Last year, Peter Thiel decided it was about time someone hacked what he considered America's deeply flawed educational system.

The PayPal founder and Facebook investor launched the Thiel Fellowship, which offered $100,000 grants to 24 students ages 20 and younger to drop out of school and pursue their entrepreneurial ambitions. This week, Thiel announced a call for new submissions.

Although the Fellowship has certainly attracted a huge amount of press, including these stories from Inc., the program is not merely just a publicity stunt. In an interview with National Review last year, Thiel explained his logic behind the fellowship.

"Probably the only candidate left for a bubble--at least in the developed world (maybe emerging markets are a bubble)--is education," he said. "It's basically extremely overpriced. People are not getting their money's worth, objectively, when you do the math. And at the same time, it is something that is incredibly intensively believed; there's this sort of psychosocial component to people taking on these enormous debts when they go to college, simply because that's what everybody's doing."

Unsurprisingly, when the fellowship was announced, it attracted some hardcore skepticism, if not outright criticism.

Shamus Khan, a sociologist at Columbia University, called the fellowship and Thiel's attitude toward collegiate education "an act of total self-indulgence."

It's hard to argue with Thiel that a college education has become enormously expensive and that levels of student debt--which recently exceeded $1 trillion--are the highest they've ever been in the country's history. And it's also hard to argue that the traditional liberal-arts college experience may indeed be a lousy vehicle for entrepreneurship, especially when stacked against the hyperfocused and über-competitive accelerator programs such as TechStars or Y-Combinator.

The Thiel Fellowship--and Thiel himself--gets criticized (unfairly, I believe) because his detractors conflate two of Thiel's beliefs: the first being that education is in a bubble; the second being that college is antithetical to innovation.

The somewhat reductive assumption, then, is that Thiel believes college is too expensive and thus unnecessary for all. 

But Thiel has never argued that every student should drop out of school and starting a business. Rather, his argument is that for a very select group of young people, traditional education may hamper their ability to innovate. By exposing these standout students to the right network of scientists, mentors, and investors, the fellowship will help them move much quicker toward their goals.

"Beyond the 20 people that are going to be chosen for the fellowship, we hope it will encourage a broader conversation about whether college makes sense or not," Thiel said in the National Review interview. "What we want to suggest is that there are some very smart and very talented people who don't need college."

Of course, it's too soon to tell if Thiel is right. Thiel's fellowship model lasts two years, but the program has already boasted impressive returns after only a year.

One of the Thiel mentors, Danielle Fong, writes on Quora that her class of fellows "have made legitimate progress in a wide variety of difficult subjects, taken on immense responsibility in the face of doubts, and have certainly grown more than most would have in a year in college."

For example, Eden Full, who dropped out of Princeton University, has built several prototypes of her low-cost solar tracker. Laura Deming has raised money for a VC fund that will target antiaging biotech. Tom Currier, an engineering prodigy who dropped out of Stanford University, is building Black Swan Solar, a stealthy start-up working on ultraefficient solar technology.

There has even been one exit: James Proud sold his company, GigLocater, in June 2012 for a "six-figure" payday.

But there have been some failures, too.

Andrew Hsu, a child prodigy, was pursuing his Ph.D. at Stanford when he dropped out at 19 (he graduated from undergrad at 16) to launch Airy Labs, a social-gaming venture. But in February, the company experienced a bit of turbulence, firing 20 employees amid speculation that Hsu's parents had too much influence on the company.

But Bill Hunt, a serial entrepreneur and a mentor with the Thiel Foundation who works one on one with the entrepreneurs, is bullish on his expectations for the fellows.

"Have many of the fellows entered into something much bigger than they anticipated ?" Hunt writes on Quora. "Yes, absolutely. Several of the fellows quickly and unexpectedly found themselves in the deep end of the pool. And each developed swimming skills that most entrepreneurs take many years to build."