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June 25, 2014 11:00 AM The Starbucks Bait and Switch

By Daniel Luzer

Readers have no doubt heard a great deal about the Starbucks Free College Plan at this point. If you’re bored with it, go ahead and stop reading. I totally understand. But there’s one element of this deal that’s still worth mentioning: the plan is less generous than what Starbucks used to provide to its employees.

I rather like Starbucks. One of my guilty pleasures as a city-dwelling adult is that store. There are worse things to spend money, on but it’s something I don’t really need and it’s got a suburban tameness about it that’s really pretty lame. But, despite the opinions of many coffee snobs, I rather like the way it tastes, plus their employees get health care.

It looked for a minute to me that they were soon to get more benefits, too.

On June 16 the corporation announced that, according to a piece in the Arizona Republic:

Starbucks employees nationwide will be eligible for a free college education through Arizona State University’s online program beginning this fall.
The new initiative, touted as the first of its kind, will allow many of Starbucks’ 135,000 workers to graduate debt free from ASU with no requirement to repay or stay on with the company. The funding will come from a partnership between ASU and Starbucks.

May critics appeared pretty happy about this, too. As Mark Rogowsky wrote at Forbes “Starbucks is offering a new benefit to its employees starting today that’s fairly extraordinary in the retail world.” This was potentially awesome because, “It will help them get a college degree that most will then use to find a job that isn’t at Starbucks.”

This is, technically, accurate. As a result of the new policy all Starbucks employees have the potential to teach a bachelor’s degree, absolutely free, while slinging coffee for people like me. Yes, it’s an online degree, but it’s from a real school, and it was certainly not so bad.

Starbucks

Except that the online ASU Starbucks degree turns out to be less generous than the earlier Starbucks employee policy, under which an employee could get as much as $1,000 a year in tuition assistance

In theory, someone who was a Starbucks employee working at one of the store’s Phoenix branches and attending ASU on a part-time basis could also have attended the school almost for free. That’s doesn’t seem to be true anymore: the only education benefits are through ASU’s online program

What’s more, it turns out Starbucks isn’t paying a cent for this new idea. Under the plan, according to an Associated Press article: “Arizona State University president Michael Crow told the Chronicle of Higher Education that Starbucks is not contributing any money toward the scholarship. Instead, Arizona State will essentially charge workers less than the sticker price for online tuition.”

The deal will ensure a steady stream of new students for the school, but Arizona State is paying all of the costs.

ASU and, well, us. Because of federal student aid, the way this venture works is because Starbucks employees are so poorly paid they’ll quality for extensive federal grants and loans available to low-income Americans. (Granted, this was also true of the earlier Starbucks tuition reimbursement policy.)

This isn’t an awful thing, for sure. People who work at Peet’s Coffee or Dunkin’ Donuts have no such ability to each a free bachelor’s degree from any school. Many Starbucks employees might well turn out better as a result of the new policy. But it’s not really much of a commitment on the part of the company, which earned $426.90 million last quarter. It’s really more a PR tactic.

What’s more, because under the earlier policy Starbucks provided real money to help employees earn college credits at a school of their choice, it looks like the company might be saving money under this new plan.

It’s unlikely those cost savings will translate to higher wages. [Image via]

Daniel Luzer is the news editor at Governing Magazine and former web editor of the Washington Monthly. Find him on Twitter: @Daniel_Luzer

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