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Arizona State University: Starbucks Deal Is Not Meant To Replace State Budget Cuts

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In this Saturday, May 31, 2014 photo, the Starbucks logo is seen at one of the company's coffee shops in downtown Chicago. Starbucks is announcing a new program to help its baristas earn an online degree. The company is partnering with Arizona State University to make the program available to 135,000 U.S. employees who work at least 20 hours a week. They will be able to choose from a number of educational programs. (AP Photo/Gene J. Puskar) | ASSOCIATED PRESS

Representatives from Arizona State University insisted Tuesday that the school's new partnership with Starbucks was not struck to make up for budget cuts from the state legislature.

Starbucks named ASU its exclusive partner in a new initiative in which the coffee giant will pay the entire cost of tuition for junior and senior years of online education with the university. Starbucks employees who work 20 hours or more a week are eligible.

ASU Foundation Chief Executive Officer Rick Shangraw Jr. acknowledged the deal would raise revenue for the school, but it is not meant to compensate for state funding cuts.

"This is not a profit-seeking venture," Shangraw told The Huffington Post. He added, "That's not to say top-line revenue won't increase -- obviously it will -- but this is a program that stands by itself."

Arizona cut spending per student in public higher education more than any other state from FY 2008 to FY 2014, reducing it by 48.3 percent during that period.

Starbucks said it is ready to pay the cost of tuition for potentially thousands of its employees to attend ASU's online program. That's anywhere from $5,856 to $8,736 per semester, based on 2014-15 tuition rates, for each employee who participates in the program as a full-time student.

Shangraw said ASU's goal for the program is to "make education accessible" by growing its online degree program.

The online degree programs is poised to bring in hundreds of millions of dollars to ASU without requiring the university to expand its housing or dining options. Currently, the university has 10,000 students enrolled online, but Shangraw expects that number to climb to 100,000 over the next five years. If the school manages to meet that goal, it would have more students enrolled online than the roughly 65,000 who attended class on a campus last year.

Starbucks CEO Howard Schultz told HuffPost that 800 employees had signed up for the program in the last 24 hours. The company is opening the opportunity to up to 135,000 employees at its 8,200 company-operated locations.

"No question we can scale up to the numbers we think Starbucks will deliver," Shangraw noted.

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