Is Tuition Reimbursement the Way to Attract Students?

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You’ve heard of Google’s nap pods, bicycles, and on-site laundry facilities. Perhaps, like us, you’ve also longingly scrolled through slideshows of Airbnb’s gorgeous office (complete with fully furnished apartments that replicate their most popular listings). And maybe you’ve even installed an Xbox in your break room. But there’s one type of perk that might really make a major difference to millennial job-seekers, and it’s not any of the cool stuff I’ve just mentioned.

Paying for your employees’ tuition could be a way to attract bright, ambitious—and potentially loyal—talent to your organization.

The CEO and Chairman of Starbucks, Howard Schultz, recently announced that Starbucks will be paying the full tuition for two years’ worth of online schooling at Arizona State University for any employee who works a minimum of 20 hours a week (and can gain acceptance into Arizona State University).

It turns out that Starbucks is not the only company to offer tuition support or reimbursement (though it is one of the most generous in its offering). BuzzFeed published a list of nine companies that offer some type benefit to cover college or grad school costs, including big name employers like Google and Apple.

Most of the companies put some type of restriction on this benefit, whether it’s the type of degree, the ability to directly tie the degree into an employee’s work, or the requirement to stay at the company for a certain amount of time after completing the degree. But in the case of Starbucks, employees are almost expected to leave the company after completing their degree. Schultz told The Chronicle of Higher Education that there will be no strings attached to the Starbucks College Achievement Plan.

Sounds like a pretty sweet deal, right? But do tuition benefits actually appeal to millennials—and could they be a way for you to attract more students to your company?

We just happen to have a few recent grads at our office, so I asked them to weigh in on the Starbucks program specifically and whether the idea of tuition reimbursement would influence their decision to accept an offer. Here’s what they had to say.

“I can understand Starbucks’s decision to team with Arizona State University and pay for students’ degrees. I think it works well in students’ and Starbucks’s favors since the students can work part-time while having enough time for their full-time studies, and then stop working once they graduate. If an employer offered to pay for part of my grad school, that would indeed influence my decision to work there, but not too much. To me, how enjoyable the work is is always more important than the monetary benefits and perks, so, a job as a barista at Starbucks, which I don’t have much interest in, would most likely not be worth it for me to work 20 hours a week in exchange for half of grad school. Although the financial aspect of the deal is initially appealing, I would be unhappy putting a chunk of my time in a menial job that was unrelated to my field of study.

If my field of study were different than it currently is [Computer Science], then I can see the Starbucks-Arizona State University deal as very helpful. However, for certain majors, working at Starbucks during the time it pays for tuition may prevent opportunities for internships or even other part-time jobs that may be instrumental in landing the full-time position pertaining to the major upon graduation. That is what repels me from this program.”

–Simon Luppescu, Computer Science Major, Class of 2013

“I think that if I did not already have a degree that it would influence my decision to work there in a positive way if the school was one that I wanted to attend. I think it’s nice to have access to develop your skills, with either going back to get another undergraduate degree or a graduate degree if that was something that I wanted to pursue.”

–Jessica Moore, Brain and Cognitive Science and Linguistics Major, Class of 2013

I think what Starbucks (and some other companies) are doing is amazing. We’ve read quite a few articles that argue about whether college is worth it because the costs are so insane but the difference in pay between someone who graduated with a college degree and someone who didn’t is also huge. [Editor’s note: See “Is College Worth It? Clearly, New Data Say” in The New York Times for a detailed examination of this issue.]

It seems totally unfair to force someone (especially so young) to make that choice. I know that one of my friends worked as a barista and ended up dropping out of college up here in San Francisco because she couldn’t afford it + the cost of living any longer.

You shouldn’t have to choose between debt or a lifetime of lower overall pay. This is a great way to get past that. I also really appreciate the CEO’s view on the matter. He knows that by providing this service he is allowing (perhaps even encouraging) his employees to move on from his company. That’s fine. He knows he’s just a part of their life cycle, but also that it won’t hurt his company. I’m sure there will never be a shortage of Starbucks employees especially now that there’s this benefit.”

–Kellen McKillop, Creative Writing Major, Class of 2012

If an employer paid for me to go to grad school, I would definitely feel more inclined to continue working there once I completed my degree. While I would probably benefit greatly from their generosity, it also seems like a bit of a mental game. I’d probably stick around for at least another year (or however long it would take for me to feel like they got something out of it on their end), even if it wasn’t required of me. I would feel indebted to them for the opportunity, and therefore would only take them up on the offer if I really enjoyed working there.

Or if they’re a terrible employer but are still offering this benefit, milk them for it. Take it all in bloody vengeance and then run far, far away.”

–Shane Zackery, Media Economics Major, Class of 2014

“I think that this is a good idea by Starbucks. I have multiple friends who did not attend college and went straight into the workforce because they felt like going to college would not be worth the price. Although this program is an online only program from ASU, the benefits of having a degree on your résumé are hard to replicate. This program also doesn’t chain one down to working at Starbucks forever and doesn’t even require the students to pay Starbucks back. I believe that this will attract more valuable job applicants who are looking to advance their career rather than just people using Starbucks as a part-time job.

For me, I think that if an employer was offering to pay for grad school it would no doubt have an impact on my decision to work there. As a recent graduate who is soon to start paying back student loans, any form of financial relief will help.”

–Austin Pomerantz, Business Major, Class of 2013

As you can see, there’s no absolute consensus here. In this (admittedly small) sample size, we see some recent grads who are strongly interested and attracted by the idea of tuition reimbursement, and others who don’t feel it’d be worthwhile, at least for the Starbucks College Achievement Plan.

Does your company already offer some sort of college support or tuition reimbursement? If so, how do you measure its participation and effect on attrition rates?

What do you think a company’s responsibility is for supporting its employees’ ongoing education? Let us know in the comments section below!

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2 Responses to “Is Tuition Reimbursement the Way to Attract Students?”

  1. Naomi @ Rising Net Worth

    Excellent article! It’s very generous of Starbucks to offer this type of education perks for its employees. This is definitely something I would have possibly considered if it was available during my undergrad studies. Kudos to Starbucks for blazing this trail!!

    Reply
    • Melissa Suzuno

      Thanks, Naomi! It’s interesting to hear how this type of benefit appeals (or doesn’t appeal) to different people! Do you have any other thoughts on the benefits/perks that are best for attracting recent grads?

      Reply

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