Starbucks to Subsidize Tuition for Online Degrees

News Updates

Starbucks Coffee Co. and Arizona State University (ASU) have announced the launch of the Starbucks College Achievement Plan, creating an opportunity for the coffee chain’s eligible 135,000 U.S. employees to complete a bachelor’s degree with full tuition reimbursement for juniors and seniors, through a collaboration with ASU’s degree program delivered online.

Starbucks employees based in the U.S. and working an average of 20 hours per week at any company-operated store, and who meet ASU’s admission requirements, may choose from more than 40 undergraduate degree programs taught online by ASU’s faculty in areas including electrical engineering, education, business and retail management. Under the program:

  •  Employees admitted to ASU as a junior or senior will earn full tuition reimbursement for each semester of full-time coursework they complete toward a bachelor’s degree.
  •  Freshmen and sophomores will be eligible for a partial tuition scholarship and need-based financial aid for two years of full-time study.

Unlike many employer-based tuition-reimbursement programs offered by U.S. companies, Starbucks workers will have no commitment to remain at the company past graduation.

“Supporting our partners’ [employees’] ambitions is the very best investment Starbucks can make,” said Starbucks chairman, president and CEO Howard Schultz, during a June 16, 2014, teleconference announcing the program. “Everyone who works as hard as our partners do should have the opportunity to complete college, while balancing work, school and their personal lives.”

Starbucks’ investment, he added, is designed to help its workers avoid joining the nearly 50 percent of college students in the U.S. who fail to complete their degrees, often due to mounting debt and their need to work on a full- or part-time basis without adequate employer support.

“ASU is pioneering a new university model focused on inclusivity and degree completion, and Starbucks is establishing a new precedent for the responsibility and role of a public company that leads through the lens of humanity and supports its partners’ life goals with access to education,” said ASU president Dr. Michael M. Crow.

Innovative Support Services

In addition to financial aid, Starbucks and ASU are providing resources to meet the needs of working students. Program participants will have access to a dedicated enrollment coach, financial aid counselor and academic advisor to support them through graduation.

The program also will include:

  •  Adaptive learning services to help students progress at the right pace for them.
  •  Networking and community-building opportunities.
  •  Additional resources to help students plan their educations.

“By so clearly investing in its talent, Starbucks is providing employees with the opportunity to complete college—an investment that will pay off for them as individuals, for the company and for the nation, for generations to come,” said Jamie Merisotis, president and CEO of Lumina Foundation, which promotes enrolling and graduating more students from college.

“Tuition assistance programs can be a very valuable way to invest in your people, but they will only be as successful as the program design allows them to be,” writes Tom Cherry, senior planner with Independence University in Salt Lake City, in the June 2014 issue of HR Magazine. “Heading this effort is a great opportunity for HR to shine and do what it does best: leverage human capital.”​

Tuition Reimbursement: By the Numbers

Educational assistance not only helps the employee but also benefits the employer by developing a more educated workforce. Recognizing this, 54 percent of Society for Human Resource Management members work at organizations that offer undergraduate educational assistance, and 50 percent work at organizations that offer graduate educational assistance, according to the upcoming SHRM 2014 Employee Benefits survey report, to be released on June 24.

The maximum reimbursement allowed for tuition/education expenses is, on average, $4,592, the survey findings show.

In addition, 13 percent of organizations provided educational scholarships to members of employees’ families, and 2 percent offered educational loans for members of employees’ families. Only 6 percent of organizations offered 529 plans, which are tax-advantaged savings plans designed to encourage saving for future college costs.

Other SHRM research shows that 55 percent of HR professionals expect a rise in demand for candidates with a bachelor’s degree, and 41 percent foresee an increase in the need for advanced degrees. If minimum education requirements do increase in the future, employees may expect additional benefits to help offset the cost of education. 

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