Arizona State University President Michael Crow hopes his tuition-discount deal with Starbucks boosts online enrollment by 15,000 students, toward a goal of 100,000.
Just fewer than 10,000 were enrolled for the fall 2013 semester, with about two-thirds of those undergraduate, and another third graduate students.
The free advertising ASU and Starbucks has been getting over the partnership announced this week could pay off in a big way.
ASU's online degree programs go for about $500 a credit hour. An online bachelor's degree takes about 120 credit hours, for a cool $60,000 if you do it within the program from start to finish.
Starbucks says its employees will take advantage of a special discount by ASU to lower that from $30,000 in the first two years to $17,000. Many of its employees qualify for various federal grants and loans to cover that difference; if not, they pay out of their own pocket. Starbucks begins to kick in its own money only when the students are in their third and fourth year of the degree program. The company said it might pay up to 58 percent of a student's tuition in the junior and senior years -- less if the student was receiving grants.
Most students won't take all 120 credit hours at ASU, and many won't finish. (We're waiting on some retention figures from ASU's public information office.) Perhaps far fewer than 15,000 Starbucks employees will take part in the deal, which requires them to pay for their first two years of college, albeit at a discounted rate thanks to ASU's generosity. But ASU should make out okay.
The real boost may be in the publicity this generates for ASU's online program, which could possibly move Crow toward his larger goal. The story was trending heavily online this week, and Starbucks will continue to plug ASU throughout their partnership, no doubt.
For every 17,000 online students paying $60,000 for a degree, the university makes about a billion dollars, with the low-side estimate of $500 a credit hour. Perhaps it will take Crow's planned 100,000 online students enrolled to reach that figure, though, due to dropouts and folks taking basic classes at cheaper colleges. Even a few hundred million from the online program would be great for ASU, given the low overhead of teaching online classes. ASU won't have to pay its professors 10 times as much to teach ten times the number of online students, for example.
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The degrees might even be worth something for the students, too.
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