Starbucks will send its employees back to college and help pay for their online bachelor’s degrees. But many low-wage employees already have college degrees and still end up working at Starbucks, and, experts say, the only school the employees can enroll in is a particularly expensive one.

The Starbucks College Achievement Plan is open to 135,000 employees who work at least 20 hours a week to complete a bachelor’s degree with Arizona State University, if they have the grades and test scores to get in. Workers with two years of college under their belts will get full reimbursement and others will get a partial scholarship of around $6,500 toward $20,000 tuition. “In the last few years, we have seen the fracturing of the American dream,” Starbucks Chief Executive Howard Schultz said in a statement.

Also see: Starbucks sending employees back to college, some for free

Around 70% of Starbucks SBUX, -2.07% employees are students or aspiring students, according to a statement released by Starbucks, but earning a degree may not help many of them — at least immediately. The number of U.S. graduates with minimum-wage jobs has doubled since the years before the recession, according to the Bureau of Labor Statistics. In 2013, 260,000 U.S. students with a professional or college degree had a job that paid $7.25 an hour last year and, although that was down from 284,000 in 2012 and 279,000 in 2011, that figure hovered at 127,000 in 2005 and 2006, and reached a recent peak of 327,000 in 2010.

Online education generally has a low retention and completion rate, says Mark Kantrowitz, publisher of Edvisors.com, a network of websites about planning and paying for college. “The main reason for low performance at online programs in general has to do with the setting,” he says. “Not everybody can benefit from an isolated learning experience, without the opportunity to learn from peers and get more hand-holding and the demographics (low-income students are less likely to graduate).” Taxpayers can exclude up to $5,250 in employer-paid educational assistance for college courses, he adds.

College degrees to be subsidized by Starbucks

Starbucks employees can leave the company when they graduate, but the college achievement plan gives employees an incentive to stick around for the duration of the degree, says Demetrios Sourmaidis, Chief Financial Officer at StudentDebtRelief, which counsels borrowers on various student loan programs. “Commit to Starbucks for four years while you complete your course work and you could be left with a very small bill for a four-year degree,” Sourmaidis says. And if they do? “That’s probably worth the cost of the program alone.” And lest we forget, he says, employees do get to reduce or avoid taking on student debt.

“It’s less than perfect for students in that they only have one option,” says Sandy Baum, research professor of education policy at The George Washington University. “Many Starbucks employees will have this aid and Starbucks will just pay the difference.”

Most Arizona State University undergraduate online tuition fees range from $482 to $852 per credit hour, regardless of residency status. For on-campus classes, it costs $677 per credit hour for in-state residents for a liberal arts program, and $993 per credit hour for out-of-state residents, according to the university’s online fee calculator. “That’s very high,” she says. Of course, that doesn’t impact students with more than two years of college credits who are fully covered, but it will be an issue for the rest, Baum adds. The average cost per credit for an online bachelor’s program nationwide is $277 versus $243 for in-state, on-campus courses, according to a 2013 survey by U.S. News & World Report.

Workers in licensed Starbucks stores — rather than company-operated stores — are not eligible for the Starbucks plan. Kareema Charles, 22, is a journalism undergraduate student at Stony Brook University and works part-time at the licensed Starbucks at Stony Brook University Hospital. But she says a journalism course lends itself to working in a classroom environment with others. “I don’t think doing online classes would be good for me,” Charles says. “But some people wish they’d had a chance to complete school. In some cases, they work at two Starbucks to make a living.”

Others say the program is a win-win-win — for employees, the university and Starbucks. It will help low-earning employees get a college education with less student loan debt, attract ambitious students to Arizona State University, plus help Starbucks lure and keep talented workers, says Kenneth Hartman, senior fellow at Eduventures, a higher education research and marketing company. It also makes sense for Starbucks to offer online courses only. “With online courses, workers don’t have to leave their shift early and spend 20 minutes trying to find a parking spot,” he adds.

More employers are likely to pursue online education because it’s simpler administratively, offers bulk discounts and more consistency in the quality of education, Kantrowitz says. “Others will continue to offer brick-and-mortar education, but will reimburse the employee after the coursework is complete instead of paying the school directly,” he says. Online college enrollments hit 7.1 million last year and now account for one-third of total higher education enrollments, according to a recent survey by the Babson Survey Research Group for Sloan-C, a consortium of online learning professionals.

Many companies already pay for college courses. A total of $10 billion in employer-paid tuition assistance was provided to 1.8 million recipients in the 2011-2012 academic year, the latest years for which data is available, according to Kantrowitz’s analysis of National Postsecondary Student Aid Study. “It’s unusual for companies in retail to provide such benefits,” he says. In 2010, Wal-Mart WMT, -1.02% partnered with the for-profit American Public University to provide 15% off online courses (up to $3,000 a year for a BA). Starbucks may be the first to partner with the online program of a public college, he adds.

A spokeswoman for Starbucks says it’s not disclosing the financial details of the partnership.

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