It’s been almost four years since former PayPal Chairman and CEO Peter Thiel started the 20 Under 20 program—the controversial initiative that paid 20 college students up to $100,000 to drop out of school.
Basically, Thiel’s initiative hoped to show that the best path to success is not necessarily through education (and its attendant debt burden), but through entrepreneurship and innovation.
While none of the young entrepreneurs that Thiel sponsored back in 2010 have catapulted to success and business stardom, the actual question behind the initiative still seems to be a valid one: Is it worthwhile for an eager and hard-working young person to go into debt for a college education when they have a great idea for a business?
The Case for College
For many of us, going to college is simply what you do after high school. We’ve had it drilled into our heads that getting at least a bachelor’s degree is imperative if you hope to succeed. And we so believe in the worth of a college degree that we are willing to go into significant debt in order to earn one.
As it turns out, we’re mostly right about college. Yes, college costs are spiraling upward at an obscene rate, and graduating with a four-year degree and $100,000 in debt is an objectively terrible position to be in. However, millennial college graduates have a significantly lower unemployment rate than their less-educated friends: 3.1% unemployment compared to 8.1% for those with only some college or a two-year degree, and 12.1% percent for those with only a high school diploma.
In addition, college graduates on average make a great deal more money than those without a degree—the difference between $45,000 and $28,000 per year.
Overall, going to college really does increase your earning potential and ability to find a job.
The Problem with College
Of course, just because a degree will help your career does not mean that college is always the answer. The excessive costs of college are problematic and it is reasonable to ask if an 18-year-old is able to understand the consequences of taking on $100,000 worth of debt.
And as any number of entrepreneurs and employers of recent graduates will tell you, college does not necessarily prepare young people for real world success. Young entrepreneur and college dropout Will Mitchell, who helped to found Affluence.org and created StartUpBros, found that his college classes did not prepare him for entrepreneurship:
“Almost everything I learned about entrepreneurship and business was learned in entrepreneurship and business and not in college…What I really learned in college was how to hold my booze. What I learned out of college was literally everything else I know [and] rely on, not just in business but in politics, economics, sociology, psychology.”
Mitchell’s complaint is hardly rare. Geoff Weiss of Entrepreneur laments the education system’s emphasis on compliance, conformity, and a linear path to success. It’s difficult for game-changing ideas and innovation to thrive in such an atmosphere, as Mitchell discovered.
When to Blaze a New Path
An important point that is often left out of the oversimplified either/or discussion on college and entrepreneurship is that it really does take a special type of individual to become an entrepreneur. As Mitchell puts it, “if you’re going to be an entrepreneur, you have to know that it’s a complete lifestyle. It’s not a profession, it’s not a hobby. It’s a complete mindset. You’re going to think differently than 95% of people you meet out there, and that’s just how it is.”
For the majority of college students out there, the compliant, conforming and linear path through school will take them where they want to go. As long as college students recognize and plan for the potential financial pitfalls of their education, there is no reason not to follow the well-trodden path.
Becoming an entrepreneur also has myriad pitfalls, not the least of which is that your startup could fail, as 75% do.
But the sort of person who has the passion to turn an idea into a business will likely be able to follow through no matter the circumstances. That’s true whether they are 18 or 81 when they decide to become an entrepreneur.