Starbucks' announcement that it's offering a free college education to all employees did not mention potential obstacles to getting reimbursed.
The company said Monday that the program, offered to all 135,000 of its U.S. employees, would give full tuition reimbursement to employees who work at least 20 hours a week and are enrolled in Arizona State University's online program as juniors or seniors starting this fall.
Freshmen and sophomores are eligible for scholarships as well, but not full reimbursement.
The program replaces Starbucks' tuition reimbursement program of up to $1,000 a year.
Under the program, students must first complete 21 credits at ASU — or seven courses — before they are eligible for a payout.
For online students, ASU undergraduate tuition ranges from $480 to $543 per credit hour, regardless of residency status and without additional program fees. That means 21 credits would cost at least $10,000.
On its website, Starbucks said it is offering automatic, upfront scholarships to cover part of tuition. It turns out this scholarship is more like a discount ASU is offering to Starbucks employees in the program, according to The Chronicle for Higher Education.
Juniors and seniors will receive $2,420 per semester in this upfront scholarship, and Starbucks will reimburse the difference. Freshmen and sophomores will get a scholarship of $1,267 per semester with no Starbucks reimbursement, The Chronicle reported.
The scholarship represents 22% of tuition costs for freshmen and sophomores and 42% of tuition costs for juniors and seniors, Jaime Riley, Starbucks spokeswoman, said in an e-mail to USA TODAY Network.
The amount students must pay in advance will vary "depending on their major, their course load, the amount of federal financial aid, college financial aid and scholarships they get, if any," according to Riley's e-mail.
"For the majority of students, this amount will be covered by a student loan, so it won't impact their day-to-day cash flow," she said in the e-mail.
Students may not be able to count on as much need-based financial aid as they might expect. The reimbursement from Starbucks will count against them in the financial aid process, said Sara Goldrick-Rab, a professor of educational policy at the University of Wisconsin-Madison, in an interview with USA TODAY Network.
What's more, students will still have to work while they go to school to qualify for the reimbursement, so their earnings are also counted against need-based aid, Goldrick-Rab said.
"If I was a Starbucks employee and I was looking at this, I would try to sit down and do the math. ... How does this compare with just going to my local community college and qualifying for financial aid?" she said.
STUDENTS MUST FINISH SCHOOL
The Starbucks program does not truly address the cost of college and is more like a "quasi-tuition reimbursement plan," said Rachel Fishman, education policy analyst with the New America Foundation.
"In this scenario, you have the employer taking on some of the costs, but the costs are shifted on the students until they can complete," Fishman said in an interview with USA TODAY Network.
Another criticism of Starbucks' program is that it requires students to get their education through one specific online program.
"Even though ASU has a lot of majors online, it might not have the major you're interested in," she said.
Also, not everyone learns well with online-only education, Fishman said.
Who would this program be ideal for? Fishman said someone with some college credits who's highly motivated to complete an online program would benefit most from Starbucks' offer.
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