From the headline, you might think I’m crazy. For better or worse, this was the most rational, well thought out decision I’ve made in my life. To make a long story short, the Bill and Melinda Gates Foundation gave my company, CollegeZen a $100K grant through the College Knowledge Challenge, which aims to increase college access. The problem is, I don’t believe more people need to go to college. In fact, I think way too many people go to college already!
First off, this is the most personal post I’ve ever written. In order to give you full context, let me tell you a little more about who I am: My name is Neil Soni and I am a 22 year old college student studying engineering at Carnegie Mellon University. I’m obsessed with technology and entrepreneurship – I honestly believe it is the solution to pretty much every problem that exists. I’m also the founder of a few companies, including CollegeZen, which is my most “successful” company to date. At this company, we were able to get all the important metrics fairly quickly – investors, customers, and users. For these efforts, I was named a Finalist for College Entrepreneur of the Year by Entrepreneur Magazine. If you care to learn more about my background, here is my LinkedIn profile (feel free to connect with me there).
It’s obvious to everyone that higher ed is broken. Tuition rates are continuously rising faster than inflation, resulting in massive student debt (over $1 trillion outstanding at the moment). At the same time, new graduates are struggling to find jobs, meaning they are beginning their careers with debt and no way to pay it back. A good analogy is that new graduates have a mortgage with no house.
Since everyone agrees that this is a problem, what are the proposed solutions? Well, there are basically 2 groups proposing vastly different solutions:
- Group 1: Higher ed institutions need to become more efficient to reduce costs. Government and society needs to do more to make sure people are educated. CollegeZen fit into this group – it focuses on improving higher ed recruiting practices and helping them reach their target audience in a more effective manner.
- Group 2: The whole model of higher education delivery is broken. The problem is systemic and no amount of efficiency in the current model can improve it. Time to go back to the drawing board. This is where top entrepreneurs fit in, such as Mark Cuban and Peter Thiel.
After working in this industry for 2+ years, I now honestly believe that higher ed is irreparably broken. The first area this can be seen is in college tuition costs. The cost of attending college is increasing much faster than inflation. Since 1986, inflation has been 115.06% while the cost of attending college has increased 498.31%. But despite this huge increase, colleges are still going broke. Mark Cuban wrote a great blog post about this recently which I highly recommend.
My own experience at CMU and dealing with other colleges backs up Mark’s opinion. For example, as a current student at Carnegie Mellon (a college with an endowment close to $1 billion), I have received several solicitations for donations, all while paying over $50K per year for tuition. There is no way they are that desperate right? Wrong.
I often compare higher ed to the newspaper industry. Once upon a time, colleges were absolutely necessary to deliver educational content, just as newspapers were essential to deliver news. Then the Internet arrived and people realized they could get all the same (and often better) news content for free. Does that mean people don’t need news anymore? Nope, people need news today just as much as they needed it in 1950. The only thing that changed was technology and the existing institutions adapted too slowly. Similar things are currently happening in the education industry. Do I think all colleges are going to disappear – no. Some will continue to exist, but the number of higher ed institutions will definitely decrease as technology now enables one institution to serve far more students than they previously could.
There are some awesome companies out there already working to use the power of the Internet to make college more accessible and dramatically (we’re talking orders of magnitude) less expensive. For example, check out Coursera. They are now offering classes for credit for $200…compare that to the $200,000 cost of attending Carnegie Mellon! Economically, it’s a no-brainer.
Somewhere along the line, society stopped focusing on making sure students learned valuable skills and started focusing on degrees. But what is the purpose of a degree if you don’t know how to do anything useful in the real world? This could not have been more evident than during President Barack Obama’s State of the Union address earlier this year. In his address, he called for increasing funding for higher education so that it is more accessible. Not once did he step back and question what people were actually learning in college and why costs had skyrocketed so much. But unfortunately, this isn’t a Republican vs Democrat issue. Ron Paul excluded, did anyone on the Republican side question the economics behind college costs? No – in fact, Mitt Romney was also in favor of increasing government funding for higher education.
The gap between degrees and real world skills could not be more evident than in the tech world. There is currently a huge talent gap for skilled developers, which has caused starting salaries to climb to over $100K in Silicon Valley. As skilled as these people are, an average starting salary of $100K for undeveloped talent is quite honestly absurd. The only reason these salaries have gotten so high is that market demand combined with limited supply creates a bidding war, that only the largest tech companies are capable of winning.
There is a simple solution using the free market that would prevent this talent gap: tie student loan interest rates to college major. If someone is majoring in a tech field (such as computer science or engineering), the odds that they make enough money to pay back the loan are much higher than if they major in something with limited real-world application (such as history – I love history but not as a college major). These odds should be reflected in the interest rate. This would make attending college much cheaper for a technical degree and therefore drive more people into those majors. This solution doesn’t even require any technology – just common sense! When combined with amazing technologies and content providers like Coursera, Udemy, and Khan Academy, you have a very simple path to dramatically reducing higher ed costs.
So what’s next for me? I stepped down as CEO of CollegeZen in early 2013 so I am done with the company (although my equity stake means that I am involved in a small oversight capacity). I’ve been fortunate to develop skills in areas that are in high demand right now and I’ll be moving into a leadership role at another start-up in the very near future (keeping the specifics quiet for now).
I strongly believe we need to have this conversation now and stop wasting our time, money, and energy on a system that isn’t producing results. Please tweet me (@LibertyNeil), email me (firstname.lastname@example.org), or comment and lets get the discussion started!