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Universal Basic Income

Impact on Student Finances

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With the rise of artificial intelligence and increasing automation, the job prospects for millions of people and future college graduates look bleak. One of the trending proposals is giving everyone a universal basic income, no matter what their economic statuses or needs are.

Student debt is one of the biggest segments of American debt, with the total amount being around $1.4 trillion and increasing [1]. This means the average college graduate have a debt of $32,731 [2]. The average four-year degree costs currently $104,480 [3]. Tuition increase has been 8 times faster than that of wages since 1989 [4]. 4 out of 10 adults under the age of 30 have a student loan [5]. This alone might seem like a lot, but 14%, or 5.4 million, have at least one student loan account that is not paid on time [6]. Studies have shown that education boosts productivity and with the known debt burden, prospective students might see higher education as too expensive and try to find options elsewhere in the labor market.

American college students stand to benefit from universal basic income. Pilot studies, such as the one done in Ontario, Canada, have it that each individual would earn US $13,000 per year. If earned over a four-year period, American college graduates would have no debt. Young college graduates with student loans are more likely to have a second job, and to report struggling financially [7]. This creates a problem among student where academic results might fall due to financial stress during their studies, leading to lower employability and perhaps at the worse scenario, pressure on welfare programs.

So universal basic income may help public coffers save money on welfare programs.

On the other hand, the average monthly student loan payment is $393 [8]. This seems like a manageable amount for graduates with job security. It could be quite the different story for others but universal basic income at $1083 per month would help resolve this burden.

There are many ways that we can all make college life can be a period of productivity gain, rather than a period of stress and burden. Universal basic income, as well as habits such as re-sell and re-use of things. Mijem is a college app connecting students to enable students to buy, sell, ride, ultimately to earn cash and save money. Having effective programs such as universal basic income and solutions to ease financial stress would do all of us good in the long term.

Sources

  1. https://www.cnbc.com/2017/11/29/how-much-college-tuition-has-increased-from-1988-to-2018.html
  2. https://www.valuepenguin.com/average-student-loan-debt
  3. https://www.forbes.com/sites/camilomaldonado/2018/07/24/price-of-college-increasing-almost-8-times-faster-than-wages/#73f36b3466c2
  4. https://www.forbes.com/sites/camilomaldonado/2018/07/24/price-of-college-increasing-almost-8-times-faster-than-wages/#73f36b3466c2
  5. https://www.pewresearch.org/fact-tank/2017/08/24/5-facts-about-student-loans/
  6. https://www.dosomething.org/us/facts/11-facts-about-college-debt
  7. https://www.pewresearch.org/fact-tank/2017/08/24/5-facts-about-student-loans/
  8. https://studentloanhero.com/student-loan-debt-statistics/