Starbucks Wants to Help Its Workers Get an Affordable College Degree

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A blog about business and economics.
June 16 2014 1:31 PM

The New Starbucks University

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Starbucks has announced a new tuition reimbursement plan for employees.

Photo by Fabrice Coffrini/AFP/Getty Images

A gig at Starbucks might be the newest route to an affordable college degree. Under a new plan announced by the coffee giant, Starbucks will make its 135,000 U.S. employees eligible for significant tuition reimbursement for credits earned through the Arizona State University online bachelor's degree program. (Note: Slate partners with ASU and New America on Future Tense.) The program is an unusual step by a major corporation toward making education more accessible to its workforce. Starbucks declined to put a price tag on the program but compared its rollout to the introduction of health care and stock options—each of which cost more than $200 million last year. Starbucks CEO Howard Schultz called it the most significant announcement in company history.

Employees admitted to ASU as freshmen and sophomores can qualify for a partial tuition scholarship and need-based financial aid from ASU, while those who start as juniors or seniors will get fully reimbursed by Starbucks for each full-time semester of coursework they complete toward a bachelor's degree. (Tuition for ASU's online degree program tends to cost around $500 per credit; undergraduate classes are typically worth three credits and students tend to take two to three classes at a time.) About 70 percent of Starbucks' workforce is either in school or has enrolled but been forced to drop out for various reasons, the company said.  

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Perhaps the most unusual part of the Starbucks plan is that it has almost no strings attached. Employees who take advantage of the program will not be required to continue working at Starbucks after completion or to take courses only related to their work. (When Walmart invested in employee education in 2010 through for-profit online school American Public University, the reimbursements were mostly given for credits in areas that could apply to company work.) In a presentation on Monday morning, Schultz emphasized that workers are indeed free to leave the company even after using this benefit but that the company hopes they won't. "We want to attract and retain great people. We want to provide you with new tools and new resources to have advancements in the company," he said.

Admittedly, there are hurdles in the plan. Company officials said in a town hall that they have not thought specifically about how employees will balance a full-time online course load with their day-to-day jobs. They also don't have a system in place yet to help workers gain access to laptops if they don't have them.

The Starbucks-ASU partnership is replacing a previous reimbursement program Starbucks offered that gave employees up to $1,000 a year for tuition at City University of Seattle and for-profit Strayer University. The new program is likely to be a coup for ASU, which already has one of the largest and best-regarded online degree programs (11,000 students and 40 undergraduate majors); it's likely to gain thousands more through the Starbucks initiative. ASU says its semester-to-semester retention rate is the strongest in the nation at over 90 percent. The partnership is a sign that nonprofit colleges are figuring out how to edge in on turf previously occupied by for-profit schools—in this case Strayer.

Alison Griswold is a Slate staff writer covering business and economics.

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