Jun
01
2011

Why college is not for everyone

By Katie Kieffer

Peter Thiel. Image credit: “TEDx Silicon Valley – Peter Thiel presentation” by Suzie Katz on Flickr via Creative Commons.

Peter Thiel is rocking the boat of higher education. The libertarian entrepreneur, venture capitalist, and co-founder of PayPal is sending liberal college administrators into a tizzy with his latest push to encourage young innovators to ditch college for two years and pursue entrepreneurship.

Last week, Thiel awarded 20 young people with “20 Under 20” Thiel Fellowships: $100,000 and two years of mentorship to develop entrepreneurial ventures in science and technology.

Thiel’s dismisses conventional wisdom, which says that college is the necessary next-step for success after high school. He understands that conventional wisdom is conventional ignorance now that the American university system is broken.

Today’s students pay bloated prices so universities can hire fleets of non-academic staff to monitor student speech codes, distribute cookies in campus lounges and court elites like Bill Clinton to speak on-campus and warn young people never to believe: “There is no such thing as a good tax…”

Tuition is rising and debt loads are mounting while students at institutions as prestigious as Stanford’s Graduate School of Business are failing to learn basic skills. When Stanford graduate students rely on private coaches outside the classroom to teach them how to write for business, you know higher education is deteriorating.

I took a hybrid route for my own higher education. I went to college and started an entrepreneurial venture at the same time. My path was unique and challenging, so I understand first-hand that Thiel is offering young entrepreneurs the opportunity of a lifetime.

In college, your liberal arts professors may provide you with tips on how to outline your thoughts, but they generally expect that you already know how to give a 10-minute presentation or write a 15-page paper. Meanwhile, your business professors do not teach you how to run a business. Rather, they lecture you on business models, assign you to read case studies and tell you to look for an internship.

Looking back, I realize that I really did not need college. I think many young people do not need college to become successful. The real world lessons I took away from my college experience came from running a conservative student newspaper on a shoestring budget out of my dorm room and from the experience I gained during my internship in commercial real estate.

Today, historic numbers of high-school graduates are going to college. More than ever, parents are pouring their hard-earned savings into college educations for their children.

Venture capitalist, author and parent James Altucher argues that it is irrational for parents to blindly pay for their child’s higher education. New York Magazine reports Altucher as saying: “What am I going to do? When [my daughters are] 18 years old, just hand them $200,000 to go off and have a fun time for four years? Why would I want to do that? … The cost of college in the past 30 years has gone up tenfold. Health care has only gone up sixfold, and inflation has only gone up threefold. Not only is it a scam, but the college presidents know it. That’s why they keep raising tuition.”

It is not cruel and unusual punishment to expect an 18-year-old to finance his or her own higher education. In fact, forcing them to do so could help them decide whether they even need college. My parents told me, “You’re on your own for college.” So, I chose to be a college student and an entrepreneur simultaneously because I had a boatload of self-motivation, I was blessed with an academic scholarship that allowed me to graduate debt-free, and, because I had developed a growing network of accomplished mentors who generously coached me along the way.

Parents, before you feel tempted to write out that six-figure tuition check, consider doing yourselves and your child a favor by honestly assessing the skills that your child demonstrates. If your child thrives within structure or if they want to pursue law or medicine, then college is likely the right path. However, if your child thrives in a creative environment, is self-driven and is constantly innovating, you should consider offering them your own version of Thiel’s 20 Under 20 fellowship as an alternative to subsidizing their college tuition.

Thiel contends that many parents shy away from even thinking about a nontraditional path for their children because they view college as an insurance policy. “I think that’s the way probably a lot of parents think about it. It’s a way for their kids to be safe … an insurance policy against falling out of the middle class. …Why are we spending ten times as much for insurance as we were 30 years ago?”

That’s a good question. More high-school students and their parents should consider whether there is an entrepreneurial, Thiel-style alternative to success before they impulsively jump into college debt.

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Comments...

  1. Kris says:

    Great column. I hope this inspires other young people to pursue their entrepreneurial dreams whether college is part of the route they take to get there or not.

  2. lpwagner says:

    Hi,
    I read this and can’t stand to let it go without rebuttal. For I think every economic indicator suggest the exact opposite of what this article proposes. However, there is a particular problem, what is this article proposing?

