting $1,430 would be paid by Starbucks if the student didn't receive any other grants or scholarships. This is an admirable contribution, but most of the burden of financing the student is not on Starbucks.
Online education may not be right for everyone, yet it is the only option funded. It is far easier for Starbucks to work with one college than hundreds for administrative purposes. However, the lack of choice in the program may not be best for all students. ASU Online does offer about 40 majors, but they are all online — and research suggests that online courses may not work as well as face-to-face courses for students from lower-income families. While I don’t know enough about ASU’s programs to pass judgment on their quality, some students may not be interested in enrolling online even if the quality is high and the cost to the student is low.
All of these factors suggest that the percentage of Starbucks employees who successfully complete a bachelor’s degree as a result of the tuition reimbursement program will be fairly low. Starbucks should be commended for offering this benefit to its employees, but policymakers shouldn’t expect this program to substantially move the college completion rate dial in its current form.
Robert Kelchen (@rkelchen) is an assistant professor in the department of education leadership, management and policy at Seton Hall University. He blogs at Kelchen on Education. All opinions are his own.
Old Dominion University will for a two-year pilot let those who have earned a 3.3 grade-point average in high school apply without submitting SAT or ACT scores, which have until now been required of all applicants. Ellen Neufeldt, vice president for student engagement and enrollment services, said that hope was to attract more economically diverse students. “We want to have the best level playing field for all our students. We want to make sure they are successful,” Neufeldt said.
When children have health insurance, they are more likely to finish high school, enroll in college and earn a bachelor's degree, according to a study released today by the National Bureau of Economic Research (abstract available here). The study uses Medicaid expansions of the 1980s and 1990s that expanded the share of children in the United States with health insurance and tracks the impact on those who became eligible as children.
The study found that a 10 percentage point increase in average Medicaid eligibility for those 0-17 years old leads to a decrease of 0.5 of a percentage point in the high school dropout rate for the population and increases in college enrollment of between 0.7 of a percentage point and 1.0 percentage point, and increases in bachelor's degree attainment of 0.9 to 1 percentage point. "These estimates translate into declines in high school non-completion of about 5 percent, increases in college attendance of between 1.0 percent and 1.5 percent and increases in B.A. attainment of about 3.3 percent - 3.7 percent relative to the sample means," the study finds.
The authors note the relevance of their findings to the expanded coverage many children may be receiving under the Affordable Care Act enacted in 2010.
The paper is by Sarah Cohodes of Harvard University; and Samuel Kleiner, Michael F. Lovenheim and Daniel Grossman, all of Cornell University.
Universities, as seats of learning and powerhouses of research, are stepping up to assume a new role. In the wake of a global financial meltdown and consequent challenges to the fabric of many societies, universities are emerging as powerful catalysts and indeed drivers of socioeconomic growth – not only through research or technology transfer, but by assuming responsibility for preparing students for jobs in delivering today’s highly skilled workers and tomorrow’s innovators and leaders of industry.
That’s why the employability of our graduates needs to take center stage and why I applaud the Obama administration’s recent call to action in this regard. The emergence of new institutional rankings to compare the "value" delivered, such as graduate employment and earnings across institutions, means that employability has become "our job." And we need to take this responsibility seriously if we want to successfully compete in the global marketplace for higher education. Universities need to understand that we have a social duty and perhaps a moral one too, to help successfully launch our talented graduates into society.
Here in Britain, employability outcomes are already part of our world and feature heavily in the key performance indicators of British universities. Our Higher Education Statistics Agency collects and reports national data on our publicly funded institutions, including employment rate overall from each university and type of employment outcome. And while our American cousins are decades ahead in areas such as philanthropy and have helped our journey, Britain's experience of the employability agenda is one where we can perhaps return the favor. It's this spirit of sharing and exploring wider global education trends that moved me to share some insights into how the employability agenda is influencing behavior among our students and faculty, and in the administration team, too.
It’s clear in Britain that the move to show a return on investment through enhanced employment opportunities – the so-called "graduate premium" – is strongly correlated with the recent significant increase in student fees, or what would be considered tuition in the American context. This was a key part of a public policy shift, across successive UK governments, to recognize more overtly that graduates are beneficiaries of their education and as such should contribute to it directly, in turn reducing the public subsidy for higher education. The fees, covered by a public student loan, are repaid only once the graduate is earning a salary deemed appropriate for a graduate (approximately $35,000) and no payments are needed up-front.
A few things have happened as a consequence. The first, perhaps rather unexpected but of high value, was that we have seen a positive impact on the social inclusion agenda as more students from poorer backgrounds progress to university; analysis from the University and Colleges Acceptance Service (UCAS) indicates that compared with entry rates in 2011, the year before the introduction of higher tuition fees in England, 18-year-olds in disadvantaged areas in England were 12 percent more likely to enter in 2013. The second was, however, anticipated, and is the subject of this commentary, in that students are now much more savvy as education "consumers" and are fiercely attuned to understanding the job opportunities at the end of their degree.
As such, the student voice is being heard right at the heart of university administration and across the faculty. Newly introduced UK websites such as Unistats (similar to the College Scorecard) allow prospective students to directly compare courses and institutions. Of course, when first introduced around two years ago, such public comparison sites were disruptive – and this perhaps echoes the current disquiet in the United States as similar plans are rolled out across the pond. Britain’s "Key Information Set" (KIS) data, which populates the site, comprises the items of information which students have said they would find most useful when making informed choices about where to study. The "empowered" student wants to know what the likelihood is of getting a job after graduation in various fields, what type of job they may get (professional or non-professional), and what salary they could expect. Nationally, total employability and a new measure of professional versus non-professional employment are both used in national university league tables, which are used by students to pick institutions and by the government to award funds.
