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If two of America's greatest technology innovators dropped out of college to start game-changing companies, then you might pardon another one for encouraging a new generation of

students to quit school and create ventures of their own. PayPal founder Peter Thiel may not be a household name like Microsoft's Bill Gates and Facebook'sMark Zuckerberg, but he

may wind up making a big name for himself through his entrepreneurial fellowship. The Thiel Fellowship, first announced in September 2010, is now underway, with 24 members, all under 20

years old and all recipients $100,000 awards to quit college and create ventures of their own. Peter Thiel, founder of the Theil Foundation and is a technology entrepreneur, investor, and

philanthropist. Source: thielfoundation.org The fellowship, like its similarly named foundation, strikes some as a wiser version of the tech incubators of the 1990s. “We’re trying to

encourage technology innovation,” James O'Neil, Thiel Foundation's executive director, tells CNBC. “We’re not trying to recreate the '90s. That resulted in the tech bubble,

but we’re trying to create sustained innovation to grow the economy.” Thiel's effort is not the only one of its kind, but given the founder's high profile it has added new heat to

a burning debate about education and innovation. “Thiel's program is an incubator,” says Mary Haskett, Tactical Information Systems CEO and co-founder, who describes herself as a serial

entrepreneur who is currently launching her third startup. While she has spent much time in the hallowed halls of university, Haskett questions whether it was worth it. “I have a degree in

applied math and a master’s degree in educational technology, and in my entire adult life nobody has ever cared where I went to school,” says Haskett. Such thinking has prompted many

undergraduate and graduate schools in recent years to innovate themselves, by launching entrepreneurial-centered courses and programs. More than 2,000 schools now offer coursework in the

area, according to The Kaufman Foundation. Thiel's program has its share of critics, who say it is unwise to encourage students to drop out, or simply skip the college experience; some

question whether this will in fact spur innovation, or just encourage those with good ideas to skip college without a clear cut plan. “I see this as a big publicity stunt by Peter Thiel,”

says Vivel Wadhwa, director of research, Center for Entrepreneurship at Duke University. "What the Silicon Valley elite fail to realize is that the rest of the world isn't like

Silicon Valley. A Stanford dropout has many options. Students who follow this path in the rest of the U.S. and the world don’t. The majority who take this path will end up selling fries at

McDonalds.” That said, many of the students in the Thiel fellowship consider it a good opportunity. Ben Yu left Harvard University after one semester and was interviewed by the Thiel

Foundation after climbing Mount Kilimanjaro. He is now looking at building an e-commerce-based start-up to change comparison shopping. Yu says his time away from school has already been put

to good use. “It has been worth so much more than I would have gotten in two years at school, even Harvard,” he says. “Regardless of what school you go through, there is the same progress.”

Yu sees the end of Web 2.0 technology underway, and that the next thing could be on the horizon. With the addition of apps, tablet computers, mobile phones, and other ways that information

is accessed, he sees new challenges and says he is lucky to be able to tackle them head on with his venture. “This is more than I could have gotten at school,” Yu adds. “And for some reason,

even if I went back to school this time wouldn’t have been wasted.” Thiel Fellow Chris Rueth, who dropped out of high school, and is now working on a satellite-delivery method to bring

uncensored Internet to regions with strict censorship laws, says that the tech bubble of the 1990s made his career path possible. “The fellowship allowed bright minds to connect,” he says.

Rueth isn’t alone in seeing the potential of this type of entrepreneurial program. “I think the skills and level of innovation that you will acquire in the real world is worth the $100,000

of a four-year school,” says Andrew Cohen, founder and CEO of Brainscape, who has long argued has that many college programs, especially those in the computer-science field, teach theory

instead of inspiring innovation. “If I had a kid who was going to college, I would rather use the money to have him start a business," adds Cohen. "It would be a much cooler thing

on his resume and could result in a great series of contacts for his next job.” But the question is whether Gates or Zuckerberg could have made those connections, were it not for attending

Harvard in the first place? Indeed, all the Thiel fellows interviewed by CNBC.com emphasized they are working on making connections. Future of Innovation - See Complete Coverage There are

substitute networks that can be created beyond those in college. “Contact young start-up CEOs who are just getting started,” says Cohen. “Hire them as tutors. They might need the money and

you’ll make a good connection.” Still, foregoing college has its risks. Sujay Tyle, who will leave Harvard at the end of the current semester—he already runs ReSights, a nonprofit dedicated

to helping vision-impaired people in the Third World regain their sight—says he’s looking to leave school and gain experience working for a start up, but has a backup plan, too. “I’m going

to secure myself with the university so I can come back to school at another time,” he says.