Is college a sucker's game? Billionaire venture capitalist, hedge fund manager, and vocal Libertarian Peter Thiel thinks so.
The co-founder of PayPal - who was among the first to spot the end of the Internet bubble in 2000 and the end of the housing bubble in 2007 - thinks that higher education will be the next overvalued economic sector to collapse.
It's a legitimate question to ask, now that four years of tuition, room, and board can cost $200,000. Even with financial aid, a student often leaves such an institution of higher learning with tens of thousands of dollars of student-loan debt.
So is spending nearly a quarter of a million dollars for an undergraduate degree worth it?
It is, if you buy into the notion that having a bachelor's degree means you are now able to achieve all the dreams of money and success that comes with earning one.
“It's what you've been told all your life, and it's how schools rationalize a quarter-million dollars in debt,” Thiel said in a interview a few weeks ago with TechCrunch.com.
“Education may be the only thing that people still believe in in the United States,” Thiel said. “To question education is really dangerous. It is the absolute taboo. It's like telling the world there's no Santa Claus.”
Thiel may be a bit melodramatic, but he's not so much questioning the value of education as he is questioning why it costs so much to get a college degree. He's bold enough to suggest that, at the current time, it simply is not cost effective to spend that much money on a college education.
Granted, Thiel got his degrees from Stanford and Stanford Law School, and he certainly reaped the advantages of going to a first-rate educational institution. But Steve Jobs, Bill Gates, and Mark Zuckerberg all dropped out of college and went on to start successful, profitable companies.
In the current economic climate, in which people with advanced degrees from prestigious institutions are jobless and stuck with huge student-loan bills that not even personal bankruptcy can wipe out, Thiel is asking whether talented people might be better served by trying a different path.
Thiel and Founders Fund managing partner Luke Nosek came up with an idea called “20 Under 20,” in which 20 of the most talented students that they could find, under the age 20, would receive $100,000 over two years in exchange for dropping out of college and starting a business instead.
They received more than 400 applications and last month, the first group of 24 recipients (they couldn't settle on 20) received their grants.
One could say that these individuals, like Jobs, Gates, and Zuckerberg before them, are the type of bright and motivated go-getters who usually succeed in the world even if they never attend college.
But most people aren't like that. College remains the main pathway into the middle class. On average, a worker with a college degree will earn substantially more over his or her lifetime than a worker without one.
That's why Thiel's argument is only half right.
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Today's four-year college degree is overpriced, and a graduate degree even more so. But the solution isn't avoiding college. The solution is making college the affordable experience it used to be.
In that golden age between the end of World War II and the end of the Vietnam War, our leaders on the state and federal levels made higher education a priority.
A whole generation of veterans - nearly eight million people, or about half of all Americans who served during World War II - received college degrees or specialized training paid for through the G.I. Bill.
The economic impact was considerable. According to historian Ed Humes, 14 Nobel Prize winners, three Supreme Court justices, three presidents, a dozen senators, and two dozen Pulitzer Prize winners got their degrees as a result of this legislation.
Before World War II, few Americans had a college degree. After the war, college went from being an institution reserved for the elite to a democratic institution where success was based on merit, rather than privilege.
It's estimated that the G.I. Bill yielded more than eight times its cost to the federal government, mostly through additional revenues from increased payroll taxes and economic productivity.
The G.I. Bill also helped to create the modern knowledge economy that made men like Thiel billionaires.
The social and economic success of the bill prompted states to spend more on higher education and put the college experience within reach of all who wanted it. The massive government investment in higher education between 1945 and 1975 helped create a prosperous economy and a strong middle class.
Conversely, the massive disinvestment by government in education since then has affected our economy, our global competitiveness, and the stability of the middle class.
Vermont might be progressive in many areas, but it is ranked 48th in funding for higher education. As a result, our flagship university, the University of Vermont, charges $12,000 per year for in-state tuition, which makes it one of the priciest state universities in America.
The in-state cost of a college degree is one reason that our students leave Vermont for their educations - a higher percentage than in any other state.
Vermont may be at the bottom in terms of funding higher education, but it has plenty of company. Over the past three decades, the decline in state and federal aid to higher education has meant that students have had to take out more loans to make up for the ever-increasing cost of a college degree.
People still want to go to college and graduate school to gain the skills and knowledge to succeed in the workplace. The trick is making this experience once again affordable for all.
To make it happen, we need more financial aid for students who need it, and increased state and federal aid to pick up more of the cost of running university systems. These changes will only benefit the economy over the long term.