Will Venture Capitalists Disrupt Public Education?

Peter Thiel, one of the founding investors in Facebook caused a stir when he proclaimed that higher education was a bubble.

Thiel’s point was that the costs of higher education have grown at a pace far faster than inflation.

“A true bubble is when something is overvalued and intensely believed,” he says. “Education may be the only thing people still believe in in the United States. To question education is really dangerous. It is the absolute taboo. It’s like telling the world there’s no Santa Claus.”

Other technologists feel that the cost per course should be only $20. As the education industry open source software and collaborative technology, the costs of education should fall dramatically as students would no longer need to occupy prime real estate.

Could this trend have a trickle down effect to public high schools?

Afterall, the economic picture of most states and provinces is bleak and cutbacks are needed. If a school like MIT starts a trend with smaller, more collaborative classrooms, it would only make sense that the public education sector would follow suit.

In addition, the application of more technology would also increase teacher unemployment that is already at record levels.

Thiel’s argument is largely based around the fact that student loans have reached epic proportions.

“Student loan debt outpaced credit card debt for the first time last year and is likely to top a trillion dollars this year as more students go to college and a growing share borrow money to do so.”

However, on a public school level, the same situation is unfolding. Namely, governments are taking on more and more debt in order to educate the populace.

Is the education industry about to be disrupted like travel agents in the 90’s?