PayPal co-founder Peter Thiel was also the first investor in Facebook. It is said that he both predicted the dotcom crash and the housing bubble. Now he has turned some of his attention to higher education.
His plan, simply stated, is to take $2 million to fund a few dozen college students (under 20 years old) to drop out and start a business with $100,000 each.
The people chosen are not slacker "dropouts" but people with specific projects that they want to pursue right now.
Does Thiel dislike the way colleges educate? Well, that's not his main reason for funding the plan. What he seems to be more opposed to is the debt that students incur getting that education. 65% of Americans have student loan debt (typically $24,000) and it is expected that by the end of the year the total will pass the trillion-dollar mark. That would make it greater than the country's credit card debt.
But he is also not a believer in the perceived and widely accepted value of the credentialing that a degree confers. (See earlier post on the education bubble) Thiel himself went the college route (law degree from Stanford), but he's not convinced its the way for many students.
He doesn't endorse all students passing on college. But a number of studies have shown that the students who benefit most from college are those who have the least - the first one in a family or from a lower socio-economic class, not the privileged class.
He points to Facebook which was started in 2004 by Harvard students who didn't finish their degrees. He says that if they had waited to graduate in 2006 to launch the company, it would have been too late. Thiel's $500,000 investment in Facebook is now worth about $2 billion.
PayPal, which he co-founded in 1998 was to him "a very basic idea: take dollars and email and try to combine them."
So, Thiel is funding College students who dropped out of Princeton to work on new solar panels, and a student developing a fully electric car instead of finishing at Purdue.