Let’s start with the cost. According to the College Board, average tuition and fees for in-state residents at a sample of public colleges have soared by 25 percent since 2008–09. A key driver has been the reduction in funding as states have been forced to adopt austerity measures. In the same time frame, tuition and fees at private universities rose by less (13 percent), but still by a lot more than inflation.

According to the Consumer Financial Protection Bureau, total student debt (which includes private loans and federal loans) climbed to more than $1 trillion. It is the only form of consumer debt that has continued to grow even as households pay off mortgages, credit cards, and auto loans. In real terms, students are borrowing twice what they did a decade ago.

It’s not only Facebook stock that Silicon Valley superstar Peter Thiel is selling. He’s shorting higher education, too, arguing that college is the new asset bubble—the natural successor to subprime. Remember when we all believed that a home was an investment that would never lose money? Now, Thiel argues, exactly the same thing is being said about a degree. To back up his point, Thiel is paying 20 of the country’s most promising students $100,000 to walk away from their studies and become entrepreneurs.

The actual problem?