St. Paul, Minn., expands guaranteed basic income to address college savings

The Minnesota city of St. Paul is looking to combine the federal funds it received during the COVID-19 pandemic with private donations to expand its guaranteed basic income program for struggling families.

Pending city council approval in July, the $4 million in coronavirus relief grants, plus $1 million from philanthropists, will go to 666 families eligible for the next phase of the city’s income program called College Bound Boost, the Twin Cities Pioneer Press reported.

A family must be enrolled in College Bound St. Paul — a personalized college savings account program created by the city over two years ago — and have an income of no more than three times the federal poverty limit to be eligible for College Bound Boost.

In the new program, half of the families will get $1,000 added to each of their children’s College Bound St. Paul savings accounts, while the other half will get the same $1,000 for college, as well as two full years of monthly $500 checks, according to the Pioneer Press.

The newspaper said the city will compare the outcomes of those two groups of families against a control group that is a part of College Bound St. Paul but receives neither the $1,000 nor the $500 monthly checks.

The Department of Health and Human Services adjusts federal poverty levels according to family size, so for a family of two the poverty level is $17,420. For a family of three, it’s $21,960, and for a family of four, it’s $26,500.  

The program would likely start at the end of August, the newspaper reported.

St. Paul Mayor Melvin Carter and the City Council have been committed to basic income programs for some time. 

The Pioneer Press reported that both the mayor and the council helped launch the People’s Prosperity Guaranteed Income Pilot in November 2020. 

That pilot program combined $300,000 in federal coronavirus relief grants and $1.2 million from donors in order to provide no-strings-attached payments of $500 a month to 150 low-income families over the course of a year and a half.

An evaluation of the impact those monthly checks had on the first 150 recipients hasn’t been completed, according to the newspaper.

The Pioneer Press said that the newest program will be assessed by University of Michigan professor William Elliott, who worked with the city since its 2020 launch of College Bound St. Paul.