Starbucks to expand online college tuition benefit for workers

Out of a total of 191,000 employees, more than 140,000 employees are eligible for the program.

Seattle-based coffee chain Starbucks Corp. announced on Monday that it would offer full four year college tuition assistance program to every U.S. employee of the company. The move marks a major expansion of the coffee giant’s previously-announced educational commitment.

According to the company, employees who put in at least 20 hours of work a week will be eligible to have full tuition. The Starbucks college program was founded in 2014, with full-tuition reimbursement available only to seniors and juniors, while students in their first two years got a stipend of $6,500 to cover about half their fees.

The effort is the latest of several recent initiatives by major U.S. companies to make their workplaces more appealing and also to win favour of its customers by cultivating their images for being socially responsible. McDonald’s announced last week that it was expanding a college tuition program to employees at its more than 14,300 U.S. stores. The fast food giant also announced that it would increase hourly wages for U.S. workers at its company-owned stores. Other big employers that have recently announced wage hikes include Target Corp, Wal-Mart Stores and Gap Inc.

Out of a total of 191,000 employees, more than 140,000 employees are eligible for the program. The tuition program is an alliance between Starbucks and Arizona State University, which charges roughly $30,000 for two years of its online degree program. At present, there are about 2,000 Starbucks employees enrolled in ASU online courses. The Arizona State University offers nearly 49 online bachelor’s degree programs, in a variety of subjects ranging from business administration to art history and employees are not required to stay with Starbucks after earning their degrees.

In the next ten years, Starbucks intends to spend at least $250 million to help 25,000 employees graduate. Besides helping employees get ahead, Starbucks CEO Howard Schultz said the economy will gain from having more educated workers in the labor force.

Arizona State University President Michael Crow said the tuition it collects for Starbucks workers will be reinvested into expanding educational opportunities. As part of the collaboration with Starbucks, ASU is offering a discount or scholarship of about 42% of the standard tuition for eligible employees at their company-owned U.S. stores. That means Starbucks would be accountable for up to 58% of the tuition.

The amount Starbucks pays stands to be less and tuition fees are covered through a combination of ASU College Achievement Plan Scholarships, federal assistance like Pell Grants (administered by the school) and loans as a result of their limited incomes. The remainder and loans are reimbursed by Starbucks at the end of each semester.

As part of the agreement, Starbucks has agreed not to recommend undergraduate degrees from other universities to its employees, and Arizona State University agreed not to enter into a similar alliance with any other company without prior consent from Starbucks during the first two years of the program.

Anna Domanska

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