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Billionaire offers college alternative

Billionaire Peter Thiel's program to pay students with promising ideas to drop out of college is attracting students and critics. Morley Safer reports on Sunday, May 20 at 7 p.m. ET/PT.

(CBS News) A billionaire's program to pay students with promising ideas to drop out of college and develop those concepts for the good of all is attracting students and critics. Internet business pioneer Peter Thiel thinks his program is a viable alternative to what he sees as a largely ineffective university system where costs far outweigh benefits. But others say Thiel's program, "The 20 Under 20 Fellowship," which pays $100,000 each to at least 20 students each year, is an elitist ploy that only encourages others to drop out or not attend college at all. Morley Safer takes a look at the controversial program and the increasingly expensive university system that helped spawn it on 60 Minutes, Sunday May 20 at 7:00 p.m. ET/PT.

"We have a bubble in education, like we had a bubble in housing...everybody believed you had to have a house, they'd pay whatever it took," says Thiel. "Today, everybody believes that we need to go to college, and people will pay-- whatever it takes." And that's way too much these days says Thiel, when people without a degree can make as much as those with an advanced one. "There are all sorts of vocational careers that pay extremely well today, so the average plumber makes as much as the average doctor," Thiel tells Safer.

At a time when only half of recent college grads are employed full-time and tuition has quadrupled over the past 30 years, Thiel believes the system is broken and its promises are hollow. "I did not realize how...screwed up the education system is. We now have $1 trillion in student debt in the U.S... cynically, you can say it's paid for $1 trillion of lies about how good education is," Thiel says.

The current situation may put students and their families in a quandary over how to pay for a college education, but it's still the best bet for the masses, says Prof. Vivek Wadhwa, an entrepreneur who teaches at Duke and Stanford. "You can take 24 children and make them successful by giving them on-the-job training. But that's not a lesson for the rest of America," says Wadhwa. "What I worry about is a message that's getting out there to America that it's okay to drop out of school, that you don't have to get college. Absolutely dead wrong.

Wadhwa has debated Thiel on the value of higher education. He says Thiel's "20 Under 20" winners may have good ideas, but everybody has ideas and it takes a college education to turn those ideas into inventions and companies. "The majority of them will fail. And they're going to regret not having completed their education," Wadhwa tells Safer.