NEW YORK (AP) — Starbucks says it will now cover four years of tuition reimbursement for workers to earn an online undergraduate degree from Arizona State University, instead of just two years. Last week, McDonald's Corp. also announced it was expanding a college tuition assistance program to workers at all its U.S. stores.
The moves mark the latest sign that companies are rethinking pay and benefits as they seek to attract the best workers and improve their corporate images. The programs come with limitations, of course.
At McDonald's, for instance, the coverage is only expected to be enough for about two classes a year. And at Starbucks, the tuition help isn't available for workers who want to attend classes in person.
The benefits of an online education compared with an in-person education have been debated for years, notes Jamie Merisotis, president and CEO of the Lumina Foundation, which works to increase access to postsecondary education and helped Starbucks develop its program. But he noted that online programs have improved in quality, and they're a practical way for workers to earn degrees.
Here's how the tuition benefits at Starbucks and McDonald's work:
THE OFFER: Reimbursement for tuition to earn an online undergraduate degree from Arizona State University. The amount a worker pays upfront would vary depending on his or her financial situation.
WHO'S ELIGIBLE: Starbucks says workers who average at least 20 hours of work a week are immediately eligible. The program is only for workers at company-owned stores, which account for about 60 percent of the more than 12,100 locations in the U.S.
HOW IT WORKS: Starbucks and ASU say two years of the online program costs about $30,000. But ASU is reducing the standard tuition by about 42 percent for Starbucks employees. Many workers are expected to qualify for federal aid and other grants because of their limited incomes.
Workers pay whatever costs are leftover up-front and are reimbursed for that amount at the end of each semester.
ALSO: Workers can pick from a range of academic fields and aren't required to stay with the company.
PARTICIPATION: Starbucks says about 2,000 workers have enrolled since the program was introduced last June. It says it has more than 140,000 workers at its company-owned stores and support centers in the U.S.
THE OFFER: Upfront tuition coverage of up to $700 a year for workers, and up to $1,050 for managers. The money can be used to attend classes online or in-person.
WHO'S ELIGIBLE: Workers who have been employed with McDonald's for at least a year and average at least 20 hours of work a week. Managers who work full-time are eligible immediately. The program is open to employees at the chain's more than 14,300 U.S. stores, including those owned by franchisees.
HOW IT WORKS: McDonald's provides the tuition money upfront so workers don't have to pay out of pocket. The company says the check will be made out to the school the worker plans to attend.
McDonald's expects many of its workers to take classes at community colleges, which it says charge an average of $300 to $350 per class. That means the assistance would cover about two classes a year for workers, and three for managers.
ALSO: Workers can study whatever subject they like and aren't required to stay with the company.
PARTICIPATION: Lisa Schumacher, director of education strategies at McDonald's, said about 4 percent of eligible individuals took advantage of tuition assistance when it was previously available to managers at company-owned stores.
She said she expects a similar participation rate now that it is available to workers and managers at all U.S. stores.