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Starbucks to pay employees’ tuition to complete bachelor’s degrees

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Starbucks employees who work an average of 20 hours per week are being offered a potentially life-changing benefit under Starbucks newly launched “College Achievement Plan.” At the company’s first ever U.S. Partner Open Forum, streamed live today from New York’s Times Center, CEO Howard Schultz announced that Starbucks will be partnering with Arizona State University (ASU) to offer employees the chance to complete a bachelor’s degree at no cost. The program will offer full tuition reimbursement for an employee’s junior and senior years and up-front scholarships for freshman and sophomores to make college affordable.

Employees at any company-operated store, including Teavana, La Boulange, Evolution Fresh and Seattle’s Best Coffee, will be able to choose from 40 undergraduate degrees through ASU’s online degree program. According to Kerry Barlow of ASU online, the online programs are identical to on-campus programs with the same curriculum, faculty, tests and community of students. Courses of study offered are diverse and include engineering, the social sciences and business programs. Employees are not asked to commit themselves to remaining with Starbucks after graduation, although Shultz says he hopes partners would stay on once they have earned a degree.

Shultz says this is not a marketing gimmick. Businesses are taught that the primary goal is to make money, but Shultz says he believes “…that the only way you could create long-term value for the shareholders is to constantly create long-term value for your people.” The College Achievement Plan is an example of the company’s business model, says Shultz, “ …that creates a fragile balance between profitability and a social conscience.”

“This is about the future of our company, what's doing right for our people and also,
sending a message to the country that we can't build a great company, and we can't build a great enduring country, if we're constantly leaving people behind.” — Howard Schultz, Starbucks founder, chairman, president and CEO

ASU President Michael Crow characterized the College Achievement Plan as a continuation of the American Revolution that created a society in which “…your fate wouldn't be determined by your parent’s social class. Your fate would be determined by you.” However, today opportunity is imperfectly allocated. “If you come from a family of the upper quartile of family income, you'll have an 80 percent chance of attaining a college degree, regardless of your academic ability,” says Crow. “The bottom 25 percent of family incomes, you have a 9 percent chance of getting a college degree.” ASU has set out to change this paradigm.

“We're here so that you cannot be held back. Your dreams, your ideas, your potential, we don't care what you major in, by the way. You major in what seems fun to you or cool to you.” — Dr. Michael Crow, President ASU

U.S. Secretary of Education Arne Duncan addressed Starbuck employees at the forum, speaking on the importance of education in the new economy. Good jobs once available to high school dropouts, jobs in stockyards and steel mills, are gone, Duncan notes. While the Obama administration has worked hard to increase access to higher education – PELL grant funding has increased by $40 billion — the United States, which once lead the world in college graduation rates, now ranks 12th. To reach the administration’s goal of once again being number one by 2020, people like Starbucks’ partners need to return to college, says Duncan.

The College Achievement Plan is for employees who have not already earned a bachelor’s degree, although in the future Starbucks may consider expanding the program to graduate level work. Credits earned at regionally accredited colleges are transferable into the ASU online program, and credits earned at ACU are transferable to other schools. Schultz does not envision expanding the program to include seasonal employees, for example students that only work during school breaks, given the tremendous time and expense of training.