Dale Stephens just wasn't meant for the classroom.
At the age of 19, he founded UnCollege.org, an organization that represents a growing social movement to fight the traditional notion of what higher education should be—and whether it's worth the cost.
Stephens isn't alone. As the costs of higher education have soared, the number of alternatives to college have, too. In the last several years, short vocational programs leading to a certificate have spiked, costing anywhere from a few thousand dollars to tens of thousands of dollars.
"Today's high school graduates have a range of options for attending post-secondary education and entering the labor force," said Tom Snyder, program director of the National Center for Education Statistics. "Graduates also can enter the labor market directly or combine work with studies at a post-secondary institution."
A college dropout, Stephens, now 23, created UnCollege in January 2011. UnCollege's Gap Year program started in September 2013, offering high school graduates another alternative to college—though it's far from free itself. The program accepts a total of 45 students out of 600 applicants from around the world, willing to shell out $16,000 for the yearlong program, known as the Gap Year.
After that year, which includes traveling, volunteering, interning, working and meeting with personal coaches and mentors (you can call it a yearlong apprenticeship), about half the students end up going to college, with the other half ditching college altogether and going straight into the workforce.
Ask Stephens about the cost of a college degree, and he'll begin passionately rattling off numbers that are cringe-worthy.
Average debt levels for all graduating seniors with student loans rose to $29,400 in 2012—a 25 percent increase from $23,450 in 2008, according to the latest data available from the Institute for College Access and Success. The national student-loan default rate rose to 10 percent from 6.7 percent over just five years, according to the U.S. Department of Education. More than 70 percent of U.S. college graduates have outstanding debt.
"What's particularly scary about student debt is that it's unforgivable in bankruptcy, so you carry it with you till you die," said Stephens, who holds the title of chief educational deviant at UnCollege. He added, "I'm not saying education isn't a good investment. … It's important to understand what the ROI [return on investment] of what you're investing in will be."
In recent years student loans bypassed credit cards as the second-largest source of debt in the U.S. behind mortgages. On Tuesday, President Obama gave a speech at Georgia Tech that mandated clearer disclosures from lenders, a "student aid bill of rights," and that the Department of Education create a new system to address complaints related to student loans by 2016.
Stephens said high school grads are increasingly distrustful of what a college degree can actually do for them. Responding to President Obama's announcement, he said, "I believe the new 'Student Aid Bill of Rights' is a sign that our government is taking the student debt issue seriously but not necessarily offering a solution to help reduce it." He gave as an example "The Pay-As-You-Learn Loans," which cap repayment at 10 percent of a former student's salary. "An improvement, but it can't change how deep financially a four-year university could drive that person into debt," Stephens said.
The un-education of Dale Stephens
Born in Winters, California, Stephens left school when he was 12 years old and spent the next seven years educating himself as a so-called unschooler, which many other children in his area were doing at the time. This meant he was taking a French class online, volunteering at his local library and studying history and all the standard subjects at home, on walks and during field trips.
Eventually, as his fellow home-schooled friends started going to college, Stephens applied and was accepted to Hendrix College in Arkansas. He quickly found himself disillusioned and detached from what he was learning. "Overworked professors showed up to class and expected us to care about what they were saying. Learning requires personal context and engagement, so sitting in a lecture hall is not how your brain works," he said.
So like any millennial, he went online to find some answers. UnCollege was created in classic start-up fashion: Stephens created a landing page to see if there was interest and willingness to put down money.
He first blogged about his disgruntled feelings on the higher-education system. Within 18 months those thoughts turned into a 100-page book called "Hacking Your Education," which he sold to Penguin. That led to about 30,000 followers across Facebook, Twitter and a weekly newsletter and $20,000 in speaking fees, which he invested into founding the organization. Stephens was also chosen as a Thiel Fellow, a program offering young entrepreneurs an alternative to higher education, created by tech icon and PayPal founder Peter Thiel, who is a vocal critic of colleges.
Based on his growing online following, Stephens created the non-college accredited program, the Gap Year, basically an online outline at first. To his surprise, people applied. "I got 250 applications in May 2013, and people from Seattle to San Paulo, Brazil, put down money for deposits," Stephens said. He designed the curriculum and launched the program in the fall of 2013. This year he's anticipating about 1,000 applications.
UnCollege has raised more than $100,000 in funding from investors, including from the founders of Generally Assembly, a digital trade school, and Learn Capital, an education-focused venture capitalist firm based in Silicon Valley, which has also invested directly in Generally Assembly.
Students who sign up for the Gap Year program usually have a clear picture of the general direction they want to go in. "For students who want to get into fields where you don't really need a college degree (or anything where the product of your work can be easily evaluated, like writing, design and technology), UnCollege has been most helpful," Stephens said.
The mentorship—which has featured leaders from Amazon, the Khan Academy and the Bill and Melinda Gates Foundation—and the self-directed learning aspects of the program are big parts of its value. They are designed to immediately link up students with people in the specific field they want to pursue, ideally through internships. Eighty-five percent of UnCollege students have a full-time job offer in their field of choice after the Gap Year. Two companies that have hired UnCollege "graduates" are education technology firm Fidelis Educationand photography company Light.co.
UnCollege, which has seven employees, earned about $500,000 in revenue in 2014 and has earned about $800,000 in revenue to date, based on tuition of the roughly 65 Gap Year fellows who have attended the program so far. "UnCollege breaks even financially. We've upgraded our participant's housing, signed on a travel partner to provide better infrastructure for our participants while abroad and have done much more with the money we've earned," said marketing manager Chris Kelly.
UnCollege opened a campus in Brazil last fall and plans to double the size of the Gap Year incoming class by the end of 2016, accepting 120 students per year. He's focused on keeping the program small before pursuing more aggressive growth. "There's definitely demand to keep growing this, and I think there's benefit for people to take time to understand what they want out of college or if they want to go in the first place," Stephens said.
John Gallagher is a big fan of the Uncollege movement. "When you opt out of the traditional educational system, you turn reality into your classroom," he stated in a 2013 blog post for the organization.
The 19-year-old high school dropout has served as a paid staffer on 10 campaigns for political offices, ranging from New York State Senate to President of the United States, and now works at Indigo Strategies, a Washington, D.C.-based political consulting firm. He opposes paying for any sort of institutionalized learning, he said, claiming, "I feel everything I've ever learned was from doing stuff for people I was working for."
Stephens said that while education should be a lot less expensive than it is now, it's an investment, nonetheless, just as you'd pay for tutoring, online classes or a college degree. "We provide a structure and support for people who want to do it a little differently," he said.
A complaint or critic does not a company make, but good ideas for disruptive business models are born in personal stories about challenging the status quo in entrenched industries.
Knowing the direction you want to go in professionally is the key—how you get there does not necessarily require the same approach taken by everybody.
Manage growth, rather than pursuing aggressive growth at all costs, even when (maybe especially when) an idea is catching on faster than you expected.
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