Companies like Starbucks and Chipotle are paying hourly employees’ college tuition. One graduate keeps asking, ‘Is this real?’

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When Daniella Malave started working for Chipotle at age 17, the main benefit she was looking for was free food. As it turned out, she also got a free college education.

While working full time for the chain, Malave completed two years of community college on annual stipends of $5,250 from Chipotle. After that, she enrolled in the company’s free online college program, through which she earned a bachelor’s degree in business administration from Wilmington University in 2020.

“I didn’t have to pay for my education,” said Malave, 24, who now works as a recruiting analyst for Chipotle in New Jersey. “Every time I say it out loud, I think, ‘Is this real?'”

Chipotle is one of more than a dozen companies that have launched free or nearly free college programs for their frontline workers over the past decade. Since 2021 alone, Walmart, Amazon, Target, Macy’s, Citi and Lowe’s have made free college available to more than 3 million working Americans.

Companies see the programs as a way to hire and retain workers in a tight job market or train them for managerial positions. For hourly employees, the programs remove financial barriers to earning a degree.

Thousands of people are now reaping the benefits. Starbucks, which operates an online college program through Arizona State University, says 22,000 workers are currently enrolled in its program. Guild Education, which manages programs for Walmart, Hilton, Disney and others and offers online programs at more than 140 schools, says it worked with 130,000 students in the last year.

But some critics question whether the programs are hiding deeper problems, such as wages so low that workers can’t afford college without them or hours so erratic that it’s too difficult to go to school in person.

“I think they’re providing these programs to get around the problem of just paying people more, giving them more certainty and improving their quality of life,” said Stephanie Hall, a senior fellow at The Century Foundation, a nonpartisan think tank.

Hall said the lack of data also makes it hard to judge the effectiveness of the programs. Chipotle, Walmart, Amazon and Starbucks, for example, don’t share graduation rates, in part because they’re difficult to calculate because students often take a semester off or take more than four years to earn a degree. Rachel Carlson, executive director of Guild Education, which also does not disclose graduation rates, says the most relevant data is whether college classes help employees get promotions or raises.

Others question the quality of online programs and whether students’ degrees will be marketable or help them pursue other careers, especially since many companies limit what employees can study. Discover only fully funds 18 bachelor’s degrees at eight universities through the Guild, for example.

“I think most of these programs expect employees to stay with the company,” said Katharine Meyer, a fellow in the government studies program at the Brown Center for Educational Policy at the Brookings Institution.

Amazon, for its part, touts college programs that offer opportunities outside the company, such as nursing. But Walmart reduced the number of programs it offers from 100 to 60 because it wanted to focus on skills that would align with careers at the company.

More than 89,000 workers have participated in Walmart’s college program and more than 15,000 have graduated, said Lorraine Stomski, Walmart’s senior vice president of leadership and associate learning.

Tanner Humphreys is one of them. He started working at Walmart in 2016, rotating hourly jobs as he tried to fit into his schedule of in-person classes at Idaho State University. But under the company’s online program, which he launched with the Guild in 2018, he transferred his credits to Southern New Hampshire University and graduated in February with a bachelor’s degree in computer science. At 27, he now works at Walmart headquarters for its cybersecurity team as a salaried employee.

“I was working paycheck to paycheck, living with a bunch of friends to pay rent and stuff,” he said. “The change from an hourly wage to a salary is really life changing.”

Companies that pay for college or graduate school are not new. But for decades, the benefit was offered primarily to salaried professionals. In many cases, workers had to spend thousands of dollars on tuition up front and then be reimbursed by their employer.

The Starbucks program, which launched in 2014, was initially a tuition reimbursement program, but in 2021 it began covering tuition costs in advance. Now, 85% of the company’s stores have at least one employee in the program, which will celebrate its 10,000th graduate in December.

Carlson said companies see an average return of $2 to $3 for every dollar they spend on education because it saves hiring and retention costs. Walmart said participants leave the company at four times the rate of non-participants and are twice as likely to be promoted.

“If I know it’s going to cost me $7,000 if my cashier doesn’t show up tomorrow, I’d rather spend the average of our members today ($3,000 to $5,000) paying for her to go to college,” Carlson said.

The companies say the programs also give opportunities to minorities. Macy’s, which started its program with the Guild earlier this year, said that half of the women who sign up are women of color.

Some companies, such as Chipotle and JPMorgan Chase, offer online programs through the Guild, as well as stipends that students can put towards in-person learning at local institutions. Amazon University programs offer a mix of online and in-person learning at local universities or community colleges.

Hall said he wishes more companies offered that kind of flexibility, since online learning isn’t ideal for everyone.

Zachary Hecker, 26, a Starbucks employee in New Braunfels, Texas, began working toward his bachelor’s degree in electrical engineering last summer through the company’s college program.

Hecker appreciates the free tuition, but often wishes he could attend classes in person or have more options beyond the state of Arizona. His classes are challenging, she said, and teachers can’t always get together and offer guidance.

But Carlson said the online classes are ideal for the average Guild member, who is a 33-year-old woman with children. Carlson said students in her programs often lack constant access to a car and need to be able to study at any time, such as after the kids go to bed.

The opportunity to earn a free degree can be life changing. Angela Batista was 16 years old and homeless when she started working for a Starbucks in New York.

“College was never in my dream,” said Batista, now 38. “I didn’t even have the audacity to fantasize about it.”

This December, he will graduate from Arizona State University with a degree in organizational leadership paid for by Starbucks. And now her son, who also works at Starbucks, is starting to work toward his own degree.



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