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Starbucks Updates College Achievement Plan

ACCN Blog Last Monday – April 6, 2015–Starbucks announced updates to their College Achievement Plan (CAP), which provides tuition reimbursement to employees admitted to Arizona State University’s online degree program. For employees of corporate-owned Starbucks (about 60 percent of U.S. stores) who work 20 or more hours per week, CAP reimburses the out-of-pocket costs of tuition to ASU Online after all other types of financial aid have been applied. Participating employees also receive a tuition discount, funded by ASU, equivalent to about a 42 percent reduction in tuition costs. The program was launched in June of 2014, and currently enrolls about 2,000 Starbucks employees.

The key changes to the plan are described below.

Updates to CAP:

  • Reimbursement Timeline Sped Up
    • Old Plan: Participants were reimbursed (via a direct addition to their Starbucks paycheck) after completing 21 credit hours. With the average class clocking in at three credit hours, employees would need to wait several months–and in some cases more than a year–for reimbursement.
    • New Plan: Participants are reimbursed in the same manner, but reimbursements are issued at the conclusion of each semester.
    • Impact of the change: This is widely regarded as a significant improvement. Adult students in particular often need to take courses on a part-time basis given work and family obligations, and paying for 21 credits prior to reimbursement could impose prohibitive up-front costs to potential participants. While Starbucks representatives note that the reimbursement structure is designed to incentivize completion, research from the Council for Adult and Experiential Learning (CAEL) suggests that programs which offer up-front tuition assistance generate greater take up among employees. Nonetheless, a more frequent reimbursement schedule, especially one which does not penalize part-time students, is certainly a step in the right direction.
  • Eligibility Requirement Relaxed
    • Old Plan: Full tuition coverage for out-of-pocket costs was available only to those who entered the program as juniors or seniors. Thos entering with fewer than 56 credits were eligible for the tuition discount – but not reimbursement for the remaining tuition costs.
    • New Plan: All participants are eligible for the full benefit, regardless of the number of credits with which they enter.
    • Impact of the change: In addition to extending the full benefits of CAP to first-time students, this is likely also an important change for adults with prior college credits and no degree. According to data from the National Student Clearinghouse, only 12.4 percent of the nation’s “some college no degree” population has two or more years of postsecondary progress (or the approximate amount needed to accrue 56 transfer-worthy credits at ASU). For any Starbucks employees that fall outside this 12.4 percent, this should be a very welcome change to the program.

These two plan modifications have the potential to positively impact the program, in terms of both enrollment and persistence. This early modification to the plan (less than a year in) suggests a promising willingness to incorporate feedback and evolve the program accordingly – a commitment to adaptability that will no doubt be critical as Starbucks pursues its ambitious goal of producing 25,000 graduates by 2025. We look forward to seeing the impact this employer incentive/university partnership combination may have on degree completion for working adults, and the lessons learned along the way.

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