Dropping out: Is college worth the cost?

Students with promising ideas are paid $100,000 to drop out of college and become entrepreneurs in a controversial program founded by billionaire Peter Thiel

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These finalists are making their pitches...

[Two male finalists: The effectiveness is inversely proportional to the time of diagnosis.]

The only condition? Drop out of school.

Morley Safer: Your megaphone is saying, "Don't go to college." Is that what you really mean?

Peter Thiel: I'm saying that people should think hard about why they're going to college. If your life plan is to be a professor or to be a doctor or some other career where you need a specific credential you should and probably have to go to college. If your plan is to do something very different you should think really hard about it.

The educational establishment dismissed the idea as dangerous, nasty and misguided.

Peter Thiel: Our thought was, "This is going to be a very idiosyncratic, small program." And the fact that it was controversial was a big surprise to us, but it was because an awful lot of parents are quite worried about the education system. There's a great deal of anxiety beneath the surface.

With only half of recent college graduates in full-time jobs and college debt topping a trillion dollars, Thiel believes college has become just another debt-fueled luxury.

Peter Thiel: I did not realize how wrong-- how screwed up the education system is. We now have $1 trillion in student debt in the U.S. That trillion dollars-- wanna describe it cynically? You can say it's paid for $1 trillion of lies about how good education is.

Morley Safer: That's a-- such a sweeping statement. You're suggesting that people graduate as either dunces or ne'er-do-wells. There's been a huge number of people who've contributed extraordinarily to this society in the last 20-30 years. We live longer lives because of those people.

Peter Thiel: We have a society where successful people are encouraged to go to college. But it is a-- it's a mistake to think that that's what makes people successful.

Morley Safer: But what you're saying suggests a concentration on all of the practical things in life, correct? But some of the impractical things in life are the most valuable.

Peter Thiel: That's not always true. People say that sometimes they are. Sometimes they are just impractical things that are of little value. And you have to look at the cost side of the equation. It costs up to a quarter of a million dollars to go through four years of college today. Unfortunately, you have to think about the practical things and are you actually gonna get a job where you can pay off this incredible debt you take on?

He may have a point about the cost. College tuition has quadrupled since 1980 but Thiel says many colleges are unaccountable, bloated institutions where students are learning less than ever before. He says a degree has little more than snob value.

Peter Thiel: There are all sorts of vocational careers that pay extremely well today so the average plumber makes as much as the average doctor.

By some calculations he's absolutely right and, in terms of successful college dropouts, he has his legion of examples.

Peter Thiel: Mark Zuckerberg from Facebook didn't complete Harvard. Steve Jobs dropped out of Reed College. Bill Gates dropped out of Harvard. When you do something entrepreneurial, the credentials are not what really matters. What matters is having the right idea at the right time, the right place.

Morley Safer: But all of the examples you give are people who had a very serious brush with higher education, all of them pretty much at elite schools.