Last month, I wrote a post on "Is Going to College an Economic Mistake?" that discussed the rising costs of a college education and the diminishing returns of achieving an undergraduate degree, especially if one has to go into great debt to finish the program. In that post, at least one financial adviser said that children would be better served if parents gave them $10,000 to start a business instead of paying college tuition, which would give them much more practical knowledge and experience and would, if they went to college, make their time there much more focused and valuable. The number one question I got from friends who had read that post was, "Well, great, but where am I going to get $10,000?"
Here is one possibility.
Peter Thiel, who is currently a hedge fund manager and venture capitalist, but is most famous for being a co-founder of PayPal and an early investor in Facebook (he is portrayed in the movie "The Social Network" by CSI's Wallace Langham), has established a new grant program for entrepreneurs. Called the Thiel Fellowships, Thiel is offering up to $100,000 to 20 individuals or teams (up to four people) under 20 years of age who want to pursue their technology-based entrepreneurship dream rather than go to college.
Most of the opinion pieces I have read about this program excoriate this grant program for distracting young people from college and promoting Thiel's capitalistic vision. But to be fair, that might be due to my own biases in websites and reading materials, given that Mr. Thiel is an acknowledge ultra-libertarian and I am....not. And I have to say that I don't necessarily agree that this is a terrible program.
For one thing, the Thiel Fellowships are targeted towards only 20 projects, or a maximum (if every project has the maximum number of participants) of 80. Given that there were a record 2.6 million students in U.S. higher education in 2008, that is only a drop in a drop in a drop of the bucket of college students. I don't think the Thiel Fellowships are going to dissuade any significant number of students from attending college.
But I do think that the Thiel Fellowships is an acknowledgment of something that we as parents as well as citizens as well as policy makers don't like to admit--that college isn't for everyone. So do I want my son to go to college? DEFINITELY. But if we get there and that's just not the right path for where he is in his life journey, then I think I need to let go of that. Because in the end, it is his life, not mine. And if he happens to be one of those advanced thinkers who has an idea that could transform life as we know it---like Apple Computers did, or Microsoft did, or Dell Computers did, or Google did--then this program, with not only money available, but also access to mentors of the caliber or Thiel and his associates, might be exactly what is needed. To me it looks like kind of a MacArthur genius grant for young entrepreneurs.
I am particularly persuaded by what Thiels says is the motivation behind the grant. In the video in which he announces the program (around point 15:20 on the linked video), Thiels says he established the grants because he is afraid that the increased debt that college students are taking on in order to complete college are reducing their ability and/or willingness to take the kind of risk it takes to create break-through technology that is needed to solve societal problems like alternative energy or the next level of computer applications. Again, I think he is probably right in that assessment.
So I'm not concerned about 20-80 students a year receiving money to receive an education in hard knocks instead of in the Ivy Tower (as much as I loved that time myself). Actually, my real hesitation is that this may not not really a grant program at all, but a way for Thiel to cull the brightest thinkers and to get to invest in whatever is the NEXT Facebook or PayPal or whatever.