I first wrote about the cancer growing in America’s universities five years ago. Surprising even myself, the research I did at the time led me to believe the situation was hopeless. Colleges had chosen a dark ideological path. Reversing it seemed implausible.
Today, I’m happy to say I was wrong. As you read this, America’s college system is in the early stages of transformation. My kids are three and five. By the time they’re preparing for college, it will be unrecognizable.
Artificial intelligence (AI), as I’ll show you, is the most imminent threat to college as we know it. But the true disruptors are serious entrepreneurs. They have ample funding, motivation, determination, and networks to challenge America’s most elite schools.
This transformation has been a long time coming… and is important for you, your kids, your legacy, and your country.
If you’re new here, we’re rational optimists. That means we believe entrepreneurs + innovation can solve almost any problem… if they’re allowed to.
Until recently, America’s elite colleges had godlike prestige AND ungodly amounts of endowment money. How do you disrupt that?
Turns out, you let their leaders speak in front of Congress.
We all know the story. The presidents of Harvard, Penn, and MIT essentially said it was fine for students to call for the genocide of Jews. Then they tried to hide behind a commitment to free speech.
Right. You expel kids for “microaggressions” like wearing sombreros on Halloween. You allow invited speakers to be silenced by harassment. You (Harvard) rank dead last of 247 colleges in FIRE’s free speech rankings. But we’re supposed to believe you’re free speech absolutists now?
I wish we could chalk this up to kids being kids. But these were the leaders of three of America’s most prestigious universities. They felt comfortable enough to say this stuff in front of Congress, and live on national TV.
We’ll talk about the ideology pulling their strings some other time. I’d call it cultural Marxism. Just know it is the enemy of rational optimism.
Keep in mind, eight US presidents went to Harvard. Roughly 1 in 10 current S&P 500 CEOs attended Harvard.
America’s elite colleges are trendsetters. Today’s radical ideas become tomorrow’s policies and social movements that you, I, and everyone else must live with.
So fixing college—which I believe is only truly possible by disrupting it—is crucial.
Let’s first look at the facts on the sad state of college.
College is already in decline
College used to be the most trusted institution in America.
In 2009, 98% of parents wanted their kids to get a degree. You rarely see a 98% approval rate for anything.
But today, almost half of parents prefer their kids not to go to college. According to The Wall Street Journal, the majority of Americans now consider a college degree to be a questionable investment. They are correct, as you’ll see in a moment.
Did you know college enrollment has declined every year since 2012?
Almost 100 colleges have closed since 2016. According to consulting giant Bain, 70% more colleges are in financial distress than 10 years ago.
At the same time, Google, Apple, JPMorgan, and dozens of other desirable companies no longer require hires to have college degrees.
Skyrocketing tuitions are driving students away. The price of college has surged 23-fold (!!!) over the past 50 years.
Zooming in, this chart shows the change in price of 14 important costs to American families since 2000.
A TV (bottom blue line) costs 98% less than in 2000. A four-year college degree (second highest red line) costs almost three times more than in 2000.
Source: Bureau of Labor Statistics
Only healthcare has suffered higher inflation than college.
Students today must fork out $90,000 on average for a four-year degree at a public university. Double that for a private university.
At this rate, a TV that covers your entire wall will cost $100, while a four-year college degree will cost a quarter million dollars. It’s like living in two separate economies.
Can you imagine if college costs were declining just like the price of TVs?
Think of the burden that would relieve for the average family.
Maybe we could excuse colleges if, like TVs, they were improving. They are not.
Look at the trend in the vaunted “wealth premium.” A college graduate has always earned much more money than a non-college graduate, on average. That is the number 1 reason parents want their kids to go to college.
But the payoff has shrunk dramatically. A 2019 Federal Reserve paper titled “Is College Still Worth It?” measured the differences in wealth between college grads and non-grads. It broke it down by race.
The paper shows the average white college graduate born in the 1980s is only slightly wealthier than a non-grad:
Source: Emmons et al. (2019)
For black college graduates, the wealth premium shrank to zero.
Source: Emmons et al. (2019)
I hope they update this data soon for people born in the 1990s. If the trend continues, it will reveal that attending college is now a net negative for wealth, on average.
But averages can obscure the truth. It all depends on what kids study. For STEM (science, technology, engineering, math) grads, going to college is still worth it, easily.
Kids and parents realize this. Since 2010, the number of “humanities” graduates has dropped by about 25%. Meanwhile, students seeking science and computer science degrees have skyrocketed. Great!
Source: Ben Schmidt
Kids who pursue useless degrees are making a financial mistake they might never recover from... especially if they borrow money to do it.
I’m not suggesting all “humanities” are useless. We need English, history, and philosophy majors, for example.
