U.S. Education Bubble Is Not Worth the Debt and the Opportunity Costs
Youth Unemployment Poll Casts Doubt on ‘Skip College’ Advice
April 22, 2011The Lookout - Even as entrepreneurs and intellectuals have been debating whether there's an overpriced "higher education bubble" in America, a new AP poll sheds light on how young people with only a high school education are suffering in the job market.
Just 40 percent of 18-to-24-year-olds surveyed who entered the job market with only a high school diploma have a job right now. About 75 percent said they worried about having enough money to make it week to week.
The unemployment rate for high school grads under 24 was at 10 percent in March 2007, before the recession hit. For the past three years, the figure has been at 20 percent.
But for young college graduates, unemployment is only at 8.5 percent.
These stark numbers help to ground a conversation taking place in the National Review and The Economist, among other publications, about whether higher education is currently overvalued in America. PayPal founder Peter Thiel argued that higher education is a "classic" bubble because it is both overpriced and something that commands fierce—even unquestioning—devotion. Thiel is starting a program to encourage bright kids to drop out of college and start businesses.
Thiel's also not the first to make the case that higher education is overvalued, as average college debt has soared over the past few years to nearly $24,000. In fact, 75 percent of those surveyed by the AP who did not attend college cited cost as the main reason. (A recent study found that the crisis in college affordability mainly affects the nation's poorest kids, and threatens to price them out of higher education.)
As the AP poll reminds us, if you're a 23-year-old with a high school degree who is unemployed and worries about having enough money to survive, the hard numbers correlating employment and higher education are probably more compelling than the opinions of wealthy tech entrepreneurs.
Check out the chart, below (via The Economist), showing wages and unemployment by education level in 2009.
(Thiel says skip college: AP)
Atlantic Wire - Peter Thiel wants to burn down Harvard. Okay, that's an exaggeration, but maybe not one Thiel would mind.
Thiel, the co-founder of PayPal and angel-investor in Facebook--Wallace Langham played him in The Social Network--would like Americans to seriously rethink the value of higher education. He thinks we have an education bubble right now, the way we had a tech bubble and a housing bubble. We believe fervently in the value of education, but our faith may be misplaced. Look at all these college graduates moving back in with their parents, kneecapped by student loans.
Thiel doesn't think it has to be this way. He's starting a new investment program called 20 Under 20, where he'll find 20 promising teenagers and pay them $100,000 to start a company instead of going to college. Thiel announced the existence of 20 Under 20 in September, but he talks about it a lot in a recently published interview with TechCrunch, so it's on people's minds again.
Does it make sense to give kids a hundred grand and tell them to skip college? Pascal-Emmanuel Gobry at Business Insider is all for it. Gobry recounts his own somewhat staccato path through college, law school, and business school, and admits that it may not have been "worth the debt and the opportunity costs."
Had he not gone to school, he writes, "something tells me Business Insider would have hired me regardless."
Less sanguine about Thiel's plan is Marion Maneker at The Big Picture, who notes that Thiel's efforts may be misguided.
"Why doesn't Thiel make it possible for anyone who wants to go to Harvard to be able to do it?" Maneker wonders. "Wouldn't it be possible given the backing of the right kind of successful and smart people to make a superb education both more affordable and effective?"
Whatever the merits of Thiel's program, Nitasha Tiku at New York points out that he probably won't have a hard time appealing to the kids.
"Who will the next generation of entrepreneurs listen to?" writes Tiku. "Their folks or the dude whose San Francisco manse comes equipped with a butler?"
Maybe Thiel could split the difference and look into setting up a degree program in entrepreneurship--something that "Dilbert" creator Scott Adams called for in The Wall Street Journal this weekend.
"I understand why the top students in America study physics, chemistry, calculus and classic literature," Adams wrote. "But why do we make B students sit through these same classes? That's like trying to train your cat to do your taxes—a waste of time and money."
Instead, he says, we should be preparing kids to get out there and "master... the strange art of transforming nothing into something." But it should happen in a classroom, he says--so maybe this is something he ought to take up with Thiel.
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