In some ways, the education system has become a substitute for thinking about the future. You go to school, and what do you do after high school? Don't know, I'll go to college. What do you do after college? Don't know, I'll go to grad school. And tracking credentialing becomes a way of avoiding thinking about what you're going to do with your life.
For the better part of the last century, the purpose of education is to generate workerbees for the industrial machine. This satisfies most people's need for safety. We get a job—cash—in exchange for necessities like shelter and food. This serves industry's need for units of input less expensive than the value of their output.
In other words, students are buying insurance. For many decades this was a reasonable trade. The point Thiel, and many others, now make is that the insurance is becoming less valuable.
An "investment" in a traditional, college education is similarly making less sense.