# Interview with a CEO: Ridiculous Student Loans vs. The Future of Education

## By Mr. Money Mustache

## Thu, 07 Feb 2013 13:00:05 +0000

Treehouse founder Ryan Carson

Higher education in this country has really hit some choppy seas in the last 15 years. Many are calling it ‘broken’, but being more of an optimist I think of it as just going through a big, messy transition. This is creating both winners and losers, as the skilled or lucky are able to surf gracefully atop the wave of change, while the unlucky are pounded under the barrel and emerge with missing teeth, $200,000 of debt, and poor job prospects.

At the losing end of the spectrum, we’ve got today’s typical middle-class family. The parents lead standard consumer lifestyles, following a script of high spending and a low savings rate. Many are still stuck with mortgage payments by the time their two kids graduate from high school. They can’t cover the full cost of tuition of the the out-of-state schools their kids select, but luckily there are government-backed student loans available, originated by private banks. You can get Enormous loans these days, and everyone is doing it, so it must be okay, right?

The justification is that education is an investment in yourself, the career scene is more competitive than ever, and the higher earnings provided by a university education more than justify the cost of the education. Student loans are Good Debt, right? Interest rates are pretty low, college is life-enriching, so let’s go.

So the young adults go out and follow the script, borrowing as much money as they are allowed and using it as if it belonged to somebody else. On-campus housing, the full meal plan, a car, bars and restaurants, plus the actual fees proposed by the school.

> “These three textbooks rang up to $295.00 at the school bookstore? Whoa, that sounds expensive. Oh well, throw it on the student loan, it’s all part of the greater good. Hey! That’s a cool sweatshirt hanging in the background! Throw that in too!”

I saw this pattern in my own engineering school days, where I went through blissfully free from the thought that borrowing money was an option. I was forced to apply engineering principles to my own costs – from choosing the university closest to my hometown, all the way down to sharing a single used copy of each textbook with four other engineering students, photocopying pages as needed. It seemed difficult at the time, and I envied the luxurious lifestyles of the rich-parent and big-loan crowd. But looking back, it was actually a lot of fun, and the hard work provided a foundation for some great things in the future. On the other hand, a huge portion of my four years was spent learning things completely irrelevant to my field of work, and completely outside of my area of interest (untold credits in advanced calculus and centuries-old differential equations being among the most notable).

At the end, my classmates and I all graduated with the same degree, but have taken vastly different financial and career trajectories since then.

Despite my miniature frugal rebellion, I followed a straight-laced path. I got the good marks in high school and in university, slogged through years of irrelevant math classes, submitted my transcripts and photocopied diploma to the discerning high-tech companies, and got nice professional jobs. I put up lots of flair items in my cubicle and rarely lost my employee ID badge with the magnetic swipe strip for access to all the buildings on the corporate campus. I made 401k contributions and investments and paid plenty of taxes, eventually emerging to an early retirement…

…where I learned that the entire business world I had come to know was just a tiny, and rather boring, slice of the real world. All this time, other people had been following different paths, starting businesses in their 20s and even teens. They were able to learn faster, work harder without feeling like they were working at all, earn more money and have more fun – by tuning in to their own passion and letting themselves run.

Given the right attitude and view of the world, I could have bypassed much of the bureaucratic nonsense of my education and gotten an earlier start, ending up in a fun and self-guided life like the one I lead now – much earlier.

Just compare my own straight-laced story to this one from Rockstar Internet Entrepreneur Chris Guillebeau. This guy simply has an interesting perspective on the world, and how to prosper in it. He talks and writes about his unusual perspective, and this somehow turns into business ideas, infinite money, and a cult following. He makes it look easy, because when you set an intelligent person free on a task they enjoy, they do find it easy even while they produce some great stuff. Tim Ferriss and my frugality arch-rival Ramit Sethi are two other examples of the “hey, that looks too easy” phenomenon.

The rise of the Internet has also empowered new writers to be able to profitably self-publish, musicians to be able to Rock internationally without asking the permission of a corporate record label, and teenage hacker geniuses like the iPhone jailbreaker geohot to build bright worldwide empires from the comfort of their parents’ basements.

And now that I’ve stopped spending so much time conforming to the standard script of working hard in a corporate job, taking side courses in management and technical subjects, and maintaining a tidy cubicle, what has happened? Suddenly I too just get to do stuff that doesn’t feel like work, and yet I get to learn more than ever before and get paid for it. Are these all just isolated examples of a few lucky internet personalities, or is there a real pattern here?

As part of the answer, I have recently had the pleasure of talking with someone who has feet in all three of these worlds: Ryan Carson is a conventionally-educated computer scientist who has since gone on to found several companies, and is currently founder and CEO of a company that is specifically challenging the old educational model and allowing students to self-teach themselves in advanced subjects. And apparently he even knows Tim Ferriss.