But “gender studies” and the like? These majors are worse than useless. They serve as recruitment centers for kids who will believe anything. Heads filled with nonsense, these kids graduate eager to go forth and be activists for failed ideas.
Unfortunately, these departments won’t quietly wither away. Colleges are bureaucratic. Bureaucrats excel at entrenching themselves. Tenured professors essentially can’t be fired. Reform will be tough.
For this reason…
College must be disrupted by new technologies, new ideas, and new institutions
There’s another reason college must be disrupted rather than reformed: money.
Things would never have gotten this bad if it weren't for America’s rigged student loan system.
Companies that fail to please customers face a choice: improve or die. Colleges face no such reality. They access an endless stream of money siphoned from families’ pockets.
The student loan system sticks teenagers with the only type of debt that's not dischargeable in bankruptcy. Briefly, here’s how it works:
Step 1: The government lends or facilitates the lending of money to students. 92% of all student loans are government backed.
Step 2: Students hand the money to colleges.
Step 3: Colleges mostly use this money to build fancy new facilities and hire administrators—not to improve learning. Yale now has one administrator for every undergrad. MIT has almost eight times as many admins as tutors.
Step 4: Colleges hike tuitions.
Step 5: Students borrow more money to cover rising tuitions.
Step 6 (new): The government forgives some student loans, scoring political points while sticking taxpayers with the bill.
So that’s how college has sunk to its sad current state.
Now let’s look at what’s changing.
This is where it gets exciting and hopeful
College has two main purposes:
Learning
Networking
College’s monopoly on learning has already been disrupted a little by the internet.
Anyone can watch world-class professors lecture on YouTube. MIT, the number 2 ranked college in America, makes the content of all its courses available online for free.
But you can only learn so much from passively listening and reading. That’s why Artificial Intelligence is the ultimate game changer in education.
AI is about to forever change how students—from kindergarten to college—learn.
How can I be so sure?
It’s long been known that one-on-one tutoring is the “holy grail” of learning. In 1984, MIT professor Benjamin Bloom identified what’s now known as Bloom’s 2 sigma problem.
He gave students individual tutors and measured their test scores. They jumped from “average” to “excellent” in just seven weeks!
Researchers, including the Defense Advanced Research Projects Agency (DARPA), have recreated these results many times. No one disputes that one-on-one tutoring is the surest way to turn almost any kid into a straight-A student.
That’s why wealthier families hire tutors… while everyone else is stuck with a one-size-fits-all education, hoping it works well enough for their kid.
For the first time, AI can give every student their own expert teacher
Khan Academy built robo tutor Khanmigo in collaboration with ChatGPT. Khanmigo is like a teacher but has infinite time, patience, and expertise to individually teach each kid.
Take a student who struggles to figure out a math problem that the rest of the class has grasped. Instead of being left behind, they’ll ask Khanmigo for help.
Khanmigo patiently guides them to the correct answer in the same way a teacher would, but can’t, because the teacher has 19 other kids to worry about.
Think about how game-changing this is. AI tools like Khanmigo let every student learn at their own pace. Maybe your kid breezes through math but needs some extra attention in Spanish. There’s now an AI for that.
Synthesis is another new AI learning tool. It looks incredible. Go check the videos out. I can’t wait to try it with my kids.
The “magic” is in the individualization. AI learns your strengths and weaknesses: “Stephen struggles with math, is a visual learner, and is sharpest in the morning. Design a lesson specifically for Stephen.”
Remember, we already know how to turn an average student into an exceptional one. Seven weeks with a one-on-one tutor was all it took in Bloom’s study.
Imagine if every kid had their own personal tutor starting in kindergarten?
AI will finally let us realize the dream of “no child left behind.” Slower, unconventional learners will get the one-on-one help they need. And if your kid’s a genius, AI will help them explore Newtonian physics in third grade.
And don’t worry about AI replacing human teachers. It won’t. What AI can do is turn them into superteachers, who can help each individual kid achieve their full potential instead of wasting valuable time grading homework. I hope the teachers unions understand this.
How long before AI can provide an entire four-year degree… for free or close to it?
Some colleges are leaning into AI already. OpenAI announced a partnership with Arizona State University to build a personalized AI tutor for its students.
AI-powered colleges could offer a superior education for 10% of the cost. That’s wonderful for the millions of kids who are lured into borrowing ridiculous sums of money to attend mediocre colleges.
Imagine a near future where any kid can secure a top-notch college education for $5,000 total.
Texas A&M is the largest college in America. It has 75,000 students. Within a decade, we could see an AI-powered college with 500,000 students.
I’ll be disappointed if we haven’t essentially "solved" learning by the time my kids are ready for college.
I believe it is a carved-in-granite, 100% guarantee that AI will forever disrupt the “learning” aspect of college.
But colleges—especially the elite ones—aren’t just about learning.
