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Students get big payday for skipping school
A book, apple, and $100 dollar bills represents the costs of U.S. education.
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Kai Ryssdal: We mentioned PayPal up at the top of the broadcast, and we're going to reference it again here. Peter Thiel was one of the co-founders of the bill-paying site. That makes him a billionaire, and something of an iconoclast.
Thiel thinks higher education in this country is overpriced and overvalued. I'm telling you this because, to prove his point, his foundation is paying 24 of our best young students $100,000 apiece not to go to college for two years and start businesses instead. The experiment -- not to mention the soaring cost of a college degree -- is creating a lot of debate in education circles, and among two of our reporters as well.
Amy Scott is our education correspondent. Steve Henn covers technology for us from Silicon Valley, land of the superstar college dropout. Guess who's on which side.
Steve Henn: Most of the fellows are pretty excited about this. I talked to John Burhnam. He's 18 and he's skipping his own high school graduation to get started. This summer, he's interning at MoonEx, which is a private space exploration company.
John Burhnam: There's an incredible amount for me to learn, and I'm swimming in an ocean of information. I feel like a kid in a candy store.
Burnham's sketching out a business plan to mine rare minerals from asteroids and the moon --
Amy Scott: Wait, what?
Henn: And then fly them back to earth.
Scott: Steve, this sounds a little crazy. This guy wants to drop out of college to mine the moon?
Henn: Basically, yeah. And you know, it might not work. But I think Thiel just wants to show that bright, motivated kids don't have to go to college. They can innovate or learn in other ways.
Scott: Sure, if someone pays you $100,000 not to go to college. But what happens to Space Boy when the money runs out and he's left without a college degree?
You know, Thiel isn't the only one worried about innovation in the economy. I called Judy Estrin. She a tech entrepreneur and just wrote the book, Closing the Innovation Gap. She says the Mark Zuckerbergs or Steve Jobs or Bill Gates of the world are one in a million.
Judy Estrin: It's like saying, I'm going to drop out and become a rock star. And how many musicians do you know that don't ever make it to be a rock star?
Plenty.
Henn: But there might be a rock star in this bunch -- these kids are incredible. And the kids I've talked to have said, if this doesn't work out in a year or two, they can always just go back to college.
Scott: Thiel wants lots of people to do this. That's the whole point. He's egging on this growing chorus of people wondering whether college is worth the money.
Henn: Yeah.
Scott: But for most people, it is. The typical person who just finished high school makes about $20,000 less a year than someone who went to college -- and is twice as likely to be unemployed.
Henn: But that's just because employers are fixated on college degrees.
Scott: Well they want college-educated workers. Listen to this guy. His name's Mike McPherson, he's an economist and former president of Macalester College.
Mike McPherson: I think there is really what I would call the strongest consensus among economists that you can find on any subject that college pays.
Henn: But it doesn't pay for everyone. You know Amy, you probably know these numbers better than I do. Right now, there are $1 trillion in student debt out there. And students whose educations don't pay off for them, can't just walk away or declare bankruptcy to get out from under it. And the costs of college tenfold since the '80s.
Scott: Yeah, but you are talking about the sticker price of college, which most people don't actually pay. Financial aid has been rising at the same time.
Henn: Still, something like one-third of all students who start a four-year college don't get a degree after six years. You know, I don't think college pays for them. This is still supposed to be the ticket to the American dream for everyone. You know I think Thiel just wants everyone to question that. Here, I'll let him speak for himself.
Peter Thiel: We no longer believe in housing; we no longer believe in technology. We have faith in very few institutions, but probably education is one thing we still have an almost manic or desperate belief that this is the ticket to the future, and that you should get an education no matter what the price. That makes it very dangerous.
Scott: OK, there's no question that debt is a huge problem, especially if you don't get a job right away, or a good-paying one. But you know, Steve, there still are lots of non-economic reasons to go to college.
Henn: Yeah, like keggers.
Scott: Well like learning, or college grads report bring happier. They're more satisfied with their jobs. They're more likely to vote. And you know, it may not be fair, but the truth is, in many ways, higher education is a ticket to success in our society.
Henn: But it shouldn't be the only ticket and it definitely shouldn't be this expensive.
Scott: Pretty good debate, Steve. You learn that at Wesleyan? And by the way, Peter Thiel went to Stanford.
Henn: Yeah, true.
Ryssdal: Amy Scott, Steve Henn. You can weigh in here and learn more about the fellows in Amy's and Steve's blog post.
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Mine is an old story but relevant. I went to a small, exclusive, private high school for girls. Admittance required an entrance exam much like the SAT. It was strictly college prep. The only non-academic course offered was typing and the reason for that course was so we could type our college papers. I have a B,A, an M.A. and an M.S.W. My husband was a professor at a major university. My 4 oldest kids all went to college because that's what was expected. Two have post-grad. degrees. When it came time for my youngest to decide on a college, he opted not to go in spite of being admitted to one of the most exclusive schools in the country. He's a musician and felt he could learn more of what he wanted to learn by playing music. The college discussion was over when he looked at me and said "Mom, you have 3 degrees and can't find a job. Now tell me again why I should go to college." My kids are smart and ambitious. One is a lawyer, one an artist, one a VP at a well-known ad agency, one a university librarian. My son is an amazing musician. He attended a prestigious summer program for professional musicians on scholarship. My first two degrees were in theatre and dream was to be a professional actress. I had scholarships and grants and also a whole lot of student loans. I did summer stock and worked in a variety of semi-professional theatre companies. Then I married a man who had a tenured teaching position, choosing him over my dream. Instead I settled for community theatre. I wanted my son to follow his dream, maybe in part because I didn't, but mostly because I understood his dream. And I had no answer to why he should go to college, since i had just completed my M.S.W. and couldn't in fact, find a full-time job.There are many reasons for that, one of which was a recession. I did work in several places as a contract employee. I don't for a second regret my college experiences but I've basically spent my life working at jobs for which I didn't really need a college education.My son, now 32 and newly married, is taking classes at a community college in preparation for an eventual post-graduate degree. Sadly, due to an excellent public school education, he's not learning anything, just marking time getting the requirements of the first two years out of the way in the least expensive way. He continues to play, write and teach music. I have one granddaughter with no plans for college. Like so many young people, she's questioning the value of it. Another is headed to Harvard, and one plans to become a hair stylist. My 5 other grands are too young yet. My family supports the kids in whatever decision they make.
