(Note: this is a revised version of an earlier post, which was a revised version of even earlier posts.)

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The Problem

About 10% of Americans are chronically poor or near-poor, most of whom lack the skills to move up the economic ladder.  

The Challenge

  • Alleviate poverty

  • Incentivize skill development

  • Increase social mobility at lower-income levels

  • Increase labor market participation

  • All without raising taxes very much 

The Proposal

Adult Student Basic Income (ASBI): $800/month up to 18 months total, no more than 9 months a year, for adults enrolled in postsecondary training and education programs, such as:

  • College Classes

  • Adult Education

  • ESL Classes

  • GED/HS Diploma Programs

  • Job Readiness Training

  • Vocational Training

  • Internet Classes

  • Modular Courses

  • On-The-Job Training

  • Apprenticeships

Considerations

  • Public and bipartisan buy-in

  • Funded primarily through transfers from budgets of redundant government programs

  • Minimal tax increase on employers and affluent households

  • Employers and households paying higher taxes would also benefit from the ASBI - making the tax increase much more palatable

Requirements

  • American citizens or eligible non-citizens between 18-62

  • Approved institutions and programs only

  • Minimum 20 hours a week participation, including time allotted for homework

  • Minimum one month participation at a time

  • Periodic performance confirmation

A registry would be compiled from existing regional and state agencies that oversee and accredit or approve postsecondary institutions and programs. Participation would include time allotted for homework, based on information from training and education providers. For instance, a standard college course generally involves about 3 hours of study time for every unit of credit, so taking 7 units of college coursework would be enough to qualify. 

Performance requirements would vary according to the institution, class, or program. As a rule, one would be required to get a passing grade or certificate of participation confirming that at least 20 hours a week of class or training time had been satisfactorily completed during the period of review. Those not meeting performance requirements would have their ASBI suspended until they submitted documentation of having completed the required coursework or training.  

The ASBI is not means-tested, so individuals can work and still receive their full payment - provided they meet ASBI participation and performance requirements.

Funding

The ASBI would pay for itself through a modest tax increase and reduced spending on other government programs, such as Supplemental Security Income (SSI) and Social Security Disability Income (SSDI). Funding for Pell Grants would be halved, with the remaining funds going to the neediest students. Other safety-net programs would have smaller budgets because they are means-tested, so anyone receiving an ASBI would either receive lower benefits or no longer be eligible for benefits.

In addition, the opportunity to work while receiving an ASBI, if only on an occasional or part-time basis, would attract people who might otherwise have applied for other kinds of government benefits. For example, the chance to earn money through occasional work would likely attract people with disabilities to try the ASBI instead of pursuing disability benefits - or as an option if they are denied disability benefits (as is the case for many applicants). ASBI participation would also allow flexible, self-paced training at home, an essential learning environment for some disabled individuals, especially those who suffer from periodic flare-ups of pain or fatigue.

Here’s a possible funding scenario:

Perks

As noted, the ASBI would not be means-tested, so recipients could work part- or full-time.  Although the ASBI would partly replace federal student aid programs, state and institutional aid programs would not be affected.  Unlike Pell Grants, the ASBI would not drive up school fees because the amount of payment is not adjusted for the cost of attendance. Instead, the ASBI would turn students into cost-conscious consumers. It’s their money, so the less they pay for school, the more available for other expenses. The ASBI would also make students think twice before choosing an expensive private school when a cheaper but perfectly adequate public option is available.

Plus, the ASBI would increase the psychological well-being of its recipients, partly by decreasing financial stress and partly by increasing personal agency: the sense of control and competence that comes from achieving goals by one’s own efforts.