Starbucks will now offer four years of free college tuition to its employees, up from its previous tuition plan of two years, the coffee company announced on Monday, April 6,
“By giving our partners access to four years of full tuition coverage, we provide them with a critical tool for a lifelong opportunity,” Starbucks CEO Howard Schultz said in a statement. “We’re stronger as a nation when everyone is afforded a pathway to success.”
The coffeehouse chain has partnered with Arizona State University (ASU) to provide eligible full- and part-time employees full tuition for four-year bachelor’s degrees through the university’s online degree program.
At ASU, the average cost of tuition is $60,000 for four years. Starbucks said it will invest $250 million or more to so that at least 25,000 workers graduate by 2025.
About 2,000 employees so far have enrolled in the program, which offers 49 online undergraduate degree program through ASU. Starbucks spokeswoman Linda Mills said more than 144,000 workers would currently qualify for the free tuition.
Starbucks said its decision to extend free tuition is part of its commitment to “redefine the role and responsibility of a public company.”
In March, it launched a program called “Race Together” – along with USA Today – to spur conversation and action on the country’s racial divide. In the campaign, baristas wrote the words “Race Together” on customers’ cups for one week, which was criticized for being naïve.
“Compared to the Race Together idea, which was as half-baked as it gets, this idea is a home run on several levels,” said Peter Madden, CEO of brand consultancy firm AgileCat, according to USA Today. “It’s a big bounce back for Starbucks.”
Madden added it demonstrates that the company cares about its workers.
“It taps into the soul of their brand: community,” he said. “To give an employee four years of free college is to say, ‘We care about you and want you to have your best possible life.’”
Starbucks is already known for offering its employees health care coverage and company stock, benefits that are considered unusual in the fast food and retail industries. Schultz said the company’s education plan is also helping build customer loyalty.
“Consumers want to choose those companies that have like-minded values as them,” he said.
Announcement of this program comes amid a time when employers are seeking to improve their images among customers by promoting themselves as socially responsible. In a similar move, McDonald’s announced last week it would expand its college tuition assistance program to its employees at more than 14,300 US locations.
The fast food chain, along with major retailers Walmart, Gap and Target, also recently announced wage hikes for its employees.
Schultz said Starbucks is working to “attract and retain great people,” and that employees hold higher expectations of employers.
“The benefits of yesterday may not be as relevant as today,” he said, according to the Associated Press.
The amount Starbucks pays for employees’ tuition is expected to be less than the average four-year cost at ASU, as many are anticipated to qualify for the Pell Grant and other financial aid options due to their limited incomes.
Additionally, under the new program, employers said they would reimburse workers at the end of each semester, rather than after they complete 21 credits, which some criticized forced workers to wait too long to get their money back.
Employees are not required to remain at Starbucks after graduation.
(With reports from Associated Press and USA Today)
