Starbucks Corp., which has offered company stock for store workers for more than two decades, will now begin picking up most of the tab for workers to get a degree through Arizona State University online.
Starbucks employees who work at least 20 hours a week and enroll in the university’s online bachelor’s degree will get $6,500, about half of their tuition, for the first two years, the company said in a statement. They will then get full tuition for the final two.
“We’ve always known that our partners work hard every day,” Cliff Burrows, president of Starbucks’ Americas region, said in a phone interview. “This is the best way we can serve them.”
Starbucks, the world’s largest coffee-shop chain, has offered cafe workers restricted stock, known as Bean Stock, since 1991, and has a 401(k) matching program. Store employees get a free pound of coffee weekly plus free beverages on work breaks and a 30% discount on Starbucks food, drinks and merchandise. The company previously offered as much as $1,000 a year in tuition reimbursement for employees who had worked at Starbucks at least one year.
Student-loan borrowers in the U.S. have amassed more than $1.2 trillion in debt -- a drag on the economy as some young people avoid big purchases or starting a business. President Barack Obama issued an executive order on June 9 to expand a program easing student-loan payments. Still, on June 11, the U.S. Senate blocked a measure to let student-loan borrowers refinance their balances at lower interest rates.
In the new program, Starbucks workers can choose from about 40 programs, including engineering, nursing and business. Company employees working in support centers and roasting facilities, as well as for the Teavana, La Boulange and Evolution Fresh brands can participate. Workers won’t be required to stay at Starbucks for a specified period after being reimbursed for tuition.
“This is the most significant investment we’ve made in our partners since the introduction of Bean Stock,” Burrows said. The program is meant to help with the financial burden of education, he said.
The program was designed during the past six months, said Michael Crow, Arizona State’s president, who has known Starbucks Chief Executive Officer Howard Schultz for several years and has worked with him on past projects. Crow expects as many as 15,000 Starbucks students to enroll.
“We’re able to be a part of a corporation which is valuing human capital at a whole new level,” he said.
Other U.S. companies offer college tuition reimbursement -- some with stricter requirements. L Brands Inc., owner of Victoria’s Secret, gives employees who’ve worked at least one year full-time as much as $3,000 a year for college tuition. Home Depot Inc. offers tuition reimbursement for salaried and full-time hourly workers.
Of Starbucks’ 135,000 U.S. store employees, about 25% already have a bachelor’s degree. Seattle-based Starbucks has about 11,600 U.S. locations.
Starbucks shares rose 0.2% to $74.85 at 11:07 a.m. in New York. They lost 4.7% this year through June 13, the most recent full trading day, while the Standard & Poor’s 500 Index gained 4.8%.