tuition assistance helps with lifelong learningTuition assistance is a valued employee benefit, especially with today’s soaring costs for higher education. As an employer, what’s the best and most affordable way to provide it?

Writers, including Forbes’ Susan Adams, praised Starbucks’ recent announcement, “Our partners take care of you. We’re taking care of them.” The message said Starbucks would pay the college tuition for its associates—working at least 20 hours a week—to matriculate at Arizona State University. Employees completing their freshman and sophomore years at ASU Online would receive a major discount, and their junior and senior years would be free.

As Adams wrote in her article, “A Company Education Program That’s Better Than Starbucks’,” Starbucks’ CEO Howard Schultz announced the program along with Education Secretary Arne Duncan and Michael Crow, president of Arizona State University. He even appeared on The Daily Show with Jon Stewart to tout the program.

Read the Fine Print

But then criticisms of Starbucks’ program began to appear. Ned Resnikoff posted an article at MSNBC, “Starbucks free tuition plan comes at a cost,” which notes:

  • ASU Online is a for-profit organization, with a third-party company managing most administrative functions.
  • This tuition program limits associates’ choices to one university.
  • Employees would be expected to attend college full time and also work an average 20-hour week at Starbucks.
  • Students get no money from Starbucks until they’ve paid for 21 credits at $500 each.
  • Sara Goldrick-Rab, professor of educational policy studies and sociology at the University of Wisconsin-Madison, believes participants won’t get a quality education.

Resnikoff observes that recent research suggests online-only classes may leave low-income students at a disadvantage. He cites an article by Shanna Smith Jaggars, assistant director of the Community College Research Center.

And, says Goldrick-Rab in Resnikoff’s article, low-income people are precisely those most likely to enroll in ASU Online through the Starbucks program.

A Better Way

Another company, Hartford, CT-based aerospace and defense firm United Technologies (UTC), has offered tuition assistance for almost 20 years.

“Since 1996 UTC has had what it calls the Employee Scholar Program, which is much more flexible and also more generous than Starbucks’,” Adams writes.

UTC reports 35,000 of its 212,000 global employees have earned degrees from associate’s in accounting to bachelor’s in engineering to MBAs.

Adams quotes the company’s senior vice president of HR, Elizabeth Amato:

“We wanted to make sure we had the best-educated workforce in the world. The program helps us attract, develop and retain employees…. It’s a great engagement tool.”

Here’s how the program works. UTC:

  • Pays tuition, plus books and fees.
  • Makes payments directly to schools up front.
  • Allows employees to attend any accredited school around the world—in classrooms or online.
  • Gives workers 3 hours of paid time off a week if they’re taking 2 courses and 1.5 hours for 1 course.

According to Amato, employees who participate are 20% more likely to stay with UTC and twice as likely to get promoted.

Starbucks’ program does provide value. 

“We aren’t competitors,” says UTC’s Amato. “The fact that they’re doing this, I think, is good for corporate America and good for employees and good for our educational system.” 

Adams’ take?

“I agree, but I wanted to set the record straight about what Starbucks is doing and highlight a longtime program that deserves attention.”

In the end, any tuition assistance program helps attract, engage, and retain your best employees, but as shown with Starbucks, think carefully about how you structure the program.

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