In a recent goals post on his personal blog, I noticed he has plans to “Successfully place 12,000 people per year without university degrees into good jobs (50k per year). I love this goal and the idea behind his company, Treehouse. It is a company that creates high-efficency learning courses in high-demand subjects. And it is all about breaking up the old notion that education should be expensive, exclusive, and formal, and replacing it with the idea that the Internet has made information and communication virtually free. And it is information and communication with other people, rather than lifelong research tenures and ivy-covered stone blocks, that are the foundation of allowing people to learn things and produce value.

MMM: Thanks for stopping by, Ryan. What was your own education and career path, that led you to where you are now?

Ryan Carson: Honored to be here, thanks. I grew up in Colorado Springs, Colorado and went to Colorado State University where I graduated with a Computer Science degree. I wanted a bit of an adventure so I moved to the UK after graduating and got a job as a Web Developer (Coldfusion baby!). I did that for four years and then got married and started my first company in 2004.

I’ve been an entrepreneur ever since and am now building my fourth company, Treehouse. The first one failed (I didn’t know how to price and sell things) and I sold the other two after building them into profitable businesses.

Treehouse is an online school that teaches you how to code and design so you can make things like iPhone and Android apps, websites, web applications and more. We also have a business course so you can learn accounting, marketing and finances. It’s $25 per month for access to all our courses.

MMM: How many active students and how many graduates are there in Treehouse programs at this point?

RC: We have 22,000+ students right now from all over the world.

MMM: What subjects has Treehouse produced courses for, and what are your plans for future content?

RC: We have the following courses (we call them Learning Adventures)

- Become a Web Designer (jQuery, CSS, HTML, Responsive Web Design)
- Become a Web Developer (Ruby on Rails, Git, JavaScript, jQuery, CoffeeScript, Relational Databases)
- Learn HTML and CSS
- Learn Ruby on Rails
- Learn to Build iPhone Apps (Objective-C)
- Learn to Build Android Apps (Java)
- Start a Business (Marketing, Finance, Accounting)
- Learn JavaScript and jQuery
- Become a PHP Developer
- Learn WordPress

We’ve got 14 full-time teachers so we’re going to keep cranking out content as fast as we can.

MMM: How do the costs of your programs compare to universities – in terms of both money and time commitment to reach certain goals?

RC:
Treehouse: $25 per month for six months, $150 total
4-Year University: $89,688 and four years

With Treehouse, if you start with no technical knowledge you can be job-ready in about six months. This presumes you’re too busy to dedicate full-time to learning. If you dedicate eight hours a day to learning, you could be job-ready in 1-2 months.

Presuming it takes you six months on our program, it would only cost you $150 total ($25 per month). This is a little more affordable than the $89,688 cost of a typical 4-year university :) The tech skills you learn at a 4-year university are immediately out of date once you graduate and they don’t even help you get a job when you graduate.

After you finish Treehouse, our goal is to place you in a great job paying $40,000+ per year. You can then keep your skills up to date for only $25 a month.

I believe this is the new model for education – affordable, on-demand, up-to-date and job-ready. Mark Cuban just posted a great piece on this called Will Your College Go Out of Business Before You Graduate?

MMM: Are there online tests and other proof of completion, or do students demonstrate their mastery in some other way?

RC: Yes, we have Code Challenges which are in-browser coding tests where you have to write real code to pass. Once you pass, you earn Badges to demonstrate your knowledge. We also have multiple choice and fill-in-the-blank quizzes for non-code topics. You can try out our most basic course that teaches you how to make websites (HTML & CSS) for free here.

MMM: How do you picture Treehouse interacting with conventional education, and other education companies in the future? Competitors? Cooperators with a universal system for accreditation?

RC: We believe Treehouse can make you job-ready, straight out of High School, without having a college degree. We’re teaming up with high schools to empower their teachers to be able to teach, using Treehouse as their curriculum. Our Jobs team then helps place the talented students straight into jobs. Once a student gets placed in a job, they can continue learning with Treehouse to stay on the cutting edge.

Our first group of high school pilots are completing in June and the students are already looking very promising. We’re finding it easy to identify employers who are ready to hire these high school graduates at $40,000 per year. I don’t know about you but I certainly couldn’t have made $40k straight out of High School :)

MMM: Dyn-o-mite! Getting teachers to run these modern technology courses in conventional schools is a great idea. I would have loved to learn real skills like that in high school computer class, instead of “How to use Microsoft Word And Excel”.

I should note that it’s definitely possible to earn $40k out of high school, if you have skills that you develop throughout high school (carpentry, etc.). And to be fair, starting salaries in software for those with university degrees are much higher than $40k – more like $100k with a good education in a good job market.

But the same person who could get that good education and $100k job, could also start at $40k out of high school, and with four years of experience and promotions, be over that salary level by that point. Minus the cost of the formal education, and plus the smaller salary earned in the intervening years. So even on an apples-to-apples basis, it could be a win if there are enough employers who would go for it.

RC: If you’re already in college or working in a job, you can easily use Treehouse in your free time and re-train for a technology job. We’re finding that a lot of college professors are signing up for Treehouse Group accounts and assigning Treehouse Badges as homework.

