I enjoyed my college experience and as the first ever college graduate in my family I wouldn't do anything different. Colleges provide something far more beneficial than the shot at FU money.
That said, some people are better off dropping out or never going at all. I'm highly suspect of learning how to be an Entrepreneur in a college setting and guess something like YC is probably better for that.
I think of YC as almost a trade school for start ups but it still doesn't replace college. I wonder how many successful start uppers go back to college later? Any of you? Like Shaq and Troy Polamalu? :)
And I guess that school-like vibe is why YC is better than simply dropping out and taking 100k. Even if you fail, you still get the YC experience to help you with your next venture.
My understanding, having been sucked into that trap myself, is that college debt forces people to go to hedge funds or other lucrative jobs that don't utilize the full potential of some of the brightest college students. If you can give students an opportunity to build something, unencumbered by the issue of money, the outcome would be far better for society.
Well if that's the only concern, then Thiel could do what rich people have been doing for years -- donating scholarships to give smart kids a free ride to college.