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Starbucks to Subsidize Workers' College Degrees
Starbucks Corp. SBUX +0.59% is planning to foot part of the bill for an online degree for U.S. employees who work at least 20 hours a week in its cafes, corporate offices and roasting plants.
The coffee giant is teaming up with Arizona State University to provide tuition reimbursement and financial aid to U.S. employees who enroll in the school's online bachelor's degree program. Starbucks employees can choose among 40 areas of study, ranging from retail management to electrical engineering.
By responding to employees' concerns about how to afford a college education, the company said, it hopes to retain talent, thereby saving on hiring and training costs.
Starbucks declined to disclose its retention rate, citing competitive reasons.
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Employees who take part in the new program won't be obligated to stay on at the company. "We do not require or expect our partners who join this program to stay with us after they graduate," said Cliff Burrows, Starbucks group president for the U.S., Americas and tea brand Teavana. "We hope they'll stay with us and grow their careers, but they are free to go onto the next stage of their careers and lives."
ASU President Michael Crow estimates the program will attract 15,000 to 20,000 Starbucks employees a year. The school has added 50 teachers, enrollment counselors and academic advisers to meet the demand the Starbucks deal is expected to create.
Annual tuition for ASU's online degree program ranges from $3,000 to $10,000, depending on the degree and course load. Starbucks estimates that employees receiving the assistance will pay less than half of their tuition costs.
Seattle-based Starbucks employs 135,000 part-time and full-time employees in the U.S. The chain says that about a quarter of its U.S. employees have bachelor's degrees, and estimates that 70% are either current or aspiring college students.
Many other employers have cut back on education assistance. A 2014 survey conducted by the Society for Human Resources Management found that 54% of employers offered undergraduate educational assistance, down from 62% in 2010.
Starbucks declined to estimate how much it expects to pay for the program, but said it is the most significant benefit it has rolled out since it introduced health-care coverage and stock options more than 20 years ago. Each of those programs cost the company more than $200 million last year.
Starbucks employees admitted to ASU as freshmen and sophomores will be eligible for a partial tuition scholarship and need-based financial aid from ASU and can apply for Pell grants for two years of full-time study.
Employees who start as juniors or seniors will earn full tuition reimbursement from Starbucks for each semester of full-time course work they complete toward a bachelor's degree.
Employees currently enrolled in other college programs can transfer their credits to ASU. Students have to meet ASU's admittance standards to be enrolled.
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