$1 trillion is a ridiculous number.
With 12 zeroes, it takes a couple of inches just to write it: $1,000,000,000,000.
Now that we’ve gotten that out of the way, here’s a little piece of trivia for you:
For the first time ever, U.S. student loan debt now exceeds $1 trillion.
After home mortgages, it’s the biggest pool of loans out there.
Carrying such a high level of debt prevents people from starting families and buying homes; it slows down the entire economy.
To make it more personal, it’s the reason that many young people make ridiculous decisions – like, “Should I eat today? Or pay my student loans?”
We really have to ask ourselves:
Is it worth it?
Two Sides To This Coin
Economists think it's worth it. They give a “thumbs up” to education, pointing to the widening pay gap between jobs that require a degree and jobs that don’t.
Fans of Shakespeare and art history also think it's worth it. They point to the invaluable broadening of the mind that occurs through a liberal arts education.
But other folks – we’ll call them “the dissenters” – aren’t so sure.
They think less college – and less debt – is the way to go.
We’re not here today to pick sides, but we will say this:
If you’re looking for an alternative investment, something that’s well positioned to take advantage of a big trend, you might want to take a peek at what the dissenters are up to…
The “Less College” Shuffle
The dissenters kicked things off in a big way with start-ups like Khan Academy. Khan’s mission is to provide “a free world-class education for anyone anywhere.” Khan serves college-level content to over 6 million online students each month – and as a non-profit, they do it for free.
More recently, General Assembly created a modern-day vocational school. It teaches the “most relevant skills of the 21st century,” like Digital Marketing and Product Design. They’ve found a massive audience. After raising over $14 million in financing, they now have 9 locations in 5 countries and 4 continents.
Can You Do The Work?
Has the mainstream world reached the point where we can put “Khan Academy” on our resumes and still get called for an interview?
We’re probably not quite there yet. The fact is, the value of a degree (and a network) from a school like Harvard is still high.
But for students who say “no” to the crushing debt of college, we predict that, before long, there will be better paths – and more of them.
As Avi Flombaum, the Dean of a school that teaches computer programming (The Flatiron School), said:
“If you're looking for a credential, then brand matters. But in this world, nobody cares from which of these programs you graduated. All anyone cares about is whether you can do the work. “
3 Ways to Profit Via Crowdfunding
A new set of dissenters is now leveraging crowdfunding to solve this trillion-dollar problem.
For example, a number of start-ups now allow you to “crowdfund” student loans – and in an interesting twist, they even allow you to crowdfund the students themselves:
- SoFi allows students to borrow money (and receive lower interest rates) from alumni of their school. As SoFi borrower David Bowman (Stanford MBA ’12) says, “My borrowed funds come from real people, and there is no way I'm going to let the alumni down.” SoFi has funded $300 million in loans.
- Upstart is a crowdfunding site that enables students to raise money in exchange for a percentage of their future income!
And in our weekly deal roundup, we recently featured an online education company that aims to help people spend less money on college – and more time in the workforce. It’s called One Month Rails.
Started by the guys who taught the top two classes at both Skillshare and General Assembly, One Month Rails teaches people how to build web sites – a massively popular and profitable profession.
If you’re excited to join the dissenters – and are looking for ways to invest in this emerging trend – you can learn more about One Month Rails here >>