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Starbucks’ tuition deal is a discount

– The scholarship portion of a new education program Starbucks is offering to help workers pay for an online degree consists entirely of a discount from Arizona State University and not money from the chain.

The Seattle company this week unveiled a benefit that is designed to let college juniors and seniors earn a degree from ASU at no cost. For the freshman and sophomore years, workers would pay a reduced tuition. Workers who are admitted to ASU could pick from 40 degree programs and would not be required to stay with Starbucks after they earned their degrees.

A major aspect of the program is an upfront scholarship Starbucks said is an investment between itself and Arizona State University. When asked how much of that scholarship portion the company is providing, Starbucks initially said financial terms weren’t being disclosed.

Following the announcement, however, Arizona State University President Michael Crow told The Chronicle of Higher Education that Starbucks is not contributing any money toward the scholarship portion. Instead, Arizona State will essentially charge workers less than the sticker price for online tuition.

Starbucks said Thursday that the scholarship is a reduced tuition rate. It estimates the reduction in tuition would average about $6,500 over two years to cover tuition of $30,000.

To cover the remainder in the freshman and sophomore years, workers would apply for federal aid, such as Pell grants, and pay for the rest either out of pocket or by taking out loans. Starbucks would bear no costs in those years.

For the junior and senior years, Starbucks would reimburse workers for whatever tuition they had to cover, either upfront or through loans, once they completed 21 credits.

Matt Ryan, chief strategy officer for Starbucks, said Thursday that for a worker’s junior and senior years, the company could potentially cover up to 58 percent of the tuition in cases where workers didn’t qualify for grants.

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