Starbucks Offers Online Tuition Reimbursement to Employees

Starbucks recently announced a new perk for its barristas: $30,000 in tuition reimbursement for online classes at Arizona State University. This translates into two full years of classes, free of charge, according to Gregory Wallace for CNN Money.

The program is set to replace Starbucks' current tuition reimbursement program, which gives employees $1,000 a year for education at certain schools. The company has so far paid $6.5 million into that program, according to Candice Choi of The Huffington Post.

"Starbucks is going where no other major corporation has gone," said Jamie P. Merisotis, president and chief executive of the Lumina Foundation, a group focused on education. "For many of these Starbucks employees, an online university education is the only reasonable way they're going to get a bachelor's degree."

The opportunity comes with no strings attached; employees will not be required to stay with the company after earning their degree. It is available to all 135,000 employees at company-operated locations, so long as they work at least 20 hours a week and are accepted by the university. Workers can benefit from this opportunity the minute they become an employee, study whatever they would like, and leave the company whenever they want to, writes Richard Perez-Pena for The New York Times.

Even if they did, their experience "would be accreted to our brand, our reputation and our business," Howard D. Schultz, the company's chairman and chief executive, said in an interview. "I believe it will lower attrition, it'll increase performance, it'll attract and retain better people."

The freshman and sophomore years will cost $20,000 in tuition at Arizona State. Starbucks is offering to cover $6,500 of that.

To cover the remaining $13,500, workers would apply for financial aid. Since Starbucks workers don't earn a lot of money, many would likely qualify for a Pell grant, said Mark Kantrowitz, publisher of, a website about paying for college. If a worker qualified for a full Pell grant of $5,730 a year — or $11,460 over the two years — he or she would theoretically be left with about $2,040 to pay out of pocket.

Junior and senior years will run the same, except that Starbucks will pay any out-of-pocket expenses for their employees.

It is currently unclear how much the program will cost the company. Starbucks has not released its financial agreement with Arizona State, and it is uncertain how many employees will take advantage of the opportunity. However, enrollment in Arizona State's online program should see a boost.

While this type of program is not the norm for retail workers, Starbucks is not the first to offer a program such as this to their employees. In 2010, Walmart began offering its employees partial tuition grants in association with American Public University.

"The rules of engagement for running a company that is people-based like Starbucks, and so many other companies: you just can not continue to leave your people behind and only focus on shareholder value," Schultz told CNN's Poppy Harlow.

The program will available to workers at the company's other chains, including Teavana and Seattle's Best.

06 18, 2014
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