The United States has 4,726 colleges and universities.
To attend these institutions, students spend nearly $600 billion per year—that’s $393 billion for tuition, and $196 billion on expenses like travel and housing.
But a fascinating new technology has recently emerged, and it’s raising the possibility that all of those institutions—and even the education business as we know it—are at risk of being shut down for good.
In the next few minutes, we’ll tell you the details of this technology...
And more importantly, we’ll show you how to set yourself up to profit from it.
What’s a Diploma Worth?
It might sound scary, even unthinkable, that our nation’s top colleges could be shuttered—but actually, it could turn out to be a good thing.
You see, higher education in the U.S. is broken.
Over the past 30 years, for example, the cost to attend college has risen by more than 538%. Even when inflation is taken into account, it’s 4.5 times more expensive to go to college today than it was back in 1985.
Even more shocking is that, despite surging education costs, unless a college grad is in a specialized field like computer programming, many are finding that the value of their diploma is going down.
Sure, college graduates can earn more than those without a degree—but there’s a financial cost to that:
According to The Institute for College Access and Success, 70% of students graduate with an average loan balance of $28,400.
And nationwide, student loan debt now sits at a staggering $1.2 trillion.
To put that in perspective, $1.2 trillion is nearly 50% higher than all the outstanding auto-loan debt, and it’s nearly double our nation’s credit card debt.
Sadly, today’s college graduates are being saddled with an almost unbearable burden.
Where Does The Money Go?
This begs the question of why it costs so much to attend college. Here’s how the average university budget breaks down:
13% of tuition fees are earmarked for "research"...
A big chunk is then allocated for things like sports, sabbaticals for teachers, and maintenance for all of the pretty buildings on campus...
And a bigger chunk gets allocated to something known as "student services and institutional support."
What exactly are student services?
Well, these include facilities like libraries and labs...
But they also include more dubious services—like The University of Houston’s 50-foot rock-climbing wall, or Washington State University’s "jumbo Jacuzzi."
Shockingly, just 30% of tuition fees go towards actual "instruction."
And since higher education operates like a monopoly, there’s zero incentive for colleges to cut costs and pass those savings on to students.
Instead, these institutions continue to overspend and overcharge students for services that may or may not contribute to their education.
But like many monopolies that came before it, this one too shall crumble—
And we predict that a recent innovation from the heart of Silicon Valley will be the catalyst for its downfall...
What’s “Real” Education?
I attended Columbia University in New York City.
I appreciated its beautiful campus and stately buildings—but that’s not why I was there.
I was there to learn. I was there to prepare myself for the future.
Based on the shocking number of people getting their degrees online nowadays (nearly a quarter of a million students, for example, are currently enrolled in University of Phoenix, a higher education institution that specializes in online programs), it appears that many people feel the same way.
But how could the non-essential components of college be scaled back even further, while still maintaining the types of interaction that make college so valuable?
One of Silicon Valley’s most successful entrepreneurs thinks he has the answer.
He’s betting billions of dollars on a new technology—a technology that could one day make a college diploma available to all.
The entrepreneur I’m talking about is Mark Zuckerberg, the CEO of Facebook.
Just over a year ago, Zuckerberg made one of the biggest bets of his career:
He paid $2 billion to acquire a virtual reality company called Oculus.
Simply put, Oculus produces a pair of high-tech goggles that, when worn, make the user feel as if they just stepped into another world.
The experience is extremely realistic. Take a look at this video to see the reaction of a man “riding on a roller coaster” with his Oculus headset.
While many speculate that Facebook and others will use virtual reality for entertainment purposes like gaming and movies, we predict the technology will be used for a much more practical purpose:
To disrupt the education system in this country.
Imagine what it would be like to slip on a pair of glasses… and be instantly transported into a classroom full of students.
In this “virtual classroom,” you could see and hear an Ivy League professor lecturing on the fall of the Roman Empire, or the history of Chinese art.
You could converse with other students and compare notes—or you could play games and even “flirt” with them.
In other words, you could do many of the same things students do on today’s college campuses—but you could do it from wherever you are, at a fraction of the cost.
In a system where only 30% of student tuition goes toward “instruction,” by eliminating their physical elements, universities could cut costs by 70%—and pass those savings along to the student.
So, instead of students paying an average of $13,564 per year to attend a 4-year public college, it would now cost them closer to $4,000.
How To Profit From This Trend
To be clear, we don’t believe technologies like virtual reality will cause every college or university to shut its doors...
But we do believe it will force them to rethink their cost structure.
And when that happens, students may have the chance to receive a diploma from an elite school—without incurring life-altering debt.
The thing is, ample opportunities are already arising for you to profit from this disruption:
For starters, you could invest in Facebook and its Oculus headset.
Or you could invest in Google—it, too, has virtual reality aspirations with its new device, “Cardboard.”
But if you’re a longtime reader, you know that we have a different perspective on how to profit from disruptions like this:
Why invest in 800-pound gorillas like Google, where the major profits have already been made?
Instead, you should consider investing in the early-stage companies like Oculus that can change the world—and bring their early investors life-changing profits.
So in the coming weeks and months, we’ll introduce you to a series of early-stage investment ideas focusing on the virtual reality megatrend...
These are groundbreaking companies on the forefront of innovation in this space.