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Starbucks Announces College Funding Plan for Employees

Tuition Reimbursement Application

June 16, 2014

Starbucks recently announced a new initiative that will provide two years of college tuition reimbursement to employees who meet certain requirements. The program, which is the first of its kind, was created in collaboration with Arizona State University and is open to any of Starbucks's 135,000 employees in the U.S. According to The New York Times, to become eligible, employees must work at least 20 hours per week and have grades and test scores good enough to qualify for admission to Arizona State. However, unlike traditional tuition reimbursement programs offered by other organizations, employees who take advantage of the program are not required to stay with the company once they graduate.

"Starbucks is going where no other major corporation has gone," Jamie P. Merisotis, president and chief executive of the Lumina Foundation, told The New York Times. For many employees, he added, an online education "is the only reasonable way they're going to get a bachelor's degree."

According to the official company press release, the plan also extends to employees at Starbucks support centers, plants and company-operated stores, such as Teavana, Evolution Fresh, La Boulange and Seattle's Best. Students who gain admittance to ASU as a junior or senior will get full tuition reimbursement for school until they are able to graduate with a bachelor's degree. Students admitted as freshman or sophomore will receive a partial scholarship and need-based aid, as needed. Employees can choose from one of Arizona State University's 40 undergraduate programs, which will be delivered entirely online.

As CNN Money noted, this move is just one of the ways Starbucks has gone against the grain when it comes to employee benefits and treatment. For example, Starbucks continued offering health insurance to both full-time and part-time employees after implementation of the Affordable Care Act, even though the majority of businesses were cutting back. Additionally, Starbucks CEO Howard Schultz supports the current push for a hike in minimum wage. Schultz believes that in a business such as Starbucks that is largely run by students or aspiring students, the new college funding program is a great way to give back.

"The rules of engagement for running a company that is people-based like Starbucks, and so many other companies: you just can not continue to leave your people behind and only focus on shareholder value," Schultz told CNN Money.

"I feel so strongly this is the right thing to do and Starbucks as a company is going to benefit in ways that probably we can not identify today."

According to CNN Money, Starbucks isn't entirely sure what the program may cost, partly due to the fact that they don't know how many employees will sign up. However, the benefit is around $30,000 for most students, Schultz mentioned. About 70 percent of the company's employees do not have an undergraduate degree. Under the new tuition plan, students who are currently enrolled at a different school will be able to apply to ASU and transfer their credits.


Compiled by Holly Johnson

Sources:

"Starbucks College Achievement Plan," Starbucks, http://www.starbucks.com/careers/college-plan

"Starbucks offers workers 2 years of free college," CNN Money, June 16, 2014, Gregory Wallace, http://money.cnn.com/2014/06/15/news/economy/starbucks-schultz-education/

"Starbucks to Provide Free College Education to Thousands of Workers," The New York Times, June 15, 2014, Richard Perez-Pena, http://www.nytimes.com/2014/06/16/us/starbucks-to-provide-free-college-education-to-thousands-of-workers.html

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