I posted on Fast Company a little bit ago debunking the idea of an education bubble. People seemed to like the post. I again posted today on Fast Company about Peter Thiel’s 20 under 20 program. Thiel, one of the most vocal advocates of the bubble, is putting his $ where his mouth is, paying 24 young and by most accounts brilliant entrepreneurs $100K to drop out of college and pursue their dreams. Lots of people read the post.
I am on an email list with some nerdy friends (a few neuroscientists, a few public interest lawyers, a few doctors, a video game artist, etc) and one asked me a bunch of questions about Thiel today so I figured these ideas continue to be of interest.
Here’s what he wrote:
Anya, can you speak to Thiel’s assertion that a college degree is no longer a surefire job guarantee? His spin on the bubble seems to be less about the whether or not education is valuable, but more about the value as it relates to, basically, working after college.
Can you also speak to his assertion that tuition rates are inflated, in part to simply look expensive and therefore valuable?
Here’s what I wrote:
-can you speak to Thiel’s assertion that a college degree is no longer a surefire job guarantee?
I would say that on average, for most people, a college degree is still a necessary, but not by any means sufficient, qualification for a decent job.
The *relative* return on a college degree is substantial, but its growth since the 1970s is due to the downturn in incomes among those who do NOT have a college degree. (AKA: I’m not any taller than I used to be, but my sister shrank, so the difference between our heights is more)
Here’s the graph: 
The bitter pill to swallow is that while the return on college has failed to increase in a generation, the cost of college has grown substantially–is now saddling 66% of graduates with average $24K in student loan debt. So college is a much worse deal now for more people than it was when Peter Thiel graduated from college.
And yes, I absolutely agree with him that college tuition is overinflated for a million reasons. (DIY U Chapter 3 if you’re curious, or you can flip through this slide deck )
All of this is intensified in the current recession, which is bringing historically high unemployment rates for college grads. The Times reports about a fifth of recent grads are unemployed and another fifth are working in jobs that don’t require a degree.
Yet since the education demands in our economy continue to rise,(David Autor at MIT is good on this topic, or the Georgetown Center on Education and the W0rkforce) it doesn’t follow that college is going to go by the wayside. What I see happening instead is increasing pressure on the marketplace to produce affordable quality forms of college–http://www.straighterline.com/ is a pioneer–and more intriguingly, the emergence of more specific, practical, modular forms of qualification for careers that combine some aspects of assessment, portfolio, and reputation based networks. Github and Behance are the two examples I always use.
