Starbucks’ recently announced partnership with Arizona State University to help its employees pay for an online degree will be funded by the taxpayer, rather than from the global coffee chain itself.
While it was billed as “free tuition” by some when the partnership was first announced, in reality ASU is offering Starbucks employees a reduced tuition rate, while the students are expected to cover the rest of the cost with federal student aid or from their own pockets.
The “scholarship” portion in the form of a discount is essentially funded by taxpayers, as the university is funded by public coffers.
Starbucks will largely cover the costs of juniors and seniors completing their degrees if they take a full load of classes. Freshmen and sophomores, however, pay the reduced tuition themselves.
Last month, Starbucks CEO Howard Schultz, ASU President Michael Crow, and U.S. Secretary of Education Arne Duncan met to launch the Starbucks College Achievement Plan.
Crow had told USA Today that Starbucks is “investing” in human capital, and a Starbucks spokesperson said the Seattle-based company’s total investment in the program won’t be known until the company sees how many students sign up.
These statements suggest that Starbucks would end up footing the bill for the program and the resulting scholarships. Many headlines implied the coffee company was paying the full cost of tuition.
Yet those initial claims were overstated.
Following the initial announcement, Crow told The Chronicle of Higher Education that Starbucks is contributing “none” of the money toward the scholarship portion of the program. Instead, ASU will simply charge eligible workers less for tuition.
The Chronicle itself labeled the initial claims “misinformation.”
A Starbucks spokesperson confirmed to The College Fix that Crow’s comments were not a “revelation” but rather meant to “help clarify any misconceptions or confusion” about the program.
“In this partnership, ASU offers an upfront tuition scholarship … and Starbucks offers complete reimbursement for juniors and seniors as students progress,” Starbucks spokesperson Jaime Riley said.
Riley also said that ASU is “embracing this program with overwhelming excitement” and “has seen an enormous rise in interest since the announcement.”
ASU officials did not immediately return requests for comment to confirm that claim.
Riley defended the decision to only offer 100 percent tuition coverage to juniors and seniors.
“We chose to apply full tuition coverage to junior/senior year students since they have the highest success rates with academic study online, but also have a higher risk of dropping out due to student debt,” she said.
Riley also said the school wants to create an “on-ramp” for younger students, who receive just a 22 percent tuition scholarship from ASU.
The Associated Press reported that Starbucks would not bear any costs to cover the remaining 78 percent of tuition, and instead the students would have to apply for financial aid in the form of Pell grants or pay the rest out of pocket.
For juniors and seniors, Starbucks would reimburse the remaining tuition of up to 58 percent for each time the student completes 21 credits.
College Fix contributor Andrew Desiderio is a student at The George Washington University.
Like The College Fix on Facebook / Follow us on Twitter