The Wall Street Journal interviews Peter Thiel today. Thiel, founder of Paypal, has stirred controversy due to a key initiative of his nonprofit foundation. Thiel's 20 Under 20 Fellowship offers substantial financial support to young people who will forgo college to work on a startup that can have a significant social impact. Thiel believes that this "learning by doing" can be more valuable than college for some bright young people. According to the paper, "So far, 64 Thiel Fellows have started 67 for-profit ventures, raised $55.4 million in angel and venture funding, published two books, created 30 apps and 135 full-time jobs, and brought clean water and solar power to 6,000 Kenyans who needed it."
Thiel has attracted many critics, including Harvard's Larry Summers and Stanford's Vivek Wadhwa. What do I think about Thiel's initiative and his views about higher education. To begin, I agree with Thiel's concerns about the amount of debt many families take on so that a young person can attend college. Moreover, I do agree that many universities do not provide enough "learning by doing" opportunities.
However, Thiel should be much more careful about discouraging young people from attending college. Why? First, Thiel attended Stanford. He admits that he would do it again if he had the choice today. It's easy to talk about pursuing other avenues to success, when you have the comfort of the Stanford brand on your resume, as well as the incredible network that comes with being an alumnus of that prestigious school. Moreover, Thiel relies on graduates of top schools to do the legwork for his venture capital and private equity investments. He isn't hiring college dropouts to manage his money! There is more than a bit of hypocrisy here, as we compare actions and words.
Thiel also does not acknowledge that the rate of failure for many startups is quite high, and that students without a college degree then don't have the diploma to fall back on when they fail. Sure, they could always attend college later, but that can be difficult. It's not always easy to attend college later in life when you begin to have family obligations and the like.
The bottom line: Higher education is very expensive, and families are taking on too much debt in some cases. Still, the average college graduate earns far more than the average high school graduate. A select few can build a startup and become Mark Zuckerberg or Steve Jobs, people who built amazing companies without a college degree. Are the odds in your favor though if you pursue their path? I'm afraid not.