" In fact, most graduates want to find stable jobs to pay off their debt -- startups are not really on most graduates' radar."

That's irrational. If they're already way in debt, shouldn't they want to take more risks? Why the hell would you do something boring for ten years to pay off your debt, when you could do something fun for one year and have a 10% chance of more than paying off your debt. Also, employers are impressed by people who start their own businesses.

" Businessweek had a survey of the top ten desirable places to work for new graduates -- three were govt. agencies, one accounting firm, google, etc."

Right, because Businessweek can't say "The best place for you to work is that company you start in your apartment with your pals," because 1) that doesn't appeal to BW's audience, and 2) startups are small and varied, so it wouldn't make sense. It's like taking a survey of the most popular restaurants (McDonalds, Burger King) and using that as proof that the swanky new sushi place down the street is an awful place to eat.

1. They took basically zero risks before, so it would not be "more".

2. And screw up their credit history/get creditors chasing them?

> So wouldn't those people drop out earlier?

Because they couldn't predict the future? Not everyone who does a startup knew their path since they were 2 years old.

No those people would not drop out earlier, because they likely did not know they wanted to be startup founders until they had enough technical knowledge and/or more importantly built those relationships with students around them which led to the creation of a startup in the first place. Perhaps your experience has been different in which case I cannot argue with that.

"when you could do something fun for one year and have a 10% chance of more than paying off your debt"

For precisely that reason -- that the likelihood of success is only 10%. And it often takes more than a year to build something meaningful.

"Also, employers are impressed by people who start their own businesses."

This is not always true. It depends on the role the employee is being hired into.

"For precisely that reason..."

Did you miss what I said above? If you're already broke, why is getting broker a problem? What do you have to lose if you have less than nothing?

Can you give me some detail on your 'depends on the role' comment? I didn't realize this; when I recruit people (IT/quant finance), employers respond more favorably to entrepreneurs than to people who worked for someone else. Where did you hear otherwise?

Yes that's exactly what I'm saying. You meet like-minded people there who are excited about technology - potential co-founders. You learn about technology.

I've been through 3 universities, and the relationships I have built at these institutions have helped me to this day. I'm running a startup btw.

Is this like saying "If you're going to be a programmer, you'll do better to buy a computer. But if you buy a computer, you'll have to get money, which leaves you less time to be a programmer!"?

I would disagree with this: "1) that doesn't appeal to BW's audience" starting businesses _does_ appeal to businessweeks audience. ;)

I wouldn't be surprised if BW's readers were less entrepreneurial than average. It's a magazine about big business, not about doing business.

Yeah, but you get a 6 month grace period after school's over before repayment begins, and you usually have several financial hardship forbearances you can take to postpone repayment. Even then, you can go back to school for one semester, and reset the grace period and financial hardship forbearances.

So, you have at least 18-24 months of forbearance/deferment before you have to begin repayment, and that can be hacked indefinitely by taking 6 credits at your local community college.

Also, free interest or low interest as "aid" is a joke. You still have to pay the entire amount you borrowed.

I think the only time your strategy makes sense is if you can pay $1,000 to enroll in community college for one semester in order to stay on your parents' health insurance from June to December, which comes out to $140/mo, and the quotes you received for health+dental+vision were $500 a month, therefore saving approximately $2,500 per semester, or $5,000 a year. (And I believe if you're from Massachusetts, you can stay on your parents insurance as long as you're a dependent in income level even if you're not a student.)

While Paul focuses on web based startups, I think this phenomenon will apply to more areas as technology enables individuals to create their own niche. This is already true for some sports and certain types of businesses.

Like you correctly mentioned, the debt problem is more pronounced for Americans and some other nationalities, most developing nations do not have this problem and their entrepreneurs will start startups especially in developed and lucrative markets such as the US. This inturn will force the US mechanism to adapt. This effect of globalization has already had effects in many other industries.