Starbucks’ college plan could cost up to $250M

Published 12:00 am Tuesday, April 7, 2015

SEATTLE — Starbucks has revamped the college plan it offers U.S. employees in order to cover full tuition for all four years of college in Arizona State University’s online program.

The plan, also underwritten by ASU, previously paid for the last two years of college, while freshmen and sophomores had access to partial scholarships and financial aid.

Starbucks, which aims to graduate 25,000 of its employees by 2025, says the program may end up costing it up to $250 million over that period.

The program was launched last June. CEO Howard Schultz said he wanted to alleviate the burden that forced many young people to drop out of college.

The idea won praise but also was criticized as the initial barrage of publicity didn’t spell out a lot of the details behind the program. It later emerged that ASU was providing a substantial discount.

Under Schultz’s guidance, the coffee giant has increasingly sought to address political and social issues in recent years. Many have nothing to do with its core business of selling coffee.

But some, like the college plan, reinforce both its brand positioning and its allure to employees, especially at a time when retail rivals like Wal-Mart and McDonald’s are beginning to increase salaries.

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