09/24/2012 04:31 pm ET Updated Dec 06, 2017

College on the Cheap

A college degree is the key to realizing the American dream, well worth the financial sacrifice because it is supposed to open the door to a world of opportunity. But the cost of going to college has never been so high, and the value of having that diploma has never been more in doubt. Private college tuition in America has doubled in the last 25 years, and at public universities it has tripled. And good luck getting the classes you need at today's jam-packed community colleges. To add insult to injury, consider this disturbing statistic. Half of college graduates under the age of 25 were jobless or under-employed last year, the highest share in 11 years. That means there are 1.5 million people who donned their cap and gowns last year, only to be back waiting tables or not working at all.

On a recent reporting trip to California, Dan Rather Reports met some of the real-life Americans behind these statistics. Parents like Diana Fuentes-Michel, who is financially killing herself to fund her daughter's education at St. Mary's College in Moraga, California. The well-regarded school charges $50,000 for tuition, fees and board and is actually seeing an uptick in enrollment because many Californians are so frustrated with the crowded classes and yearly price hikes at California's public colleges and universities. (The annual cost to attend the famed University of California Berkeley is now $32,000 for an in-state resident. That includes fees, room and board. The California State University schools are less expensive, but are also insanely over-subscribed, one of the reasons why only 17 percent of students at the CSU schools get through in four years.)

From St. Mary's, we visited Diablo Valley Community College in Pleasant Hill, CA, where we met Noah Shafi, a 19-year-old psychology major. (Noah isn't even particularly interested in psychology, but that's the only major that has enough open courses to allow him to finish on time.) And at Laney Community College, in downtown Oakland, we stood in a long line outside the Cashier's Office with Randa Powell, a 29-year-old mother who mentors young women and is trying to go to college in her spare time. "It's super difficult to stay motivated when you have to jump through all these hoops in order to get your classes," Powell told us.

California is ground zero for the crisis in public higher education. Its once well lauded and well subsidized system of public universities, state colleges and community colleges has simply run out of money. $2.7 billion has been eliminated from its budget since 2008. Tuition has been hiked, course offerings and staff slashed, and a record 470,000 students are on waiting lists at its 112 community colleges. But amidst the gloom and doom, we interviewed entrepreneurs who are convinced that higher education is ripe for disruption, and that in the not too distant future, college will be more affordable, accessible and relevant to the workforce.

In fact, the future is here. Start-ups like UniversityNow, a network of low-cost, online colleges, allows students to work at their own pace and pay a few hundred dollars a month for a degree. There's Coursera, a website that has partnered with 33 universities to offer a variety of classes online, for free.

And then there's Shereef Bishay, who is challenging the notion that so many Americans need to go to college in the first place. Bishay has started an intense, 10 week bootcamp for wannabe web developers, no college required. Graduates from bootcamp don't get a diploma, but they don't need one. Silicon Valley start-ups are so hungry for talent, they just want to see what you can build, not where you went to school. And as a happy postscript, consider this. Noah Shafi, who's been uninspired by community college, found his way to Bishay's bootcamp, and has landed two part-time job offers... thankfully in technology, not psychology.

Dan Rather is anchor and managing editor of AXS TV's Dan Rather Reports (Tuesdays, 8 p.m. ET on AXS TV). For more, visit Dan Rather Reports, Dan Rather's Official website, Dan Rather Reports on Facebook and Dan Rather Reports on Twitter. This episode is also available on iTunes.