MONEY college costs

Starbucks Steps In to Pay for College — Because the States Are Stepping Out

Are programs like this a serious answer to college affordability?

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Today Starbucks and Arizona State University announced that the coffee shop chain will help its baristas pay for online courses at ASU. It looks like an attractive deal for Starbucks employees in a position to take advantage of it. The company will cover the cost, after other aid, for junior- and senior-year courses of anyone working 20 hours per week. Getting to junior year will be a bit trickier: For freshmen and sophomores, students will be eligible for smaller scholarships to help cover ASU’s online tuition. Many Starbucks employees are likely eligible for Federal Pell grants to help cover the rest.

It’s worth stepping back, though, to look at the big picture of college funding in the United States. Especially in the years since the financial crisis, public universities are relying less and less on state funding, and more on student tuition. In other words, they are becoming less public.

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SOURCE: State Higher Education Executive Officer Association

Although there’s plenty of debate about whether colleges are doing enough to control costs—especially on administrative salaries—much of this shift seem to be driven by a drop of in per-student aid from states.

ASU has kept in-state tuition lower than many other public schools around the country. The Arizona Republic reports that the online program is part of how they’ve done that: Online courses make money for the school. That’s because the courses are comparatively cheap to run, while tuition (both in-state and out-of-state) is about the same as what traditional resident students pay.

So are programs like Starbucks’ an answer to college affordability? It may work for some, but there’s evidence that online programs are a poor fit for many students, as Kim Clark reported in MONEY in 2013:

Researchers at Columbia University have found that community college online students got lower grades and dropped out more often than those in regular classes.

“If we know community college students don’t do as well in online education, does it really make sense to be funneling [more] students into online classes?” asks Shanna Smith Jaggars, one of the Columbia researchers.

Jaggars says younger and struggling students are the least suited to online classes; they need the structure and time-management discipline of a classroom.

By targeting its most generous funding on juniors and seniors, the program is betting on students who already have a college track record and thus a better chance of succeeding online. It will be a big test of the much-hyped online model to see how many Starbucks employees actually graduate with an ASU degree.

This story has been corrected to reflect new information about details of the the Starbucks/ASU plan.

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