Sunday, June 23, 2013

Brad Pitt and the Soaring Cost of Education in America

Sometimes we gain perspective from unexpected sources, from a stray remark or a casual observation by, say, a celebrity.

Such was the case with superstar Brad Pitt. In a recent interview, Pitt was asked about the reportedly $7 million he made for waxing (inscrutably) eloquent (launching numerous YouTube and late-night parodies that the actor himself defended as “fair play’) about the wonder of Chanel No. 5 perfume for men.

“It’s the right moment and it’s a classic brand and I have six kids to put through college.”

Notice the second half of the response: “I have six kids to put through college.”

Even a millionaire-many-times-over like Brad Pitt (not to mention his mega-rich superstar partner Angelina Jolie) needs to put away money for the education of his children.

Has anyone ever made clearer the soaring cost of education in America now?

For those short on celebrity details, Brad Pitt and Angelina Jolie have six children so far: Maddox, 11, Pax, 9, Zahara, 8, Shiloh, 7, and twins Vivienne and Knox, 4.

The yearly tuition fee at exclusive private schools, colleges and universities in America is conservatively estimated at sixty thousand dollars. By the time the Pitt kids are all in college, the cost will most likely have gone up significantly, but let’s run with that $60K per year number. That’s $360K per year for all of them. Let’s also say that, on the average, they will each have 16 years of schooling. That takes the total to $5.76 million. Throw in the inevitable “additional expenses” and the figure of $7 million seems just about enough.

In other words, a superstar like Brad Pitt (and more power to him) can take care of the cost of his children’s education by making an ad. As a devoted dad, he can always rely on his earnings from movies and miscellaneous sources if $7 million were to prove “inadequate.” (Again, to keep the calculation simple, this does not take into account any “contribution” from the equally devoted mom, Angelina Jolie.)

So how does this analysis shed light on the reality for millions of students in America now?
More than 38 million Americans currently have outstanding student loans, to the tune of $1.1 trillion. Americans now owe more on student loans than on credit cards and autos! And while mortgage and credit card loans can be shed in bankruptcy, student loans can’t. As parents have discovered to their horror, student loans cannot be discharged even in the death of their children! (The website is filled with petitions from such parents. The very least you and I can do is to sign these petitions.)

It is not unusual for students to take out, say, $40,000 loans to finance their education in for-profit and vocational nursing or culinary or automotive or similar schools. While the federal government loans have interest rates of about 6%, interest on private loans can be anywhere between 12% to 24%. (A fresh nightmare is brewing: federal student loan interest rates are set to double in 30 days from now under current laws. Go figure!)

The real tragedy occurs when students graduate from these schools and realize that the lucrative jobs dangled before them don’t exist. Many end up doing menial jobs that earn, if they are lucky, about $10 an hour. The dreams disappear but not the staggering loans that burden them for the rest of their lives. They become wage slaves, disillusioned and in deep despair, moving from one temporary job to another, without health insurance and without any of the basic necessities required for a life of dignity. Buy a home and start a business? A cruel joke, indeed.

Sounds familiar? It should. The recent housing crisis that devastated families across America seems to have been a prelude to what has befallen students in America. The cascading effect of trillion-dollar student debt is dragging us down on every front, from education and commerce to the economy and the stability of the nation.

Brad Pitt has inadvertently shed light on the exponentially increasing student debt and the cost of education in America. Unless the cost of education comes significantly down (the impact of free Massive Open Online Courses (MOOCs) will not be clear anytime soon) and a way is found to forgive, at least partially, the astronomical student debt, we will continue to lurch as a nation from one Band-Aid fix to another.

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