    If it is that a particular person should forgo college in order to start a business, we should say no. It is financially irrational to forgo college.

    http://www.bls.gov/emp/ep_chart_001.htm

    Hopefully the link works, it will take you to a chart produced by the department of labor statistics that shows the median weekly income and unemployment rate in 2010 for people ranging from no high school diploma to Ph.Ds. I feel the need to point this out: this statistic includes those people that forgo college to start a business. The fact that those without a degree make significantly less and suffer higher unemployment rates than those with a degree, suggests that those who forgo college to start a business don’t start many businesses or their businesses don’t make a large financial splash. STEVE JOBS IS AN OUTLIER, HE IS NOT THE NORM FOR THOSE WHO DO NOT HAVE A COLLEGE DEGREE! This chart suggests that the financially rational thing to do is get a degree.

    On the other hand, does Ms. Kieffer mean to suggest that we as a country should promote forgoing college in order to start a business? If so, again I must object that such a course of action is counterproductive.

    http://books.google.com/books?id=xy6NjjkHrEAC&lpg=PP1&pg=PA1#v=onepage&q&f=false

    This link will take you to Google books, particularly the book Higher Education and Economic Growth an anthology edited by William E. Becker and Darrell R. Lewis. This book is about the effects of higher education on economic growth of a nation. The editors state on the first page of their introduction “A significant amount of evidence in the economics literature indicates that an investment in higher education is beneficial to both the individual and to society in general.” This whole book seems to present data that higher education significantly increases economic growth. Thus, I suggest that Ms. Kieffer’s position that the country would be better off if more people skipped college and went straight to starting a business is flat out wrong.

    Now, are their non-traditional paths for kids to take? Yes, plenty of them. I’ve a friend that is a plumber. His father started a business, a plumbing business. However, to be a certified plumber one must go through some 5 years of training. That’s kind of like a college degree, is it not? There are also Steve Jobs like people who play around in college for a while, don’t like it; drop out, get what amount to apprenticeships in a field that interests them and go from there. These are not terribly rare, but they are a minority. And, the chart from the department of labor statistics that was presented above suggests that if they don’t eventually get a degree they are more than likely going to make less than their peers.

    What seems clear to me is that college is just the place to start playing around with ideas. College is just the place to think creatively, try new things out. That is exactly what research is! Research is exactly what universities do! Plenty of people have great ideas while in college and drop out to pursue it, Mark, I founded facebook in my DORM ROOM, Zuckerberg is one of them. Or, the two gentlemen that founded Google in their garage while they were pursuing their doctorates in computer science. The essence of college is innovation. Inquire how many businesses are started by MIT graduate students or undergraduate students.

    Last point, Ms. Kieffer has been saying American colleges are broken and mentioning the existence of positions like Director of student life, this would be the above “non-academic staff to distribute cookies”. The problem I have with this is simple: Colleges are a business. Like any business they add value adding positions and eliminate positions that are a drain on resources. Colleges get their money in some funny ways: Tuition, Research grants, donations and government funding for public institutions. If a position, say Director of student life, increases the money the university receives from one or more of those sources, say tuition and donations, by a significant amount more than it increases total costs for the university, through offices, salaries and other costs, why in God’s name would the university ever eliminate that position? You would never tell a company like Ford that they should eliminate a value-adding position like that from their payroll, so why would you say such to a college? Forgive me, but that seems inconsistent with your claims to support a free market.

  3. tsimitpo says:

    An incredibly successful businessman once told me that college was primarily to teach people to be good employees rather than how to run a business. Yet, no matter what kind of “employer” one works for (be it a “boss” or one’s own clients), each of us is ultimately running our own business – the checks that are written out to us.

    There are very few things you can learn in college that you can’t learn any other way. As for cost, most people owe far more for their student loans than entrepreneurs owe for starting their businesses.

    I tend to believe our educational system was set up by people who didn’t/don’t trust (or like) what would result in each individual leveraging their God-given talents to fulfill their dreams. Instead, there appears to be a direct opposition to this kind of loving, free-will design in the objective to churn out uniform and compliant individuals who suppress desires to think for themselves and potentially “rock the boat.”

  4. Peyton says:

    Inspirational column!

  5. Marie Frances says:

    I totally agree with you…but what do you do if your child does not want to listen to you and wants
    to take out thousands of dollars in loans to go to a college? It is tough. However, a lot can be said for
    what you write.

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