I came across an article that wrote about a billionaire, Peter Theil, who thinks dropping out of college is a good idea. In fact, he runs a program which actually pays young people to do it in exchange for an engagement into a full-time business.
John Wilson describes: “The Thiel Fellowship recruits college students aged 20 and under to drop out of college and focus on building a business for two years. Twenty-four were chosen and will have $100,000 each to invest in their ‘business.’ Thiel believes that one of the consequences of our society’s allegiance to higher education is ‘the enormous amounts of debt it’s putting on people is actually constraining people’s ability to do things that are not as remunerative.” Read Wilson’s full article.
Thiel, in an interview describes his program:
“Well the term we use is that people should stop out of school for two years. The program is called “20 Under 20.” It’s under www.20under20.org. The one advertisement I will get in here. And it is a two-year fellowship program where we will pay people $100,000 for two years to pursue some particular passion, preferably in a technological area where they can work individually or in a team of up to four people in starting a company or joining some other early stage company. We will encourage people to do this from California because that’s where we think we can help provide them with some mentorship.”
Although Wilson largely agrees with Thiel’s assessment, he argues that
“Programs like these won’t help fix the problems of college debt, college unpreparedness, or lack of entrepreneurship.”
Within the context of Thiel’s program and advocacy, I think it is interesting to see the reasons why halting college education does not necessarily offer a viable option for future security.
Reasons not to drop out of college to start a full-time business
1. College still Guarantees a Great Investment
It is hard to ignore the numbers. College graduates earn far better than high school grads for one obvious reason – there are better opportunities for the former than for the latter. In a comparative assessment between high school and college graduate using government data, High School Education points that:
“The mean income earned by high school graduates was about thirty one thousand dollars in 2007. This estimate was roughly twenty six thousand dollars less that the salary earned by a person who has graduated college, according the U.S. Census Bureau. Over the course of about 45 years working, that would amount to about a million dollars. Even having a two year associates degree means that you would be making about one hundred and eighty thousand dollars more than a high school graduate.”
Although starting up a full-time business is a wonderful idea, it is still wise to invest in higher education for some safety margins or a fall back in case the business fails. Starting up a business does not necessarily translate to immediate success. According to the Small Business Administration, 50% of small businesses fail in the first five years.
In addition, Wilson explains: “There are a few reasons why young entrepreneurs cannot build a business while in school. Plenty of entrepreneurs have done it and continue to do so. One such entrepreneur is Tayo Ola, a senior at Kean University in New Jersey, who co-founded Supreme Team Entertainment Group, an event planning business, during his freshman year. ‘It is always important to have a backup plan in case if anything happens,’ Ola said by email. ‘A degree and education have been always important in any aspect of life.”
2. Dropping out of College Will Not Be Beneficial to the Middle or Lower-Income Students
Wilson points out that one of the flaws of Thiel’s proposition is that “Thiel’s endeavor doesn’t seem to be focused on middle- or lower-income students — even though a lack of entrepreneurship being taught in colleges and students facing crushing loan debt after they graduate, are afflictions that disproportionately affect that segment the most. Apparently, the Thiel fellowship is just another option for well-heeled students who can afford to drop out or leave school for two years. But in the real world — outside of his Silicon Valley bubble — students are actually going to school so they can get a job and support themselves.”
It is easy to romanticize on the idea of a drop-out-turned-billionaire, but one thing that needs to be taken into account is the income of the family in the background. As Wilson cites:
“But what they fail to say is that folks like Zuckerberg had wealthy parents to fall back on. So did Bill Gates.”
Starting and running a business is a great endeavor; however, it is not for everyone. There are certain elements in a business that every individual should take into consideration even before embarking into one. Yes, everybody can be a business owner, but not everybody can be a successful business owner. While there have been quite a number of success stories of individuals who made it big time without completing college education, I still believe that getting into college makes a good investment for better security in the future.