Starbucks offers online college program to workers
By CANDICE CHOI
AP Food Industry Writer
Published:
Sunday, Jun. 15, 2014 - 8:41 pm - The Sacramento Bee
Last Modified: Monday, Jun. 16, 2014 -
3:25 am
NEW YORK -- Starbucks is rolling out a
program that would allow its workers to earn an online college degree at Arizona
State University at a steeply discounted rate.
The coffee chain is partnering with the school to offer the option to 135,000
U.S. employees who work at least 20 hours a week. The Seattle-based company says
it will phase out its existing tuition reimbursement program, which gave workers
up to $1,000 a year for education at certain schools.
The company says the program doesn't require workers to stay at Starbucks
after they earn their degrees. They can also pick from a wide range of
educational programs that aren't related to their Starbucks work.
Starbucks CEO Howard Schultz is scheduled to announce the program Monday
in New York City, with U.S. Education Secretary Arne Duncan and about 340
workers and their family members in attendance.
It's not clear how many workers will choose to participate in the new program
or how much it will cost Starbucks Corp. The company isn't disclosing the
financial terms of its agreement with Arizona State University. But the program
could significantly boost the enrollment for Arizona State's online program,
which charges tuition of about $10,000 a year. That's roughly the same as the
school's traditional degree program.
Tuition reimbursement is a rare benefit for low-wage workers in the retail
industry, but Starbucks isn't the first to offer it. In 2010, Wal-Mart Stores
Inc. launched a partnership with American Public University, a for-profit,
online school, to give workers and family members partial tuition grants.
The retailer, based in Bentonville, Arkansas, says more than 400 of its
workers have since completed degrees through the program. Wal-Mart's program
also does not require workers to stay and allows them to pursue a variety of
degrees.
Starbucks' existing tuition reimbursement program, which was rolled out in
2011, gives workers up to $1,000 a year for courses at City University of
Seattle or Strayer University. So far, Starbucks has paid out $6.5 million under
that program, said Laurel Harper, a company spokeswoman.
Zee Lemke, a 31-year-old Starbucks employee and union organizer in Madison,
Wisconsin, said she thought the program might be useful to some workers. But she
noted that prospective employers also look at where a degree was earned, and
that actual in-class experience matters.
As with most matters involving financial aid, the terms of the new program
are somewhat complicated and will vary depending on each worker's situation.
Tuition for an online degree at ASU is about $10,000 a year, roughly the same
for its traditional educational programs. For the freshmen and sophomore years,
Starbucks and Arizona State say they will put around $6,500 on average toward
the estimated $20,000 in total tuition.
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 EdVisors.com, 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.
The program would work similarly for the junior and senior years, except that
Starbucks would reimburse any money workers end up having to pay out of pocket.
Starbucks said most of its workers have already started school, so could
potentially finish off their degrees at no cost if they applied for the program.
The company says the program will be available to workers at its other chains as
well, including Teavana tea shops and Seattle's Best.
The program is available only to workers at Starbucks' 8,200 company-operated
locations. Another 4,500 U.S. locations are operated by franchisees.
Kantrowitz said the new program at Starbucks has the potential to benefit all
parties involved. Workers will get a chance to earn a degree in a relatively
affordable way, and Starbucks could attract a better pool of workers. Arizona
State University will also have a major employer potentially sending lots of
students its way.
"It's a way to expand revenue," he said of the online programs offered by
traditional, brick-and-mortar universities.
Enrollment for Arizona State University's online program already stands at
around 10,000.