The Starbucks model for tuition reimbursement

The percentage of Americans who have a two-year or four-year college degree is now 39.4 percent — the highest in the nation’s history, but a far cry from where the nation needs to be given the increasing global demand for people with postsecondary education credentials.  Indeed, the U.S. now ranks 11^th in the world in postsecondary attainment, with countries like Korea, Canada and Japan experiencing rates well above 50 percent.  The dynamic global economy is fueling an ever-increasing demand for skills and talent, and most countries around the world are responding to this demand by increasing the higher education attainment of their people.  

In the U.S., there have been modest but steady increases in enrollment.  Yet only about half all students actually complete their studies.  One in five U.S. adults has some college credits but never obtained a degree.  

{mosads}For too many, life — whether family obligations, job pressures or their personal financial circumstances – gets in the way. According to a 2009 Public Agenda study, 31 percent of 22- to 30-year-old college dropouts said they dropped out because they could no longer afford it.

This is particularly true for the large numbers of low-income, minority teenagers, who make up the nation’s fastest growing population groups — and therefore its richest pool of future talent.

Government has an important role to play in increasing the nation’s supply of talent.  But so, too, does the private sector.  Tuition reimbursement is one mechanism for employers to do their part, and is fairly common at large corporations. Employers from Apple to WalMart now offer some form of tuition aid for employees, in differing amounts. But focusing on a group that has already demonstrated the desire to attain a college education and the advances it can offer might prove particularly successful.

One corporation has now devised a plan that focuses on workers who have started a college degree at some point, but never finished. And this could offer a template that other businesses might follow.

Starbucks recently announced that it will cover full tuition in 40 different programs for employees studying at Arizona State University, whose online degree program is ranked in the top 10 by US News and World Report.  This new program offers counseling and coaching support, to help students navigate through the learning process.  

Employees also don’t have to pay Starbucks back if they leave.

Strategies like the one being launched by Starbucks acknowledge that demand for talent is rising rapidly across the nation. Projections by the Georgetown Center on Education and the Workforce indicate that two-thirds of all jobs in the United States will require postsecondary degrees or certificates by the end of this decade.

This growing demand for high-quality talent is evident in the widening wage gap. Those with a college degree earn more than 80 percent more than those with just a high school credential. And this divide has continued to grow for some time—even during the 2008-2010 recession—and has accelerated in recent years.

Millions of Americans recognize this, as indicated by the fact that enrollment in higher education institutions continues to rise.  Yet with so many of those failing to complete, the dream of a better life resulting from a college education is still just that—a dream.

The Starbucks program will not change the world on its own. Even if a quarter of all Starbucks employees take advantage of the program, it means about 30,000 to 40,000 people will benefit. That’s a start, but it’s a far cry from the nearly 14 million more degrees that Lumina Foundation has estimated will need to be produced nationally to meet future workforce needs.

That’s why all employers must invest in talent development to meet their own needs, to respond to the needs of the communities where they operate, and to contribute to national goals.  Starbucks is doing just that with its completion-focused the College Achievement Plan. But employers of all sizes and types must follow suit. Their combined efforts will have a measurable impact on millions of workers, and thereby on the nation’s collective well-being.

Merisotis is president and CEO of Lumina Foundation.