(CBS News) One of the wealthiest, best-educated American entrepreneurs, Peter Thiel, isn't convinced college is worth the cost. With only half of recent U.S. college graduates in full-time jobs, and student loans now at $1 trillion, Thiel has come up with his own small-scale solution: pay a couple dozen of the nation's most promising students $100,000 to walk away from college and pursue their passions. Morley Safer takes a look at Thiel's critique of college.
The following script is from "Dropping Out" which originally aired on May 20, 2012. Morley Safer is the correspondent. Katy Textor, producer.
These are the days in May, when young men and women are capped and gowned -- their hands clutching diplomas, their ears tuned to some wise person telling them, "You are the future." For many, deep in debt with few prospects, that future looks pretty bleak.
It's enough to make some believe the siren song of Peter Thiel. He's the billionaire venture capitalist who's been beseeching students to drop out of a university system he says is broken -- churning out too many half-educated graduates seeking too few jobs. Thiel put his money where his mouth is and pays selected students $100,000 each to drop out and focus on ideas that will benefit themselves and the world at large. Waiting for graduation, he says, is an expensive waste of time.
Peter Thiel: We have a bubble in education, like we had a bubble in housing in the last decade. Everybody believed you had to have a house. They'd pay whatever it took. Today, everybody believes that we need to go to college, and people will pay whatever it takes.
Morley Safer: You describe college administrators as subprime mortgage lenders, in other words conmen.
Peter Thiel: Not all of them, but certainly the for-profit schools, the less good colleges are like the subprime mortgage lenders where people are being conned into thinking that this credential is the one thing you need to do better in life. And they're actually not any better off after having gone to college; they typically are worse off because they've amassed all this debt.
Morley Safer: You think if the bubble bursts, it's a good thing?
Peter Thiel: I don't think bubbles bursting are ever good things. I think they are inevitable things.
For Thiel success seemed inevitable -- child prodigy, chess champion, arrogantly self confident. He breezed through Stanford undergrad and law schools. With his Midas touch he took the millions he made as a co-founder of Paypal and turned that into billions as the first investor in Facebook.
Morley Safer: And you're a billionaire before the age of 40.
Peter Thiel: I guess that might be correct, yes.
Morley Safer: No, it is correct.
Peter Thiel: Yes. Yes, that is correct.
[Jim O'Neill: Ladies and Gentlemen, I'm honored to present the chairman of the Thiel Foundation, Peter Thiel.]
His 20 Under 20 Fellowship is Thiel's answer in miniature to what he calls the questionable value of higher education.
[Peter Thiel: This will be a fascinating afternoon as we listen to these incredible visions of the future.]
Each year, Thiel will select 20 students and pay them $100,000 apiece to work on their ideas.
[Female finalist: I want to make complexity our new paradigm because only by understanding how our world really works can we hope to make it better.]