Poverty, income volatility, job instability, and lack of social mobility are real problems in the US. While most Americans manage to climb the socioeconomic ladder to achieve a decent version of the American Dream, some get stuck on the lower rungs in unreliable jobs with no future. They need help. In previous posts (here, here, and here), I proposed an Adult Student Basic Income (ASBI) that would effectively address these societal ills, plus boost labor market participation and labor productivity, all at manageable expense.

The ASBI I’m proposing would provide monthly stipends to adults enrolled at least part-time in approved postsecondary training and education programs, from ESL classes to apprenticeships to graduate school. Recipients would receive $1000/month up to six years total, as long as they are participating in an approved program of at least one month’s duration. The benefit would not be means-tested, so recipients could work as much as they want without jeopardizing ASBI payments. However, payments would stop if they failed to meet participation and performance requirements but could resume following a reinstatement process.

This is not a crazy idea. The ASBI just builds on similar long-established programs in the US and other developed countries, such as:

Federal Pell Grants in the US  

Pell Grants are awarded mostly to undergraduate and career school students who display exceptional financial need (income minus expenses, including cost of attending school). Recipients can receive the Pell Grant for no more than 12 terms or the equivalent (roughly six years). Full-time students are eligible for more money than part-time students. The maximum Federal Pell Grant award for the 2020-21 award year is $6,495. Spread out over a year, that would be around $541/month. .

  • Comparison with the Adult Student Basic Income.  Pell Grants are need-based, variable, and much less than an ASBI. The ASBI also covers a broader range of adult training and education options.  Pell Grants and the ASBI both have six-year limits

The State Education Grant Scheme in Denmark

Denmark provides monthly grants for full-time students age 18 and over. Students can receive the grant up to six years total, which need not be consecutive.  The maximum grant was close to $1000/month in 2020 (6,166 DKK). Some recipients receive less than the maximum, including employed students who earn over a set amount. If these students accept full support in a year when their earnings exceed the minimum allowed, they will have to pay back some of the money.

  • Comparison with the Adult Student Basic Income. Danish education grants differ from an ASBI in that payments are subject to an earnings-test, only full-time students qualify, and most college graduates no longer qualify. The ASBI also covers a broader range of adult training and education options, e.g., ESL GED prep, pre-vocational basic skills instruction, and paid internships/apprenticeships. Similarities to the ASBI include the grant amount (almost $1000/month) and six-year limit.

The advantage of the ASBI over Pell Grants and the Danish scheme is that it’s more flexible, less likely to impose economic hardship on recipients, and more likely to encourage skill building across adulthood. The ASBI wouldn’t force people to quit jobs to go to school and it would allow people to quit jobs to go to school. It would encourage creative approaches to skill upgrading, such as mixing remedial coursework with part-time internships. It would also make it a whole lot easier for low-skilled immigrants to improve their employment prospects, if only by taking long-term ESL classes.  An ASBI could even entice chronic slackers back on the path to gainful employment via the increased motivation that comes with self-confidence, which follows from having employable skills.

Next: How to pay for the Adult Student Basic Income, 2021 Edition

Links:

https://studentaid.gov/understand-aid/types/grants/pell

https://www.su.dk/english/state-educational-grant-and-loan-scheme-su/

https://www.studentsurvivalguide.dk/posts/survival-guide-to-su-student-grant-in-denmark