Could one
weekend in Lithuania really replace college?
March
7, 2019
Santiago,
Chile
Here’s an
economics lesson you won’t get in college.
What
happened to college tuition costs after the federal government started handing
out student loan aid in 1965?
For a
typical loan, you need collateral… i.e. the bank takes your house if you don’t
pay the mortgage. But with government-backed student loans, no collateral is
required to borrow vast sums of money.
With
little potential downside, the number of people willing to take on student debt
swelled exponentially.
With
extra demand, colleges were free to hike their prices.
So the average cost of a four-year college
education rose from $4,850 in 1965 – adjusted for inflation – to $26,120
today… a 540% increase.
Now, the average borrower owes around
$40,000.
That’s average…
two million former students owe over $100,000… around 415,000 people
have more than $200,000 of student debt.
Meanwhile, the average starting salary
for a college graduate with a bachelor’s degree was $2,500 lower in 2017
compared to 1965, according to the National Center for Education Statistics.
The degree itself just isn’t worth what
it used to be.
That’s partly because people are
majoring in stuff like underwater basket weaving, and partly
because standards have dropped…
Just a
couple weeks ago in one of our premium weekly intelligence reports, we
mentioned one university’s plan to stop grading based on merit, and instead
grade based on effort.
That’s the
equivalent of a participation trophy… for $26,000 a year.
And companies
are taking notice.
CNBC recently listed 12
major companies, including Apple, Google, and IBM, which no longer require job
applicants to have a college degree. Instead, they are looking for people who
have experience.
Imagine
that… you rack up 100 grand in debt to get a degree you hope will
open some doors.
Meanwhile,
your buddy who dropped out of high school to code apps gets an offer from
Apple.
But you probably grew up hearing horrible
advice like, “If you don’t know what to do with your life, just rack up six
figures of debt while you figure it out.”
Yeah, that’s a great way to start off life,
playing catchup, forced to take whatever cubicle job comes along just to pay
back your government loans.
Don’t
discount the cost of time wasted either.
Just getting an entry level job
even slightly related to anything you might want
to do gives you a four-year head start on your college bound peers.
And just knowing how to show up on
time, and put in a hard day’s work is something lacking in a shocking number of
college graduates.
The
2018 Job Outlook Survey revealed that employers thought only 42% of recent
college graduates were proficient in work ethic and professionalism. (But 90%
of the recent graduates considered themselves proficient.)
Then
there’s the opportunity cost of buying a college education.
If you
don’t want to work for “the man” your whole life, spend that capital starting
your dream business instead.
Even if
it fails, you’ll probably learn more than sitting through sixth century
pottery 101. I don’t know too many successful entrepreneurs without past
failures…
Some of
the most accomplished young people I meet owe their success to the experience
of getting out there and pouring themselves into whatever they are passionate
about.
But you
do need more than just passion to succeed.
That’s why for the past 10 years I’ve
hosted a five-day intensive entrepreneurship boot camp.
I seek out 50 young people from all
over the world to join me in the Lithuanian countryside.
And I bring in a handful of insanely
successful mentors – CEOs, marketing veterans, and even music producers – to
help me teach workshops on raising capital, marketing, investing, and always a
favorite, network infiltration.
In the spirit of entrepreneurship, we
don’t have a standard application. I say, make a video telling me why you
should be invited.
Because life isn’t a multiple choice or
fill in the blank exam.
And I have the video clips to prove that many
of the attendees find the camp more valuable than college.
But I’m
not claiming I can pack an entire college education into a five-day conference.
That’s not the point.
The
real benefit is joining a network of motivated people who are hell-bent on
building value.
As
James says in the video, “I spent $40,000 on an MBA from a top American
university. I got more value from this camp from the students alone. And it’s
free!”
And it’s a good thing it’s free,
because the opportunity to form a relationship with these caliber mentors and
students is something money can’t buy.
About the
Author
Simon
Black is an international investor, entrepreneur, and founder of
Sovereign Man. His is about using the experiences from his life and
travels to help you achieve more freedom, make more money, keep more of it, and
protect it all from bankrupt governments.