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
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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.
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.
My earliest memories are of looking out from the campanile at the University of California at Berkeley below and the blue sky that surrounded the entire San Francisco Bay Area. Sproul Plaza and bongo drums, Telegraph Avenue and the Hare Krishna, Cody’s Books, Kip’s and Top Dog. These early memories were the result of the dreams and aspirations my parents had at the time.
Cal Berkeley had been the beacon of higher education that first brought my parents to this country in the early 1960s. Both my maternal and paternal grandfathers had been unable to obtain college educations in Mexico, in part because of tradition and also due to the limitations at the time. But both of them were self-taught and made sure that their children attended local universities. My father had older siblings who had completed college by the time he came to the United States. My mother was the first to attend college in her family.
Back then the California dream came in three parts. We had the community colleges that served as the entryway for those who were not ready for a four-year university. There was the Cal State system that served as primarily master’s-level and undergraduate teaching institutions. Then there was the University of California.
Shortly after my parents arrived in California, they enrolled at the local community college. From there they transferred to Berkeley and eventually went on to obtain graduate degrees. My mother received her M.A. in comparative literature and my father eventually received a Ph.D. in the same field.
When the time to apply for college came, I had only two places in mind: Cal and Harvard. I heard early from Cal and was rejected from Harvard. So my choice was clear. In my mind, Cal was the place for me. It was home. But Cal was tough. I remember sitting in my Intro to Chem class with the other 750 students as we watched our professor on TVs that stood above us. Even though the classes were huge, faculty always taught them. And as we moved into upper-division courses these classes grew smaller and smaller to the point of eventually being able to ask our professors questions in groups as small as 50.
My wife, who was the first to go to college in her family, had followed a track to the one my parents used. She heard of college for the first time when she was in high school. When she finished high school, she enrolled at a local community college and transferred to UC Santa Cruz. Eventually, she ended up earning an M.A. in counseling psychology.
My daughter’s experience extended our UC experience even further. She was born in La Jolla just before I defended my Ph.D. dissertation at UC San Diego. Her earliest memories are of UC Santa Barbara, where I had my first job and she used to play with chickens at the Orfalea Children’s Center. She had visited Cal with us numerous times and ventured just south to the forest that surrounded UC Santa Cruz, my wife’s alma mater. Her early memories had spread beyond the campanile to encompass many more campuses.
When we first moved to Houston 10 years ago, the UC system was still embedded into the household fabric. One day my daughter came home and asked me whether we were Aggies or Longhorns. I quickly replied that we were Golden Bears and Banana Slugs. The next day she came back unsatisfied with my answer and asked again. It was a forced-choice question and so I chose Longhorns. UT was the Cal of Texas so it made sense.
But things have changed in the 30 or so years since my wife and I applied to college. My daughter received hundreds of brochures and emails from universities across the country, some of which I never knew existed. The list under consideration expanded to 11, including UT Austin and the University of Houston, but also some private and some Ivy League institutions.
Decision day arrived in three waves. First came UT and Houston, which were automatic due purely to her class rank. Then there was UCLA, a place made dear to my heart much later in life, when my father Guillermo Hernandez became a professor there. The final wave brought us good news: acceptance into Duke University, Davidson College and the University of Pennsylvania. All were excellent institutions with great reputations. But it also brought bad news: rejection from Cal.
My daughter and I visited all of the east coast schools where she had been accepted. Penn reminded me of home. It shared a strong commitment to diversity. Like Cal, it sat on the edge of a city with the inner city not far away. It even carries the name of the state and can be named with a single syllable. And like Cal, the multicultural way of life I had experienced during my childhood in California had penetrated its Ivy walls. You can eat Tortas at Penn and any other type of ethnic food you can dream up. But it is still private. Classes are smaller. The surroundings are beautiful and there is Ben sitting on campus. It was clear to me that her experiences would be radically different than the ones my parents, my wife and I had experienced in college.
My daughter’s decision came swiftly. She left the Golden Bears and Banana Slugs behind. She bypassed the Longhorns and Cougars completely. She has taken her experience of living in the most diverse city of the country with her. Along the way she will create a new identity, a native Californian Latina from Houston who will soon be a Penn student, something I never imagined was possible from the top of the campanile all those years ago.
But what of my California dream that had given all of us this opportunity? Is it dead? Over 70,000 applied to Cal and over 85,000 applied to UCLA this year. The acceptance rate has dropped at both places. The campuses are packed and more and more Californians are leaving the golden state to attend college in other places. This trend has reverberated across the entire county a topic of concern that the dean of admissions at Penn, Eric J. Furda, discussed with me during Quaker days.
The irony of it all was that my entire family was educated at what is arguably the best public university system in the world. My daughter could have followed in our footsteps. She was offered admission to UCLA but no financial aid. In other words, the entire out-of-state cost approximating that of private colleges was to be handled by us. A similar situation occurred at UT. Because Ivy League universities award grants and have a no-loans policy, Penn ended up costing a bit more than UT and much less than UCLA.
The story of our family is not unique. According to a recent book from Suzanne Mettler at Cornell University, college education may actually be reducing the opportunity to create a more level playing field. The ability both economically and socially to climb the academic ladder is becoming more and more restricted. This reality is difficult to reconcile for someone who grew up in the public university system and teaches at one as well. The American higher educational system has opened up doors for my family. I feel incredibly fortunate to have a daughter who will attend an Ivy League university.
However, I cannot help but wonder what the future of public university education holds for those who aspire to climb the academic ladder the way that my family has.
Arturo E. Hernandez is professor of psychology and director of the developmental cognitive neuroscience graduate program at the University of Houston.