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Starbucks offers (almost) free college degree for 135,000 employees

Starbucks is offering freshman and sophomores reduced tuition at Arizona State University. In junior and senior years, Starbucks would reimburse any money that workers pay out of pocket.

  • By Candice Choi Associated Press

| New York

Starbucks plans to announce a program Monday intended to help its baristas earn an online college degree.

The company is partnering with Arizona State University to make the program available to 135,000 U.S. workers who work at least 20 hours a week. Employees will be able to choose from a number of educational programs, and won't be required to stay at Starbucks after earning the degree.

For freshman and sophomore years, students would pay a greatly reduced tuition after factoring in a scholarship from Starbucks, ASU and financial aid, such as Pell grants. For junior and senior years, Starbucks would reimburse any money that workers pay out of pocket.

That means employees who already have two years of college under their belts would be able to finish school at no cost.

CEO Howard Schultz plans to make the announcement at the Times Center in New York City, where Education Secretary Arne Duncan will be in attendance, along with 340 Starbucks employees and their families.

Tuition reimbursement is a rare benefit for low-wage workers in the retail industry. In 2010, Wal-Mart Stores Inc. started offering partial tuition grants for workers at American Public University, a for-profit, online school.

Starbucks already has program that reimburses workers for up to $1,000 a year at City University of Seattle or at Strayer University. Starbucks spokeswoman Laurel Harper says that that program will be phased out by 2015. Starbucks says the new program is far more generous and is intended to address high college drop-out rates, given the financial struggles many face in finishing college.

The Seattle company doesn't know how many of its workers will apply, and it isn't saying how much the program might cost. Tuition for an online degree at ASU is about $10,000 a year. Many Starbucks workers would likely qualify for a Pell grant, which can be worth as much as $5,730.

The financial terms of Starbucks' agreement with Arizona State are not being disclosed.

Starbucks workers would have to meet the same admission standards as other students at ASU. Only workers at Starbucks' 8,200 company-operated stores would be eligible. Another 4,500 Starbucks locations are operated by franchisees.

The program is also available to Starbucks' other chains, including Teavana tea shops and Seattle's Best.

Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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