Monday, April 11, 2011

The Brightest Bulbs Skipping College

I played golf yesterday with some random guy. He has a daughter attending her 5th year of undergraduate studies at some no-name school in Ohio. Tuition with room and board is $48,000 per year and she's majoring in....drum roll....ENGLISH LITERATURE!

$200,000+ for that? You've got to be kidding me.

(There were no student loans, this was a full-boat, cash-out-of-pocket situation from a guy who lamented that he was one of the *poorer* people in his neighborhood - Great Neck, NY - and that there were *two Hondas* in his driveway.)

I flat out told him it wasn't worth it.

Self-JustifyingWaster - I think that you can't get anywhere without a degree...

CaptiousNut - What about Bill Gates, Michael Dell, and Steve Jobs?

Self-JustifyingWaster - But that was a different time. Nowadays you can't do that.

Really? With the explosion of the internet and the globalization of the economy....does he really think that aristocratic credentialism reigns?

Of course he does. Without believing such a fable he couldn't bring himself to write those tuition checks.

Deeply skeptical of the overall merits of *higher education*, PayPal Billionaire Peter Thiel is launching a small guerrilla attack on the edu-establishment:

Thiel’s solution to opening the minds of those who can’t easily go to Harvard? Poke a small but solid hole in this Ivy League bubble by convincing some of the most talented kids to stop out of school and try another path. The idea of the successful drop out has been well documented in technology entrepreneurship circles. But Thiel and Founders Fund managing partner Luke Nosek wanted to fund something less one-off, so they came up with the idea of the "20 Under 20" program last September, announcing it just days later at San Francisco Disrupt. The idea was simple: Pick the best twenty kids he could find under 20 years of age and pay them $100,000 over two years to leave school and start a company instead.

Two weeks ago, Thiel quietly invited 45 finalists to San Francisco for interviews. Everyone who was invited attended– no hysterical parents in sight. Thiel and crew have started to winnow the finalists down to the final 20. They’ll be announced in the next few weeks.

While a controversial program for many in the press, plenty of students, their parents and people in tech have been wildly supportive. Thiel received more than 400 applications and most were from very high-end schools, including about seventeen applicants from Stanford. And more than 100 people in his network have signed up to be mentors to them.

Thiel thinks there’s been a sea-change in the last three years, as debt has mounted and the economy has faltered. "This wouldn’t have been feasible in 2007," he says. "Parents see kids moving back home after college and they’re thinking, ‘Something is not working. This was not part of the deal.’ We got surprisingly little pushback from parents." Thiel notes a handful of students told him that whether they were selected or not, they were leaving school to start a company. Many more built tight relationships with competing applicants during the brief Silicon Valley retreat– a sort of support group of like-minded restless students.

Of course, if the problem Thiel sees with the higher education bubble is elitism, why were so many of the invitees Ivy League kids? Where were the smart inner-city kids let down by economic blight and a failing education system of a city like Detroit; the kids who need to be lifted up the most? Thiel notes it wasn’t all elites. Many of the applicants came from other countries, some from remote villages in emerging markets.

But the program has a clear bias towards talent, and like it or not, talent tends to be found in private universities. Besides, he’s not advocating that stopping out of school is for everyone any more than he’s arguing everyone should be an entrepreneur. But to start a new aspirational example– an alternative path– it makes sense to start with the people who have all the options. "Everyone thinks kids in inner-city Detroit should do something else," Thiel says. "We’re saying maybe people at Harvard need to be doing something else. We have to reset what the bar is at the top."

That hints at another interesting distinction between the housing bubble and the education bubble: Class. The housing bubble was mostly a middle-class phenomenon. Even as much of the nation was wrapped up in it, there was a counter narrative on programs like CNBC and in papers like the Wall Street Journal pooh-poohing the dumb people buying all those condos in Florida. But with education, there’s barely any counter-narrative at all, because it is rooted in the most elite echelons of the upper class.

Thiel assumes this is why his relatively modest plan to get 20 kids to stop out of school for a few years is so threatening to a lot of the people who have the biggest megaphones to scream about it. "The people who are the most critical of this program are the ones who are most complacent with where the country is right now," he says.
There's not much to disagree with in there - though there're certainly a few little points where Thiel is slightly off.

Of course *homeschooling parents* are already doing this and their kids are far more advanced than the crop that decides to opt-out of Big Education when they are 18-19.

Add Peter Thiel to that ever-growing list of famous self-unconscious homeschooling advocates.


Anonymous said...

Interesting thoughts.
On another vector, it seems ludicrous to pay so much money to attend [some university] when lectures could be recorded and podcast. In fact, it wouldn't take long for some of the very best to be found and distributed.
There is something to be said for f2f interactions but really how much of that is there in classes with hundreds of students?
Many tech companies have distributed teams who sync up via email and frequent conference calls with only the occasional f2f meeting.
Universities could do this too but it would be a tectonic shift for them ...

Justin Time said...

Yeah, I think it has reached the tipping point where people who can do math are looking at the ROI and considering alternative strategies.

Of course, much like the housing bubble, the clueless lemmings continue to buy into it no matter what the cost.

It will be interesting to see how the cultural shift to where the parents have become responsible for picking up the tab plays out.

I have a feeling that many of these people don't have 2 dimes to retire on--never mind pay for 2 kids to get General Studies degrees.

Anonymous said...

Justin Time,
There's another factor at work: there is heap plenty govt assistance for a large fraction of the population. Result is that $25K per year to attend (e.g.) UCLA, Berkeley, et al is effectively $5-10K per year for a very large fraction of the students.
I can't help thinking that is one of the big reasons for the high price of "higher" education.

Anonymous said...

It depends on what you want to do. Some occupations are protected by credentialing which means you need to go to college (whether or not its a rip off or not). If you plan to be a entrepeneur, then college is most likely overrated if you know how to read and can find a good mentor.

CaptiousNut said...

As with plasma TVs and whatnot, rich people/parents *subsidize* the college education of poor/working class students by paying full-freight tuition.

Of course when these same people subsidize technological innovation....the price drops.

Obviously that's not the case with education. And it isn't because the taxpayer subsidy (which is also a redistribution from the working wealthy) is still eclipsing the few wealthy parents who are deeming college not worth the sticker price.

Anonymous said...

FYI: Recently, I've noticed your blog loads extremely slow. I think it is due to all of the YouTube videos. I wonder if others have noticed this?

Justin Time said...

College expense is one thing, but what do you think of the new trend to supply every public school kid with a brand new MacBook, as is being done in Natick, or to give all kindergartners iPads like they are doing in some town in Maine?

CaptiousNut said...


Every time I glance at a local paper I read about some school incorporating iMoron technology.

I guess they are just pathetically trying to stay cutting edge.

Meanwhile they should be bringing back classes on rhetoric, Latin, and geometric construction...

CaptiousNut said...


Loading slow, huh?

Well the *experts* tell me I have to watch that as Google will penalize me.

I do have a lot of pictures and show a lot of posts (30) on the front page. The experts tell me to truncate each post with an annoying *read more* link. Whatever. I do listen to them but I have to do my own thing in the end.

I just ran a test and it came back with 12.3 seconds of average load time for my site.

I'm going to check with Google now.

Thanks for letting me know.