New Fellowship Pays For College Kids To Drop Out

Michele Norris talks with entrepreneur Peter Thiel about his foundation's latest endeavor: a fellowship that encourages young people with big ideas to drop out of college and pursue their dreams. The "Twenty Under Twenty" fellowship provides $100,000 over a two-year period to each of the recipients. Their projects range from technological advances to new educational ideas. Thiel suggests that higher education is over valued. And he argues that sometimes the university setting is actually an obstacle to innovation. Thiel is a co-founder of Pay Pal and an early investor in Facebook.

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MICHELE NORRIS, host:

Universities and colleges are thought of as incubators of big ideas, places where students in labs or classrooms not only learn but think thoughts that end up changing the world. Then, there are the people who say higher education is overrated. Entrepreneur and venture capitalist Peter Thiel is one of them. He has deep pockets as a result of pursuing his own big ideas.

Peter Thiel is a co-founder of PayPal and an early investor in Facebook. Now, he's created a fellowship to give students under 20 years old a chance to ditch school and, as he says, begin to build the technology companies of tomorrow.

Peter Thiel joins us now to tell us all about this.

Welcome to the program.

Mr. PETER THIEL (Co-founder, PayPal): Michele, thanks for having me.

NORRIS: Now, I want to give you a chance first to lay out your idea. Explain this 20 Under 20 Fellowship. Everyone, as I understand, gets $100,000 over two years.

Mr. THIEL: Exactly. So we were basically brainstorming a few months ago, talking about what we needed to do to encourage more innovation and entrepreneurship, so we targeted it at 20 people aged 20 or younger. We ended up picking 24. There were so many phenomenal applicants. And looking at the candidates and what they were trying to do, it really gives you a sense of incredible optimism about the future.

NORRIS: What you're doing is almost like a different kind of version of a genius grant, but there's a piece of this that has gotten a lot of attention. Because I think people wonder why young people can't pursue their dreams and pursue higher education at the same time. Why do they have to step off that track?

Mr. THIEL: Well, I think anything that requires real global breakthroughs requires a degree of intensity and sustained effort that cannot be done part-time. So, it's something you have to do around the clock, and that doesn't compute with our existing educational system.

So, you know, I think the Facebook example is one that's been exaggerated and lot's been written about it. But had the people who started Facebook decided to stay at Harvard, they would not have been able to build the company and by the time they graduated in 2006, that window probably would have come and gone.

NORRIS: It's interesting though that you're promoting this idea because you're a college grad, you're a lawyer with a degree from Stanford, and I assume that you would assert that you benefited greatly from your own education.

Mr. THIEL: Well, I think I benefited and certainly we're not saying that everybody should stop out or drop out. If I had to do it over again, I probably would still go to Stanford Law School. It's a little bit different from when I went 25 years ago because it's gotten so much more expensive. The one thing I would do differently would be to think a lot more about it.

The way I was thinking about it when I was a 17-year-old senior applying to college was I don't know what I'm going to do with my life. I'm just going to go to college. When I was a 21-year-old senior in college, it was I don't know what I'm going to do. I'll go to law school. And there was a way in which education and the university system was sort of a substitute for thinking about what I would do with my life.

NORRIS: More than 400 applications. More than 24 people have received Thiel Foundation grants. Can you tell us about some of them?

Mr. THIEL: Well, they're all really impressive people. Just to illustrate with two of them: there's Eden Full is a 19-year-old woman from Canada who's passionate about alternate energy and making solar power cheaper. She has worked on a technology that enables solar panels to rotate less expensively. And she began developing this idea when she was 15 years old.

Jim Danielson is a student at Purdue, sophomore. He's designed a new electric motor for building more efficient electric vehicles. And one of the challenges he has is if he stays in college, a lot of the intellectual property would actually go to the university.

NORRIS: One last quick question before I let you go: When you were in school -and if you were to receive an award like this - how do you think you'd sell this idea to your parents? What do you think they'd think about you dropping out of school...

Mr. THIEL: Well, I think they would have thought...

NORRIS: ...or stopping out of school?

Mr. THIEL: Yeah. They would have thought it was crazy. I do think the thoughts around it have changed a lot in the last three, four years. As a result of this Great Recession afflicting the United States, there are sort of all these people who have gone to college and still can't get the jobs that were advertised. And when they're moving back in with their parents, there's sort of an increase in recognition that somehow that social compact have been broken.

So, a lot of the parents started quite skeptical, although they were more open-minded than they would have been in 2007 or in 1987 when I went to school, and they ended up being quite supportive.

NORRIS: Peter Thiel, good to talk to you. Thanks so much.

Mr. THIEL: Michele, thanks for having me.

NORRIS: Peter Thiel is a co-founder of PayPal and he's an early investor in Facebook. And he's behind the Thiel Foundation, which is giving out grants of $100,000 to students who pursue technologies of the future.

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