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Starbucks Gives Employees a Private Sector College Boost

June 23, 2014 J,

By Eric Peterson

Earlier this month, President Obama signed an expansion to the Pay As You Go Program, which uses the heavy hand of government to “cap” student loan payments to 10 percent of the recipient’s disposable income and forgives all debt if they choose to get a job working for our bloated and ever-expanding government.  And as usual, this new “plan” leaves taxpayers are on the hook for yet another costly government program.  This week however, private enterprise is showing an alternative way forward on the question of paying for college — one that doesn’t include another Obamacare style government overreach, new layers of bureaucracy, or reach further into the cash-strapped pockets of taxpayers.

Partnering with Arizona State University, Starbucks has announced that the company will cover partial tuition costs for all employees who work at least 20 hours in the cafes, corporate offices and roasting plants.  The courses will be offered online through Arizona’s online bachelor program and cover 40 areas of study.  In addition, taking advantage of the program will in no way bind employees to stay with Starbucks after they’ve obtained a degree.  It’s a bold step by the pioneering company (which has offered employee health benefits since the late 1980’s), and one that will help Starbucks improve the quality of its workers and applicants.

More importantly, however, Starbucks foray into the student aid business may signal a new era in higher education, how it is financed, and what it means to be a student.  Many have already questioned the traditional brick and mortar model of college education with average student debt at $23,000 and 50 percent of college graduates unemployed or underemployed.  The “Starbucks model” provides affordable online education and valuable work experience which has been placed as a premium by employers.    With more than 70 percent of Starbuck’s 135,000 employees currently attending or wanting to attend college it is estimated 15,000 to 20,000 employees per year will take advantage of this program. It’s a model provides a road map for future employers to partner with universities to educate students – and in so doing add value to their employees – in a new and efficient way.

Taxpayers (those who drink coffee and those who don’t) should also be excited about Starbucks’ announcement because it is primarily funded by private enterprise – not through America’s costly and debt-laden student loan program.  Using accurate accounting methods, current government-run student loan programs will cost taxpayers a whopping $88 billion over the next decade – and it shows no signs of slowing down.  Worse, total student loan already totals close to $1 trillion. Rather than asking taxpayers to foot the ever increasing tuition costs students, employers and universities have found a mutually beneficial agreement to fund America’s education.

Once again, as it has for centuries, private enterprise is spurring innovation and providing services more efficiently and in a more cost effective manner than America’s hapless federal bureaucracy.  And that’s not surprising.

So next time you are handed your morning latte by a friendly neighborhood barista, know that you might be helping to fund their education, and that you’re rewarding their decision to work their way through college instead of banking on taxpayers to sign their tuition check. That is truly a win-win – one we can all drink to.

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