STARBUCKS’ SCHOLARSHIP – What’s the Deal?

by Willette Coleman ©2014

In early June 2014, the major coffee and coffee beans merchant, Starbucks, boasting 23,187 stores in 64 countries according to StatisticBrain.com’s, announced that it was offering “an upfront scholarship” to its workers through Arizona State University (ASU).  When I heard the news report, like a lot of people, I cheered.  Thinking that a portion of my occasional coffee purchases was going to a worthy purpose, gave me a fuzzy feeling.  (Actually, when I can, I prefer getting my caffeine “hit” from socially conscious companies that serve 100% fair trade certified organic coffee.  Only 8.4% of Starbucks’ coffee meets that standard, according to their “responsibility” website.) 

Anyway, the scholarship appeared to be setting a unique precedent among corporations for low-wage workers.  But, as with most “too good to be true” situations in life, there are “fine print” hiccups.  “Critics warn that details of the new Starbucks College Achievement Plan (SCAP) indicate it may not be a real improvement for the 15,000 to 20,000 workers the school expects to enroll,” wrote Alan Pyke on thinkpress.org.  This “inside deal” may not serve Starbucks employees’ needs, Dr. Siva Vaidhyanathan, the Robertson Professor of Media Studies at the University of Virginia and a commentator on online education models, told Pyke. 

After reading Pyke's and other reports, I began to wonder, "What's the deal?"  For one thing, the operative word here is “scholarship,” which, by definition is “An award [relief] of financial aid for a student to further his or her education,” whether it be a “grant, award, endowment, payment,” etc.  Starbucks is NOT contributing any money toward the “scholarship” ASU’s president, Michael Crow, told the Chronicle of Higher Education, following the public relations fan fair.   Instead, the program, described as "an investment," allows Starbucks workers to earn an online degree at a “steeply discounted rate.”  ASU’s online tuition ranges from $482 to $543 per credit. And, what, exactly, is “steeply”?  When department stores give customers a discount, can we call it a scholarship?    

Next, consider the restrictions.  Employees are locked into pursuing  a degree at only “one specific university, only online, only if you enroll full time and work at least 20 hours a week,” professor of educational policy studies and sociology at the University of Wisconsin, Dr. Sara Goldrick-Rab, said in an email to Pyke.  Starbucks’ existing, less restrictive program, launched in October 2011, at City University of Seattle and Strayer University and offers employees up to $1,000 a year, will be phased out by 2015. 

The online restriction causes some concern since studies show that "low income adults who work full-time tend to do worse online and better in person,” Vaidhyanathan added.  While ASU has been acknowledged as being among the best online degree education institutions, some questions are:  How successful has it been for low wage workers?  How many of their students are and graduates were low income adults?  What has been the graduation ratio for low income students?  How well are these graduates doing, since earning a degree from ASU?  Goldrick-Rab said that, “The fit with the needs of employees here is weak.  They are less likely to benefit from online education and a supportive company would allow them to attend the local public college of their choosing in person.”  Furthermore, many low wage employees can’t afford a computer and Internet service, and access to local libraries may pose transportation and/or timeframe issues.

Most of Starbucks front-line workers earn minimum wage, so they’ll need to apply for federal aid, such as Pell grants and/or loans.  The barrister serving your Frappuccino or Teavana Shakened Ice Tea average salary is $8.80 per hour according to glassdoor.com www.glassdoor.com/Salary/Starbucks-Salaries-E2202.htm.  A Starbucks spokeswoman, Laurel Harper, told Pyke that its analysis with ASU found most of its workers would qualify for federal Pell grants.  To receive MAXIMUM federal aid, candidates must enroll in school FULL-TIME.  According to a study by the Greater Washington National Urban League, “62% of Black students receive Pell Grants, which only covers 31% of the average cost of tuition, fees, books, supplies, expenses, and transportation.”  A survey by AP-NORIC Center for PublicAffairs Research concluded that “Only 18 percent [of low wage workers] have used Pell grants….”   

Freshman and sophomore employees, after factoring in the ASU discount (whatever that is) and the federal aid amount, would pay any remaining costs.  Junior and senior year students, after completing 21 credits, would get reimbursed out-of-pocket expenses by Starbucks.  “Many corporations in America have public tuition assistance plans that vary in value and utility for their employees,” Vaidhyanathan told Pyke.  “This,” he said, “is nothing particularly revolutionary, except that it’s an inside deal with one particularly aggressive institution.”    

No doubt, any assistance for furthering one's education is valuable, and some employees will certainly benefit from SCAP (one advantage is that after earning an undergraduate degree, workers will NOT be required to stay with Starbucks), but, after investigating its “scholarship deal,” my initial exuberant fagizzle has waned to a drizzle. 

Magic, Miracles & Blessings,

Willette