Ultimately we’re trying to replace the need for college credits. It’s becoming clear that a traditional degree is no longer required for a job in technology. It’s all about your skill set and whether it’s up to date. My 12 year old Computer Science degree is now worthless because I learned an old language.

Obviously other career verticals like medicine will require traditional degrees and I don’t see that being disrupted in the near future.

MMM: Yeah… but I do know a few doctors who have choice words to share about the cost and inefficiency of modern medical education – even at the fancier schools. Ok, next question:

How does Treehouse interact with employers – do you have companies knocking at your door to get early access to graduates? Do you have any coordination for job placement?

RC: Our Jobs Team was created recently and their mission is to …

Find employers who are looking to hire web designers, web developers and iPhone/Android developers
Place Treehouse Students into great careers with these employers
We’re aiming to eventually place at least 1,000 Students per month into exciting technology jobs that pay $40,000+ per year.

MMM: How do you think a bright 16-year-old would fare, for example, staying up late on weekends to blast through the Treehouse IOS or Android development programs and putting out some apps which they share with the world and with potential employers? Is this an enormous shortcut or a big mistake?

RC: I think this is an enormous shortcut to success. Up until now, Universities have had this mafia-like grip on the job pipeline. You had to pay them a $100,000 toll to get to Job Land. That time is coming to an end and we’re entering a new age where anyone can educate themselves, on their own timeline, and get the job-ready skills they need. All for 0.17% of the cost of a traditional University degree in 1/8th the amount of time. It’s insane and I’m so honored and excited to be a part of the revolution.

I know from personal experience that we would always hire a developer who has built a couple real projects and put them out into the wild, over a college graduate with no real-world experience. Programs like Treehouse allow people to build real things, get them out to the public and then learn from that experience – all for a fraction of the time and money cost of University.

MMM: I’ve always thought of the MMM readers as ideal candidates for self-education, because way too many of us are techies, and we tend to like dispensing with cultural formalities in favor of getting real stuff done. Others are interested in a career boost, getting out of a currently stagnant track. On top of this, I hear from teenagers, students, and recent grads frequently, looking for advice on how to run their career and their finances to obtain freedom in life as early as practical. Do you have any advice for these people?

RC: In my life, I’ve always been naively optimistic and that’s worked well for me. I did a 1-hour talk where I summarize this methodology but basically the main reason why I’ve been lucky to get ahead financially, professionally and personally is because I assume anything is possible. I’m not more talented or intelligent than anyone else. I simply believe there’s only one rule in life: “Treat others like you want to be treated”. After that, it’s wide open :)

MMM: – thanks for joining us and thanks for making such a difference with your own company. I will definitely be following your progress from afar (and surely tracking you down next time I am in Portland as well!).

RC: Thank you so much for the interview. I’m a huge fan of MMM so this has been a real honor.

MMM: Aww, shucks.

While this article is a zoom-in on self-education, it should not be viewed as a complete end-run around university education. The message I’m hoping to share with potential students (and with my own son as he gets older) is just this:

- Education of any sort is good.
- If you’re going to buy it, shop around just as you do with any other purchase.
- Always work to maximize your own value and minimize the costs if money is at all an issue.
- Begin with the end in mind, and don’t just follow everyone else blindly.
- Don’t borrow major money for a degree, unless you know how you will earn the money to pay it back within a few years after graduation.
- The world is changing much faster than the traditional educational system can change itself. So use this fact to your advantage rather than getting crushed by it.
- There is a much bigger world out there than the Employer/Employee model that most parents teach you about. Most of our parents spent their careers in a different economic model than what we have today. If you have entrepreneurs as parents, you’ll get closer to the full story. If not, be sure to talk to others who run their own companies or work for themselves.

It is essential to believe that “Jobs are something that people, including YOU, create”, rather than “Jobs are a scarce commodity that must be chased and appeased with human sacrifices”.

More on Futuristic Education

This whole “free learning online” thing has been going strong for years, and yet is just getting started in the grand scheme of things. But besides the Treehouse you have just met, here are a few more that have drifted across my own screen in recent weeks:

Coursera: actual courses from various universities, made available mostly free

Khan Academy: a smart and personable guy just started making some YouTube tutorial videos to teach his family and friends, and it took off, eventually getting the attention and backing of Bill Gates. Nowadays they’ve got a video library with over 3900 videos in various topics and over 225 million lessons delivered.

EDX (a collaboration between Harvard and MIT): Big-name courses, made available for free – with options to pay a discounted fee to receive actual course credits.

creativeLIVE: A selection of neat-sounding courses in the Artsy arena (photography, business, design, photoshop, video&film). To complete the circle of this new online world, you’ll find Tim Ferriss and Ramit Sethi on there as instructors, teaching their stuff even as they continue to run their own businesses based on the idea of learning stuff online.

It’s an interesting world out there these days: knowledge is virtually free, and there has never been a better time to ditch your TV and Playstation completely – and dig in to some more enriching entertainment!