Starbucks and Arizona State U. Will Expand Tuition-Discount Partnership

April 06, 2015

Starbucks and Arizona State University announced on Monday that they will expand the full benefits of their tuition-discounting partnership to include Starbucks employees who have not yet accrued 60 college credits.

ASU’s president, Michael M. Crow, said they were doing so because of continuing demand and the success of the initial program — since the summer, about 3,400 Starbucks employees submitted completed applications, 3,000 were accepted, and nearly 2,000 enrolled.

Under the arrangement, the university provides a guaranteed scholarship — effectively a tuition discount — to all Starbucks students who attend ASU Online. The students are also eligible for federal Pell Grants and need-based financial aid from the university. Starbucks reimburses employees for the remaining amounts not covered by the discounts and federal financial aid. (Initially it did so every time students finished 21 credits. It now will provide the reimbursements after each semester.)

The ASU-Starbucks partnership was initially designed as a college-completion program with the university scholarships equal to about 42 percent off the sticker price (or $2,420 for a 12-credit load) available only to students who already had 60 college credits, and lesser scholarships (22 percent discounts) to lower-division students. Under the new version of the plan, all students will receive the higher scholarships and Starbucks reimbursements. Mr. Crow said the university could afford to offer the discounts because of the cost model it had developed for its online degree programs. Arizona State will continue to study the program as an experiment "to demonstrate college success while employed."

Starbucks is not the only major fast-food restaurant to recently expand educational benefits. As part of its Archway to Opportunity program, for example, the McDonald’s Corporation this winter announced it would extend its tuition benefits to include not only managers at its 1,500 company-owned restaurants but also to managers at franchise-owned restaurants and to crew members at all establishments. The McDonald’s benefits — which include $1,050 for full-time managers and $700 a year to crew members who work at least 20 hours a week and who have been with the company for at least a year — can be used at any college. McDonald’s and its franchisees employ about 750,000 people in the United States.