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Starbucks' College Achievement Plan

Starbucks' College Achievement Plan

“We as a company want to do something that has not been done before. That is, we want to create access to the American Dream, hope and opportunity for everybody,” said Schultz.

Elizabeth Hoyt

June 17, 2014

According to Starbucks’ statistics, more than 70% of their U.S. employees are current or aspiring students.

Starting in the fall of 2014, Starbucks is collaborating with Arizona State University to help thousands of their part- and full-time employees complete their college degrees with the new College Achievement Plan.

“We as a company want to do something that has not been done before. That is, we want to create access to the American Dream, hope and opportunity for everybody,” said Howard Schultz, Starbucks chairman, president and CEO.

Employees will be able to finish their bachelor’s degree with full tuition reimbursement by choosing from ASU’s 40 undergraduate degree programs online, which is ranked by U.S. News & World Report as the 9th best online bachelor’s degree program.

How Does It Work?

Employees will not be required to make any sort of commitment or obligation to continue working at Starbucks in any capacity past graduation.

If that didn’t sound odd to you, it should. That’s pretty unusual for a company paying for an employee going to school.

Although many employers do offer tuition reimbursement programs, most come with limitations such as exclusions for new employees, requirements to sign contracts for years of work or work-related course limitations.

Essentially, what this means is, Starbucks is going to pay for its employees from their first day to get whatever degree they desire and, for many, this means eventually leave to get a better paying job.

Employees admitted to Arizona State University online as a college junior or college senior are able to earn full tuition reimbursement for each year of coursework completed towards their bachelor’s degree.

Employees admitted to Arizona State University online as a college freshman or college sophomores are eligible to receive partial scholarships and need-based financial aid toward the completion of their college degree.

Who Qualifies?

Here’s who qualifies (as outlined on the Starbucks’ web site):

• U.S. based employees of any company stores (which includes Starbucks, Teavana, La Boulange, Evolution Fresh and Seattle’s Best Coffee stores)

• Benefits-based employees (those who work a minimum of 20 hours/per week)

• Employees who do not yet have a bachelor’s degree

• Partners admitted to Arizona State University according to their admission requirements

For those worried about transferring prior credits, it’s easier than you think. In fact, according to ASU online, “more than 90% of ASU students online transfer some or all of their credits from a previous college or university.”

So, What’s the Catch?

“Free” is a relative term.

Starbucks says the plan places an emphasis on college completion, not on cash up front. Employees or, in this case, students, will be reimbursed once they complete 21 credit hours with no reimbursement until the first 21 credits are completed.

Arizona State University’s online tuition rate’s range anywhere from $480-$543 per credit hour (bachelor’s programs are 120 credit hours). Prices are the same for in- and out-of-state students.

That means that a student looking to take the 21 credits needs to pay around $10k- $11k up front.

That is a lot of money to pay upfront. That hurdle is one that may have caused many to stop taking courses in the first place. It is certainly possible to overcome the barrier with financial aid and scholarships, but the campaign seems a bit misleading.

Representatives from Starbucks originally indicated that students would be given scholarships or financial aid, seemingly from the company. It was later revealed by Arizona State University President Michael Crow, however, that Starbucks will not contribute any money toward that cost.

In reality, ASU is just going to charge workers a reduced tuition rate and that ASU will help students arrange financial aid through student loans and government assistance until they are reimbursed.

Starbucks will be phasing out its previous college program where employees received a discount on tuition at Strayer University, though current participants will be able to continue through 2015.

While ASU does have a highly rated online program with more than 40 majors, it is more limited than the previous program which covered any college or university. The new plan only applies to employees willing to take Arizona State’s online courses.

However, the previous program cannot even begin to compare in terms of financial reimbursement – it capped at $1,000.

According to an article published by The Huffington Post, “Laurel Harper, a Starbucks spokeswoman, said previously that the company’s analysis with ASU found most of its workers would qualify for federal Pell grants.”

If students do qualify for federal aid, Starbucks will have to pay even less out of pocket costs for their employees. In fact, the same article touched on a discussion with Matt Ryan, chief strategy officer for Starbucks. That article paraphrased a discussion with Ryan, where he noted that “if workers did qualify for grants…Starbucks could be responsible for very little, if anything.”

Overall, Increased Access to Education IS a Great Thing

The program will likely cost millions, depending on enrollment, which Starbucks is prepared to handle. ASU is preparing for a surge in enrollment as well.

“This is going to give our [employees] hope, opportunity and the freedom to believe in themselves and their careers for the long terms,” said Schultz.

“The Starbucks College Achievement Plan is part of the answer to the question ‘what is the role and responsibility of a public company,’ and for me it demonstrates the heart and the conscience of Starbucks.”

Learn more about the details of the new College Achievement Plan on the Starbucks web site.


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