Starbucks CEO Howard Schultz has decided “not to be a bystander” on the urgent problem of rising college costs
My friend Howard Schultz is at it again. He's used his platform as the chief executive of Starbucks to take on socio-political issues before, including unemployment, guns and support for combat veterans.
Now he's leading by example on the rising cost of a college education. He announced tonight that Starbucks will be funding the completion of college degrees for Starbucks employees, in partnership with Arizona State University.
This is a serious offer, a serious move by a major company with more than 100,000 employees. “Partners,” as they're called, with two years of college in them will be able to complete their degrees online at ASU while maintaining their jobs.
According to the press release: “This significant investment will create an opportunity for eligible partners to finish a bachelor's degree with full tuition reimbursement for juniors and seniors, through a unique collaboration with ASU's research-driven, top-ranked degree program, delivered online.”
It's typical of Howard to make a bold move that puts his company's resources behind his desire to impact a social problem. Why? It's good business, no doubt. Starbucks investing in the long-term education of its baristas will surely pay off in both loyalty to the company and in training a new generation of human assets.
But Howard doesn't usually operate off a spread sheet. I suspect he has heard from one too many baristas who told him that they were forced to drop out of college, and figured out that the future of his company rests on the shoulders of these partners.
The problem nationwide is big enough that the New York Times recently calculated a sobering ripple effect of $1.2 trillion in student loan debt on the economy over the coming decades. It means a generation who will defer buying homes, who live with their parents and broadly speaking will place a further damper on our already-sluggish economy by what ought to be the upwardly mobile segment of our society.
I experience the issue at TheWrap, where as a growing company we continue to hire the brightest young talent a few years out of college. But many on our staff are squeezed to the breaking point by the college loans they are forced to repay. Bankruptcy is not an option, and they have no flexibility in their repayment scheme. Sometimes when they receive raises it places them in an elevated category for repayment. One confided in me that a $5,000 salary raise amounted to a net reduction in pay because it placed him in a higher payback threshold.
And as a parent of two college age kids, with a third about to embark on the application process, it is impossible not to notice the rising cost of higher education – 80 percent in the past decade. One cannot help but wonder where the breaking point is for educating your kids, and we are already seeing the results in reduced graduation rates in the generation currently enrolled in college.
Also read: Howard Schultz, and a Lesson in Leadership
“We can't be a bystander. And we can't wait for Washington,” Howard Schultz says in the new video that posted on Sunday night, accompanied by the reactions of Starbucks employees as they learn that their employer will fund the completion of their education.
Howard often says that: We can't wait for Washington. And the thing is, he never does wait for Washington, believing that corporate leaders in America hold the power and moral responsibility to bring positive change to our country.
Check out the video above. And here's hoping that Starbucks’ policy is contagious.