Will $3 Coffee Kill $50,000 Tuitions?

An item in yesterday's newspaper could have real long term significance for institutions like the one at which I work. The story was about Starbucks beginning to offer to pay college tuition for its employees. When I read the headline I was genuinely startled ("Starbucks to Provide Free College Tuition"). But then I read the fine print and found myself saying "oh, for some particular online degree at Arizona State, big deal, seems like a bit of bait and switch."

But then I thought about it a little and noticed the numbers: 135,000 employees and around $500 per credit.  And then I read Joe Nocera's opinion piece.  Now, critics have already pointed out problems with the program (16 June), but the Lumina Foundation representative quoted in the first article had it right: Starbucks is just the first company to do this and the programs will evolve. There's a gigantic population in the US who basically cannot afford to go to college, period. And the jobs available to them without a college education are AT BEST jobs like Starbucks and Best Buy and on and on. If just a few of these companies go down this path, it could quickly become an important way to recruit and retain low wage, high aspiration workers and educational benefits like this will come to define the standard (both price and process) for a growing section of the higher education market.

And places like Arizona State's online degree program are going to capture that market share. And a whole bunch of people and families that are assuming unholy amounts of debt to get a college education are going to start asking why they are paying around a thousand dollars per credit if it's out there for half that.

It will be interesting to see how this unfolds, but it may well be that the company that convinced a world used to paying 50 cents for coffee served immediately to pay, instead, 3 dollars for a coffee they have to wait for, will convince a country full of aspiring young people NOT to consider paying 100-200 thousand dollars for an education.

This confirms a number I have arrived at by other means: unless we can figure out how to increase our productivity by about 100% (translating in practice into halving out price), we will be consigned to the proverbial dustbin of history. I think it can be done without replacing in-person education with all online degrees, but unless those of us in the in-person business start to get really serious about innovation, the only work left for us will be either producing online courses or tutoring kids who are enrolled in them.

Sources

• Joe Nocera "A New College Model: Arizona State Matches Starbucks in Its Trailblazing Ways." NYT  June15, 2014
• starbucks.com  Starbucks College Achievement Plan.
• Richard Pérez-Peña "Starbucks to Provide Free College Education to Thousands of Workers." NYT June 15, 2014
• Richard Pérez-Peña "Critics Point to Drawbacks in Starbucks Tuition Program." NYT June 16, 2014