AI learning is revolutionary, but it’s not enough
Picture this. Your daughter achieves a perfect SAT score. She’s the valedictorian and captain of the basketball team. She has her pick of colleges.
Should she go to AI University, where she’ll learn just as much as she would at Harvard?
Or should she go to Harvard?
Harvard, obviously. Despite all the serious problems I’ve outlined, I’d still send my daughter to Harvard if she got in.
Why? Part of Harvard’s allure is its brand name. A Harvard degree is the ultimate door-opener: “She went to Harvard, she must be smart.”
Call me crazy, but I think many elite colleges are squandering their prestigious brands. Set aside the Marxist shenanigans for a second. Look at grade inflation.
Did you know nearly 80% of undergrads at Yale got straight A’s last year? Same at Harvard. It wasn’t always that way.
As you can see here, the average Harvard student earned a GPA of 2.6 in 1950. Today, it’s 3.8.
Source: Chartr
A straight-A Harvard grad used to be a rarity. Now the hardest part is getting in.
And increasingly, kids get in for reasons that have little to do with merit.
Add this all together, and you can see why Ivy League brands have lost the respect of many Americans.
But still… the network.
Above all else, the network you get plugged into by attending Harvard is priceless. It vaults you into an elite class of past and present students. It opens doors that cannot be opened any other way.
That’s what we need in order for high-achieving kids to choose not to go to an Ivy school—an alternative that opens up doors the same way an Ivy League network does.
Creating this from scratch is daunting. But it’s been done before. Look at Stanford.
The “Harvard of the West” didn’t emerge as a prestigious institution until the 1960s.
The key to its success was nurturing students and then partnering them with early Silicon Valley entrepreneurs, like the founders of Hewlett Packard. This helped Stanford build a stellar reputation and a great network. Today, it rivals the Ivies and surpasses them in many areas.
I see two disruptors, so far, that have networks that rival the Ivies.
University of Austin (UATX)
Joe Lonsdale, venture capitalist and co-founder of Palantir, started UATX in downtown Austin, Texas in 2021.
Lonsdale teamed up with historian Niall Ferguson and journalist Bari Weiss to build America’s next great university. UATX is committed to the pursuit of truth and free speech.
Of course, all colleges say they’re for truth and free speech. But UATX was built, from the ground up, to champion and defend these values.
UATX is the first university to have a constitution modeled after the US Constitution.
UATX’s constitution enshrines free speech rights and academic freedom. Its purpose is to ensure UATX “champions the pursuit of truth, scientific inquiry, freedom of conscience, and civil discourse.”
UATX also has a “Bill of Rights” enforced by the equivalent of a Supreme Court. It has strict checks on power. So even if a bad actor becomes UATX’s president, they can’t do much harm.
Sounds like what America is supposed to be, right?
UATX’s greatest and most unique asset is its prestigious network.
It already includes connections to Elon Musk, Marc Andreessen, and OpenAI CEO Sam Altman.
The opportunity for UATX grads to plug right into this network is uniquely powerful. Engineering students could intern at Elon Musk’s SpaceX. Computer science students could work at OpenAI.
UATX is reportedly luring faculty away from Ivy League schools.
And it plans to keep tuition reasonable by “avoiding costly administrative excess and overreach.”
With a clean slate and no baggage, UATX can revamp college. I love its variation of the “Chatham House Rule.”
We’ve all heard of students being “canceled” or ostracized because a video of them saying something problematic appeared on social media.
UATX forbids phones and laptops in classrooms. And while UATX students can discuss ideas shared in class, they’re not allowed to reveal who said what.
In other words, “thought police” are unwelcome at UATX. Kids can speak freely and ask hard questions… which is how you get to the truth. No need to self-censor. No tattletales.
Other innovations I’d like to see:
Scrap the four-year degree. It’s a holdover from the British aristocracy, when college was a “finishing school” for future elites. UATX students could intern at a company of their choice while kids at other schools are “finding themselves.”
Provide company sponsored degrees. A company could pay for a kid’s college education. The kid would graduate debt-free. In return, they’d work at the company for a couple years. This is how US military academies work.
Run a portion of the endowment like a venture capital fund. It could make seed investments in companies started by UATX graduates or other worthy entrepreneurs. Stanford pioneered this model. UATX could take it to the next level.
Founding a new elite school is like starting a space exploration company. You need world-class connections and deep pockets to get it off the ground.
Thankfully, brave entrepreneurs like Lonsdale are stepping up.
UATX is accepting applications for its first undergraduate class for Fall 2024. It already has a $200 million endowment. President Pano Kanelos says it's seen a surge in interest from donors disgusted by the response of top-tier universities to Hamas’s October 7 attacks on Israel.
Imagine a world where a valedictorian has the grades to get into Harvard but chooses UATX instead. It’s possible
I plan to go to Austin this year to see UATX for myself.
