President Barack Obama fielded questions today from Americans in an interview organized by Zillow’s CEO Spencer Rascoff.
His answer to a question from a recent college graduate should be gut churning for Millennials to listen to.
The question of interest was from a recent grad who is still stuck living with his parents, a situation endured by one in three Millennials. He wanted to know what the president planned to do to help his generation.
“We need more affordable, quality rental housing,” said the President. ”Jacob looked like a pretty young guy, renting is probably the best option.”
Then, he correctly said “What for their parents would have been the down payment on a home right now is going to service their student loan debt. ,” an observation that I can personally attest to.
Great, one might think. So what do we do now?
The president then pivoted to his suggestions for student loan reform, and, even more perplexedly, immigration reform.
“If we get immigration reform done, suddenly you’ve got all kinds of families coming out of the shadows,” which the President argued would help to raise the cost of real estate.
Which, by the way, is the opposite of what our Millennial questioner really wants. How, precisely, does more expensive real estate aid young renters screwed over by student loans seeking affordable housing?
But let’s first look at the student loan proposal that the President said should give that young professional faith.
You can read the whole proposal here. It would limit payments to 10% of income, forgive debt that remains after 20 years (10 years for nurses, teachers and military folks), and give out more Pell grants.
But here’s the thing: None of that affects the people who already have student loan debt.
The key caveat is that it only affects students enrolling in 2014 or later.
Are you in college or recently out of college? Are you one of the many, many millennials who retreated into grad schools instead of braving a failing or mediocre economy? Well, you’re out of luck then.
This isn’t a small segment of the economy, either.
Roughly 10% of the country is in the age bracket of a recent college graduate, according to the Census. These are people aged 21-26 years old, with college graduation years somewhere between the economic wasteland the 2009 graduating class walked into and the economic “meh” the forthcoming 2014 graduating class is about to join.
So when the president is asked by a member of this huge segment of the American people what he hopes to do with them, then goes on to acknowledge the fact that this is a problem, but then states his proposals to fix two other problems that don’t help this 10% in any way, shape, or form, that cuts somewhat deep.
And the striking answer is the President doesn’t actually have a solution for this problem at all.
It’s understandable that he wants to fix the problem — crippling student loan debt — at the source, which I imagine is potentially great for my younger sister, someone currently looking at schools.