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Many students at for-profit schools don’t complete their education and end up in what analysts consider the worst of all worlds — with no degree but loads of debt.

“People are being conned into thinking that this credential is the one thing you need to do better in life,” Mr. Thiel said. “And they’re actually not any better off after having gone to college. They typically are worse off because they’ve amassed all this debt.”

Mr. Thiel’s criticisms are borne out by the plight of recent graduates, more than half of whom are either unemployed or “underemployed,” such as in entry-level restaurant or retail jobs, as they wait for better opportunities.

Despite the troubles for recent graduates, economists and academics say there is no reason to discount the value of college. Although a college education in some cases may have diminished in value as a result of the recession, they say, it still is the best way in the long run for young people to secure better jobs with better pay.

Drop out or stay?

Some are harsh in their assessment of Mr. Thiel’s critique.

Thiel’s encouragement of dropping out is, to be frank, just plain stupid,” said Susan Thompson, an analyst at iShares, an investment firm. “The chances of college dropouts becoming successful entrepreneurs like [Facebook founder] Mark Zuckerberg or [Microsoft founder] Bill Gates are pretty rare.”

Studies show that people with bachelor’s degrees earn on average 84 percent more over their lifetimes than high school graduates, she said. Moreover, listings for most of the best jobs specify that a bachelor’s degree is required — including jobs working at Mr. Thiel’s hedge fund, she said.

“To be sure, college is extremely expensive, and it’s getting more costly by the year,” she said, but a careful weighing of costs and benefits shows that the roughly $31,000 in debt that a typical graduate takes on will more than pay for itself in higher earnings.

President Obama has weighed in squarely on the side of more education rather than less. He frequently encourages young people to stay in high school and go to college. His administration has made it easier for Americans to obtain loans for college, loosened and capped repayment requirements, and championed efforts to keep student loan interest rates low.

The Treasury and Education departments last month released a study showing that college graduates with full-time jobs in 2011 earned 64 percent more per week than high school graduates — the biggest gap in wages between the two groups since 1915. The report noted that the federal government now provides 55 percent of all financial aid for undergraduates.

Some critics say the easy availability of student loans is part of the problem because it encourages colleges to increase their costs, knowing the government will provide financing.

College costs surge

The phenomenal growth in student loans is a result of increased enrollment and soaring costs, which have far outstripped inflation and growth in family incomes. Between 2000 and 2010, surveys show, college tuition and fees rose by 92 percent while the median family income rose only 18 percent.

But the explosion of student debt also reflects the shrinkage of other sources of college funding in recent years, as stock market turmoil cut into the value of endowments and budget troubles led to cutbacks in state subsidies.

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