Starbucks recently announced its intention to offer full and part-time employees the chance to get a college education through an online program with Arizona State University (ASU). In the arrangement with the university’s online education program, the company will offer its 135,000 United States employees the opportunity. Seventy percent of these workers do not have undergraduate degrees.
Starbucks employees who work at least 20 hours per week and can gain admission to Arizona State with suitable test scores and grades can participate in the program. Over 40 undergraduate degrees are available for the workers to choose from when deciding what they want to study. The workers who take advantage of the program will not be required to remain at Starbucks once they earn their degree, and those who currently attend school elsewhere can apply to transfer their credits to ASU.
Low-wage workers in retail are rarely afforded the opportunity to experience the benefits of tuition reimbursement. Tuition for the ASU online program is approximately $10,000 per year. Arizona State and Starbucks are willing to provide an average of $6,500 toward the estimated tuition total of $20,000 for freshman and sophomore years. Employees would then need to apply for financial aid to cover the other $13,500. Since the workers do not earn very high wages there is potential for them to be awarded full Pell grants of $5,730 per year, or $11,460 for two years. This leaves just over $2,000 left to pay out-of-pocket.
For junior and senior years, the program would be very much the same, except the company would reimburse the workers for the money that they would have to pay out-of-pocket. To help workers get started and eventually finish the program, Arizona State will provide enrollment and paperwork help, academic advisers, and financial aid assistance.
The plan to offer employees a college education through the online program with Arizona State University has the potential to be beneficial for both the college and Starbucks. ASU is already one of the largest and highly regarded online degree programs in the United States with 11,000 students. It will only continue to grow with this new arrangement with Starbucks. The company chairman and CEO, Howard D. Schultz, believes that performance will be enhanced and the program will ‘attract and retain better people.”
Schultz has been a standout in the company since he took over in 2008 by continuing to offer his full and part-time employees health insurance, giving them stock options, and backing an increase in minimum wage. He uses the word “partners” to refer to his employees saying, “Supporting our partners’ ambitions is the very best investment Starbucks can make.”
Because there is no way to estimate how many employees will sign up for the program, there is no way to estimate how much it will cost Starbucks in the long run. A spokesman for the company, Jim Olson, estimates the benefit is about $30,000 per employee.
According to Starbucks employee surveys, 70 percent do not have a degree but would like to earn one. Some of the workers have gone to college but dropped out, while others have never gone, and the ones who are still in school see it going very slow. Thousands are expected to enroll in the new tuition reimbursement program and Arizona State President Michael M. Crow said that the university has prepared for the boost in enrollment.
The opportunity to earn a college education through the online program with Arizona State University will also be offered to employees at other Starbucks chains, including Seattle’s Best and Teavana tea shops. Though the offer only extends to the 8,200 Starbucks that are company-operated, not those operated by franchisees.
By Twanna Harps