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Eric Schmidt and Peter Thiel Debate Over Dinner

Fascinating debate (video) between Eric Schmidt and Peter Thiel.

Peter Thiel: We have a bubble in education. If there’s anything in our society that’s a bubble, it is education. Costs have tripled since 1980, or quadrupled, 300 percent increase after inflation in 1980 for secondary education, college education. It’s not clear that the quality has gone up at all. And if you measure how many years it takes for people to recoup the debt that they take on in college, it’s actually steadily increasing. Since 2000, it’s actually been better to finish after high school than after college on a relative basis. So, college was a good investment, was increasingly good investment through 2000. Since 2000, there’s been basically a roughly consistent gap between college and high school education because the debt has kept going up that people amass, it has actually become relatively ‑‑ it’s still better, but by a lesser degree since 2000.

So, we have an enormous amount of money that’s being spent on education. And basically I think the crazy cultural shift that’s happening is that people who are in the younger generation, millennials, are getting completely screwed. They’re basically being turned into something like indentured servants where they have to pay off their college loans. Bush rewrote the bankruptcy laws in 2005 to make it impossible to get out of college debt even if you go personally bankrupt. And so I think there is this very serious issue that education and the debts that are being imposed on people linked to education are turning an entire generation into something close to indentured servants. And that’s seems to me to be a very bad development. And because they’re not getting paid enough, the education has been hyped beyond belief.

Eric Schmidt: The problem I have with your argument, Peter, is it would appear that through that logic fewer people would get educated and the problem that I see going forward is the only way to maintain competitiveness is to have more education in the right ways, around innovation, new companies, and so forth. I can tell you that the generation of people we’ve hired at Google, the young people, men and women, are fantastic.

Still curious? If you don’t want to watch the video, you can find a transcript here.