One supporting argument to Steve's position: the correlation between a college degree and higher future earnings doesn't imply CAUSATION - though Amy's comments (and many others over the years) seem to imply that it does. But as often in these types of examples, there's a third factor at work causing BOTH the degree and the higher earnings: simply that the two pools of people are different. There's every reason to think that the group of people pursuing degrees are smarter (or richer, or more ambitious, or more disciplined, or more organized, or some combination of these traits) and thus would earn more over their lifetimes anyway. [Note that possession of any of those traits in greater quantity than people in the noncollege group is NOT a commentary on their inherent worth as humans! :-)]
Point: No one has mentioned that the year the young man spends trying to mine the moon, he will be getting direct hands-on experience in developing his skills, completing a submission of some kind, and selling the value of his work to his prospective buyers.
Counterpoint: As for job-jobs, recent statistical analysis of joblessness has discovered that those who are remaining unemployed are those without college degrees.
I have been thinking about this for sometime now. And I say this as someone who is third generation college grad. My 109 year old grandmother had a Master's degree. I think that we are missing the mark on this issue. Education is important, but education in all its senses of the word. Too much of our high school education has become a vain attempt at getting kids to memorize information so that they can take standardized test. No attempt has been made to marry the practical with academic knowledge. This is a big mistake. Innovation comes from this marriage. It is a creative process. We are taking this out of our education. I think we need to be very careful about we are saying about value of the college education. There will many, many plumbers who will make a whole lot more than college grads who spent 4 years and spent alot of money. What we need to do as a society is to start realizing that all types of labor have value. That we should start implementing apprenticeships into all high schools. even for those who are going to college. I find it frustrating that the kids who are fortunate enough to go Thomas Jefferson School for Science and Technology (one of the top HS) in the country get to take a auto shop class where the science and mechanics are combined. I think that one of the reasons kids don't like science and math is because they are taught in a way that is not connected to the world.
For those that are interested, I have my own take on the arguments for and against the fellowship, and education in general on my blog, http://www.akiselev.com/
Interesting debate. I think Peter Thiel is missing something though, if he's looking for the next Zuckerberg, Jobs, Gates, Dell, etc. Most, if not all of these guys are college drop-outs, not PRE-college drop outs. As in, perhaps there was something in school that contributed to their success that they wouldn't have access to otherwise. Like other talented people, like Wozniak or Paul Allen? or financing contacts? Further, entrepreneurship is hard, not for everyone, and the best student does not necessarily make for the most successful entrepreneur either.
surprising that in the debate about costs of college education, nobody - not even the PayPal guy - explicitly mentioned the immense opportunity costs. 4 years of work experience plus income and interest earned on the accumulated savings give a significant head start to those who opt to forgo college. Perhaps if the "Everyone Must Go To College" propaganda was refuted more vigorously, the college drop-out rate would fall precipitously, as low-achievers self-selected out of failure.
I am from India and I am here in US since last couple of years. I was literally suprised when I realized that people here think education is an optional. Back in India it is not even an option to think 'whether I would go to school/college or not.' I know people talk about Steve Jobs / Bill gates and all other people but why don't they talk about other CxO who went to very prestigious colleges to reach where they are. You are only talking about only few people who succedded w/o going to college but not about remaining hugh pool who went to college and reached to Cxo position.
And yes I know student debt is very big problem but shouldn't the parent support their kids upto college so that they can concentrate on study rather then paying their debt ?
Even if we say 5 students are sucseeded ( which is very large number) out of these 24 what about remaining ? They lost probably 2 years of their life at very crucial junction.
I believe if parents can support their kids during their education that will change lots of things for positive.
I am a board certified psychiatrist for teenagers and adults. I agree that college education can open doors for some but our current model is insane and too expensive. For many kids it can close the doors for innovation as they come out with big loans and big pressure to follow the conventional track to pay for those loans. I am shocked to see how little time they spend in actually teaching even at the best of colleges. I see so many people after high school going to community colleges just to get "gen ed" out of the way. They don`t have any aim or ambition to go to college but they go as every one else is doing the same.
I think they should teach more skills in High school and prepare kids for a real life so that they can have a life without a college degree. If someone wants to go to college, they should be able to finish it in 3 years. Not every one needs three months of summer and two months of winter break. Do we get that much time off at our work?
As a former university instructor, I cannot agree more with the notion that college is not for everyone. Why do we think we are helping students by pushing them through the course? Instructors give open book tests, take-home quizzes, etc. just so the students pass and the university collects tuition. Why do we allow former military using the GI Bill to continue to earn a monthly tuition allowance even when they fail courses?Their incentive is to fail the course so they can continue to earn.
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