The latest statistics indicate that there is $1.2 trillion of student debt in the US, and rising. This is a startling figure and the chances of students ever paying the full amount back are practically zero. Yet more dollars continue to be borrowed every year, with little chance of it ever being paid back in full.
The Obama student loan forgiveness program, for example, has led to millions of dollars being wiped off the government's books.
Students are realizing that the rising cost of college isn't always good for them. If they can get a good job and go on board with a career, college is a good option. But there are so many students who find themselves working in non-graduate roles or whom fail to get jobs at all.
So will the rising costs of college produce more entrepreneurs?
Knowing What You Want
Entrepreneurship requires a certain set of characteristics to get started. Practically none of these are delivered by college. One characteristic that's impossible to gain from college is knowing what you want to do. So many students go into higher education simply because they have no idea what they want to do.
To become an entrepreneur, you must have a firm goal in mind. Students won't necessarily flock to the business world simply because of rising college costs. But those who do have firm ideas in mind are more likely to take the plunge.
The Peter Thiel Program
This is not the first time someone has asked the question about whether students should drop out of college in order to go into business for themselves. The co-founder of PayPal Peter Thiel took this very course of action. Three years ago he launched his program where he would give lucky students $500,000 and professional business mentoring to start their businesses.
It should be said that the people chosen were extremely bright and intelligent young people. Many of them were child prodigies with a desire to change the world.
But a few years on many of these students managed to become successful. And none of it involved a college degree.
Another Factor at Play
The rising cost of college is only part of the equation. If a college degree guaranteed a job at the end of it, the cost would not be a problem. The real query here is the value for money aspect. As of this writing, college costs are rising while job prospects are decreasing.
It's a simple matter of supply and demand. There is the same number of jobs as before, but there are more students with the right qualifications. Inevitably, many students are going to be squeezed out. Yet students are paying more and more every year for the privilege.
It would come as no surprise to see more students taking the entrepreneur route where they don't need a college degree to succeed.
What About the Success Rate?
Producing more entrepreneurs is one thing, but will the rising costs of college produce more successful entrepreneurs?
People forget that while there was a significant boost in the number of people going into business for themselves after the 2008 financial crash, most of these people failed. People who have yet to go to college may not have the skills needed to become successful.
For a start, they may not have the money to start a business in the first place. This is why it's more likely to result in a 'half and half approach'.
More kids are going to college and starting their own businesses on a part-time basis. They are operating from campuses all over the US in a variety of fields. This enables them to go into business while giving themselves a backup option. Many entrepreneurs become successful and still decide to complete their college degrees for this reason
Why is this becoming more popular, though?
The chances of failure for most startups are high. The vast majority of companies fail within the first five years. Furthermore, even fewer survive while making a profit. Without a college degree, this leaves you without any plan B at all.
Students realize this and they are taking up their degrees for that reason. If their businesses do not work out, they have the chance to pursue another career. They will still have their debts, but they will also have the chance to obtain a paying graduate job.
The rising costs of college may lead to more entrepreneurs, but there's no guarantee it will lead to more successful entrepreneurs. There will be a significant increase in part-time business owners. This gives students the protection they need should things go wrong.