Starbucks and McDonald’s Expand Educational Opportunities

Companies show a commitment to helping low-wage workers earn college degrees

By Stephen Miller, CEBS Apr 10, 2015
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updated 5/4/2015

As part of efforts to enrich its employee benefit offerings to attract and retain talent, Starbucks is expanding its online college tuition-reimbursement program for employees, the Starbucks College Achievement Plan. The coffee giant announced in April 2015 it was doubling its tuition plan to cover a full four-year online degree program. Previously, only freshmen and sophomores were eligible for a partial tuition scholarship and need-based financial aid for two years of full-time study. The program, in partnership with Arizona State University, will now offer all eligible full-time and part-time employees full tuition coverage for a four-year bachelor's degree though ASU's online degree program.

The average tuition cost for four years at ASU Online is $60,000, USA Today reported. ASU Online offers 49 undergraduate degree programs.

“It's very generous. Most large organizations will provide tuition reimbursement up to $5,250”—the line at which the IRS starts taxing the benefits for both the employee and employer, Bruce Elliott, manager of compensation and benefits at the Society for Human Resource Management, told

Nearly 2,000 Starbucks employees have enrolled in the program since its launch in June 2014. CNN reported last year that about 70 percent of the company's 135,000 store employees lack undergraduate degrees.

Starbucks will also offer employees faster tuition reimbursement—after every semester instead of after completing 21 class credits. Starbuck employees have no commitment to remain at the company past graduation.

McDonald’s Widens Education Initiative

In another example of how employers can increase educational options for low-wage and other service workers, McDonald’s Corp. announced in April that eligible employees working in its restaurants who are interested in earning an accredited high school diploma and entry-level workforce certificate will be able to access Career Online High School (COHS), an innovative educational program. COHS is being offered to qualifying employees working in company- and franchise-owned restaurants as part of McDonald’s Archways to Opportunity program, a new employee education initiative promoting workforce education.

“At McDonald’s, we believe that education is the true game changer and we’re proud to provide tools and world-class training that help people succeed within our system,” said Rob Lauber, chief learning officer at McDonald’s, in a statement. “As part of our Archways to Opportunity program, we are pleased to be make a high school diploma possible for our people—along with the opportunity to gain real-world career skills with older youth and adult workforce-focused curriculum.”

McDonald’s initiative also helps eligible employees learn English-language skills and, post high-school diploma, to move on to an associate’s or bachelor’s college degree. The four program components are:

  • English Under the Arches—Provides an English as a Second Language program that teaches the English needed to communicate effectively and confidently with customers and staff every day.
  • High School Completion—Creates opportunities to obtain a high school diploma.
  • College Credit Connection—Helps find the most efficient and affordable path to a two- or four-year degree program.
  • Resources & Support—Helps remove the barriers of returning to school.

The nonprofit Council for Adult and Experiential Learning (CAEL) was selected by McDonald’s to deliver career advising services to eligible employees working in McDonald’s restaurants, the council said in April. McDonald’s believes that “the investment will strengthen the business by building the talent pipeline, improving retention, and driving employee capability,” said a statement from the company.

In addition to expanding its Archways to Opportunities education offerings at both company-owned and franchised restaurants, McDonald’s also announced in April that it was enhancing pay and benefits for employees at its company-owned restaurants, including a wage increase and paid time-off for full and part-time crew employees.

The company is raising the average pay of about 90,000 U.S. workers to around $10 an hour. The pay increase, for workers at roughly 1,500 company-owned U.S. restaurants, will take effect on July 1, 2015. McDonald’s and other fast food providers have been facing union-led protests demanding a minimum hourly wage of $15. The federal minimum wage is currently $7.25 per hour.

“We've been working on a comprehensive benefits package for our employees—the people who bring our brand to life for customers every day in our U.S. restaurants," McDonald's president and CEO Steve Easterbrook said in a statement. “We've listened to our employees and learned that—in addition to increased wages—paid personal leave and financial assistance for completing their education would make a real difference in their careers and lives.”

Chrysler to Offer Free College for Dealership Employees

In May 2015, Fiat Chrysler Automobiles announced that 118,000 employees at its U.S. dealerships are being given the opportunity for free college tuition for associates, bachelors and masters degrees.

The company's new Degrees@Work program will enable employees of participating Chrysler, Jeep, Dodge, Ram and Fiat dealerships to earn no-cost college degrees (including books and other expenses) through Strayer University, a private for-profit institution whose bachelor degree program can be completed online. Whereas companies such as Starbucks will reimburse employees for tuition costs as part of an online degree program, Fiat Chrysler dealership employees will not be required to pay anything upfront.

To participate, the employee's dealership will have to pay a flat fee, regardless of the number of employees enrolled, to Fiat Chrysler Automobiles.

Depending on the selected program of study, courses will range from business administration and accounting to education, information systems, and other areas. Courses will be offered online with 24/7 access for employee flexibility around work schedules, as well as at Strayer's campus locations throughout the United States. Credit will be offered to dealers' employees for training and work experience to accelerate completion of a degree program.

"Many of our dealers have expressed concern over the availability of talent to fill open positions due to business growth and turnover in their stores, especially in metro markets," said Al Gardner, head of Dealer Network Development and president & CEO of the Chrysler Brand, FCA US LLC. "Our goal is to position our dealer network as the 'employers of choice.' Our collaboration with Strayer demonstrates our focus on building our dealers' hard-working employees' skillsets to help them perform at an optimal level while also investing in their long-term success."

He added, "Dealers tell us that education is a benefit frequently requested by their employees. With the increasing cost of a college education, offering free college degrees without the burden of debt presents a significant value that we are pleased to provide and that differentiates us from our competitors. It will certainly help us attract and retain strong talent."

Stephen Miller, CEBS, is an online editor/manager for SHRM. Follow him on Twitter @SHRMsmiller.

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