With this public interest in outcome measures, university presidents and the wider administration are acutely aware of the potential impact on reputation, and by extension, recruitment. There are risks to both if we do not continue to produce graduates who are highly employable, who can obtain graduate-level jobs and who can deliver on the investment they have made in their education through the "graduate premium" on earnings. Placing such key institutional risks to one side, the wider public policy agenda surely means that governments, industry and indeed society at large need to pay attention to employability given the economic and indeed social impact of skilled labor in the global market place. Research consistently shows that graduates are more likely to be employed than those who left education with lower qualifications. In 2013, there were 12 million graduates in Britain and the graduate employment rate stood at 87 percent; this compares to 83 percent employment rate for those with A levels – approximately equivalent to the high school diploma.
But it’s not quite as simple as that. A degree, once considered the passport to a graduate-level career, needs to now come in a total package – "graduate plus" – as employers seek well-rounded employees who are "work-ready" with clear evidence of both job-specific skills and, prized graduate attributes. Given the fact that more people are achieving graduate status, we need to help our students develop employability attributes and skills throughout their time at university while they study. This needs careful curriculum and indeed pedagogic innovation and stewardship, including partnerships with business, industry and the professions.
This is why at my own institution, Plymouth University in Britain, we embed employability throughout the curriculum from day one and we then continue to focus on developing the entrepreneurial skills of our students through academic courses as well as support, mentoring and networking opportunities. For example, curricular experiential learning projects across the university range from business (such as management students conducting consultancy work for local businesses in a program called Inspiring Futures) to health (dental, medical and optometry students are all trained in primary care settings, ensuring they have to develop communication skills with real patients in order to better understand their needs), to the whole institution, such as the Wonder Room consultancy, which brings together students from business, arts and science to pitch for, and undertake, live projects in the region.
We are also focusing on developing internships and placements for our students to enable them to enhance their resumes and gain real work-place experience. Our Plymouth Graduate Internship Program develops graduate-level internship positions with employers where recent graduates are given the opportunity to apply a range of skills, assume real responsibilities, make an impact and progress quickly from new graduate to successful professional. Last year alone, 40 percent of our students embarked on paid industry placements. I shared this fact on social media whilst at a conference in the U.S. earlier this year and was overwhelmed by the impact of the response stateside to something that we see here as very much just "business as usual."
For us, at Plymouth, a key factor in our success has been to establish our unique "students as partners" charter which, rather than a transactional relationship that places the student as a customer, we feel that the we take joint responsibility with our students for their educational outcomes. This means that as well as supporting employment opportunities, whether through internships or placements, we recognize that we are preparing graduates for jobs that don’t even exist yet and for a career that will be multidimensional and more akin to a career portfolio. And so, in line with our focus on enterprise, we foster an entrepreneurial mindset with our students so that they are set up to thrive as socially responsible, highly employable global citizens. Testament to this success has been national success as our students and student societies win major entrepreneurial and business competitions. We are also seeing more of our graduates progress to set up their own business ventures and also to engage in community volunteering work with a social purpose. So, for students, the employability metrics impact their decision-making as they make more informed decisions.
Our faculty have embraced the employability agenda through curriculum and pedagogic innovations and by creating partnerships with employers; this in turn, has served to connect us as a university to the society we serve, leading to research opportunities and live commissions for students and staff consultancy. And for the senior administrative team around the president’s table? Well, that’s an interesting one. Of course, we always had awareness of the demand for our programs, and an interest in student satisfaction – but there’s been a real shift in emphasis and we talk a lot more about the student experience which sits comfortably alongside other top table issues such as financial sustainability and risk. We are now more acutely aware that our brand is firmly aligned to the quality of our graduates and their market value, and that employability metrics are a clear proxy measure of our university standing. So jobs for our students now sit very much as one of our jobs, too.
So, dear American colleagues, if I may be so bold – I would say please embrace employability metrics as a powerful direction of travel. Be aware that public and private supporters of higher education are keenly interested to know more about the returns on their investment and on the role universities are playing now and can go on to play in driving economic and social inclusion. Universities can respond on their own terms in powerful and compelling ways to drive the narrative around employability. We should be clear that employability is very much part of the learning continuum, and learning – well, that is our job, isn’t it?
Wendy Purcell is president of Plymouth University, in Britain.
Florida Governor Rick Scott, a Republican, has signed legislation giving in-state tuition rates to students who graduated from high schools in the state but who lack the legal documentation to reside in the United States, The Miami Herald reported. Some conservatives in the state view the actions of the governor as a reversal of past pledges. But the governor acted as some Republicans urged him to sign the bill. Further, other parts of the legislation will make it more difficulty for most public universities to raise tuition rates (on all Florida students) and the governor plans to cite that part of the bill in his re-election bid.
With the traditional-age college population flattening if not shrinking in many parts of the U.S., colleges and universities are under greater pressure than ever before to develop new and different approaches to attracting students. "Strategies for Recruiting Students" is a collection of Inside Higher Ed articles and essays -- in print-on-demand format -- about some of the approaches institutions are taking, and some of the challenges they are facing. Download the booklet here.
More than half (53 percent) of grandparents are saving for their grandchildren's college costs, or plan to start saving, according to research released Thursday by Fidelity. And 90 percent reported that, if asked, they would be likely to make a financial contribution to their grandchildren's college costs. A majority of grandparents are also talking to both their children and grandchildren about college savings. The national survey was conducted of adults who are at least 45 years old and who have at least one grandchild younger than 18.