It turns out that Starbucks’ tuition-free education program for employees is too good to be true.
A new report by the Daily Caller reveals that the much-lauded Starbucks College Achievement Plan announced last year and expanded in April, is largely subsidized by taxpayers.
The program is a partnership with the online degree program of Arizona State University (ASU). Starbucks is offering “all part- and full-time benefits-eligible U.S. partners the opportunity to receive 100 percent tuition coverage to earn a bachelor’s degree.”
In a press release, Starbucks said the company will invest $250 million over the next 10 years and plans to help at least 25,000 partners graduate by 2025.
The average tuition cost for four years at ASU Online is $60,000. If Starbucks achieves its goal of 25,000 graduates, that would mean a total cost of at least $1.5 billion, which is far more than the $250 million that Starbuck has pledged to spend.
Where does the rest of the money come from?
As Blake Neff at the Daily Caller points out, every Starbucks employee who enrolls in the program receives a College Achievement Plan Scholarship worth 42 percent of tuition, which is paid for by ASU, and by extension, Arizona taxpayers.
Additionally, all participants in the program must apply for federal aid using the Free Application for Federal Student Aid (FAFSA). Neff calculates that the average full- or part-time Starbucks employee would qualify for the maximum annual grant of $5,775.
So with a $630 million subsidy from Arizona taxpayers and approximately $500 million in federal aid dollars, the $250 million contribution from Starbucks doesn’t seem quite so generous after all.
Expanding tuition benefits for employees was a popular idea among several companies this year.
Just last week, Chipotle announced it will begin offering full-tuition reimbursements along with sick pay and paid vacation time for entry-level employees.
Chrysler also announced this year that it will offer free college tuition at Strayer University to its 118,000 employees.
