NEW YORK, N.Y. – Starbucks says more than 1,000 of its workers have enrolled for an upcoming fall semester at Arizona State University to take advantage of a program that helps pay for their tuition.
That’s from about 4,000 workers who started the application process, 2,000 who completed it, and 1,800 who were accepted by the school, according to Starbucks. The Seattle-based company said the most popular degree programs being pursued are psychology, organizational leadership, health sciences, mass communications and media studies and English.
Starbucks said it is too early to tell how much the company will end up paying in tuition reimbursement for the first batch of students. Reimbursements to workers will vary, with many employees expected to qualify for financial aid such as federal Pell grants because of their limited incomes. Over time, however, Starbucks said it expects to spend “tens of millions of dollars” a year on the tuition reimbursement as more workers take advantage of it.
The company is partnering exclusively with Arizona State University’s online school to offer the benefit.
The program was greeted with fanfare this summer because tuition reimbursement is a rare benefit for low-wage retail and food workers. Starbucks also isn’t requiring workers to stay with the company once they finish their degrees. Some of the program’s terms also drew criticisms, however, such as its requirement that students complete 21 credits before being reimbursed.
The program’s terms also vary depending on the student’s year.
For freshmen and sophomores, Arizona State University is giving workers an upfront discount of about $6,500 to cover the estimated $30,000 in tuition for two years, according to Starbucks. To cover the remainder of the costs, workers would apply for financial aid, such as Pell grants, and pay for the rest either out of pocket or by taking out loans.
Students will not be reimbursed for those first two years, meaning Starbucks won’t incur any costs.
For the junior and senior years, ASU is giving a discount of about $12,600 of the $30,000. Starbucks would reimburse whatever tuition workers have to pay for after the financial aid they receive.
On Tuesday, Starbucks was set to announce that 70 per cent of the workers who enrolled in the program this fall are juniors or seniors, meaning they will get full reimbursement. About half the workers are baristas and 35 per cent are shift supervisors. The rest have positions of assistant store manager or above, the company said.
The company said the most applications came from California, Washington, Arizona, Texas, Florida and Illinois.
The program is open U.S. workers who average at least 20 hours a week at one of its company-owned locations. Starbucks says that makes about 135,000 workers eligible.
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