Thiel Fellowship
PayPal co-founder Peter Thiel founded the Thiel Fellowship in 2011. It’s a two-year program for young entrepreneurs who want to change the world.
Thiel Fellows get a $100,000 grant for dropping out of college to pursue their big ideas.
Thiel Fellows have already created companies worth a combined $350+ billion. Alumni include the founders of Figma (which Adobe tried to buy for $20 billion)… Luminar (lidar systems for robotaxis)… and Ethereum (the second-largest crypto).
The real value is students get access to Peter Thiel… his personal network… and all past Thiel Fellows.
The problem is it only accepts 20 kids per year. That means a Thiel Fellowship is 50 times harder to get than getting into Harvard.
My vision is for the Thiel Fellowship to grow into “Thiel University” and start accepting 2,000 students/year.
Imagine if Thiel University could lure more future leaders away from elite schools?
And if the Thiel Fellowship isn’t scalable, I hope it proves to be the Roger Bannister of college disruption.
We used to think it was impossible to run a mile in under four minutes. Then Roger Bannister did it in 1954… and 40 runners quickly did it after him. Sometimes you just need a leader to show the world what’s possible.
Thiel Fellowships are paving the way. Which entrepreneurs will step up next?
What to do if you have young kids
My kids are three and five. Here’s what I’m doing…
First, I’m testing AI learning tools to get my kids comfortable using AI and to see what it can and can’t do.
Using a personalized AI tutor seems weird. Weird is good. Weird means we’re pushing boundaries.
And as you explore these tools, remember the golden principle of disruption: This is the worst these AI learning tools will ever be.
Right now, they’re like dial-up internet in the ‘90s. Some aspects will be frustrating. That’s okay. Through experimentation and innovation, they’ll get better fast.
Personalized AI tutors are a new supertechnology that can help kids leapfrog their peers. My fellow parents, get ahead of this trend. It’s your job to make sure your kids aren’t left behind.
Although I’m determined to keep my kids off social media, I’m guilty of handing them an iPad from time to time. If your kids get “screen time,” consider making it an AI learning tool.
Quickly, let me address a valid worry. What if AI teaches our kids the wrong things? What if instead of superteachers at public schools, we get superpropagandists?
Look at Google’s Gemini AI, for example. When it launched, it didn’t depict white people or say positive things about them. This was a deliberate programming choice by its developers.
Imagine “Marxist AI” teaching your kids. Our bright future would turn into a wasteland.
It’s up to us—you and me—to make sure this can’t happen. Ask “What are my kids actually learning?” You should know the answer whether their teachers are human or AI. But it’s true that new technologies always open up new ways to propagandize people.
My hope is we all adopt these tools and “level up” learning. The one-size-fits-all learning era is dead.
So here’s the big question: Should your little kids go to college?
We have 10+ years to figure that out. Let’s see how things evolve.
If you have older kids preparing for college...
If my kids were college-aged now, I would want them to go to Harvard.
For all their problems, the opportunities opened up by an Ivy League degree outweigh the downside, in my mind.
But if you’re going to send your kid into the lion’s den, mentally prepare them.
I know many parents who worked hard and saved up to send their kids to great schools… only to have their kid come home, a self-loathing communist. Don’t let it happen to you.
Prepare them to encounter passionate professors who seem smart. These professors will preach ideas that sound great and new.
Show your kids that Marxism and all its flavors and Trojan-horse variations are not new. They have been tried many times before and led to some of the worst atrocities in history.
Make sure your kids know that Marxism is sinister. It preys on our worst emotions of envy and guilt. It divides the world into “oppressed” and “oppressors,” and scrambles our sense of right and wrong.
In short, show your kids how the world really works before they go to college. As long as they can think critically and independently, they’ll be fine.
And push them to study something useful and valuable, like STEM (science, technology, engineering, math).
Finally, check out UATX with your kids. Some of the lectures are online.
I love this one from award-winning journalist Michael Shellenberger. In it, he debunks many of the woke ideas being taught at today’s most elite schools. It’s a breath of fresh air. It’s amazing how much you can learn when you don’t have to pussyfoot around the thought police.
This discussion between UATX co-founder Joe Lonsdale and Marc Andreessen on AI is also a must-watch.
Finally, consider checking out UATX’s traveling Life of the Mind tour with your kids. It will be in Denver, Austin, and Miami later this year.
With a lot of hard work, a little luck, and our support, we might someday call UATX the “Harvard of the South.”
Even better… UATX can become a model that universities must adopt if they want to continue to attract top students.
It’s time to disrupt college and build anew.
Stephen McBride with Dan Steinhart.
Stephen on X: https://x.com/DisruptionHedge
Dan on X: https://x.com/dan_steinhart/
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