The statement that formal education tends to restrain our minds and spirits rather than set them free seems true to a very good extent. It is based on the assumption that too much of formal education tends to create a narrow line of thinking. Formal education dictates the path that a person is supposed to follow to reach his/her destination. It stresses on the need to learn from the mistakes of the unsuccessful people and adopt ways of the successful people. It discourages experimentation and out-of-the box approaches.
However, ironically, some of the most successful people, both in the past and the present are those who had little formal education and who did not confirm to its structured and one-dimensional learning approach. Thomas Alva Edison, who has more than a hundred inventions to his credit, had dropped out of school in his early years. He did not certainly have a full fledged formal education but learnt a lot of things on his own through experimentation and by trying out things that might have seemed stupid to his formally educated peers. More modern examples could include the likes of Bill Gates and Steve Jobs, both of who were instrumental in the world switching to the Information Technology era, were both college drop outs.
Having said this, it is also important to realize that education is important. Edison, Bill and Steve, all of them did learn a lot of things in their journey to becoming legends on their own. But they did that with little formal education but more of practical and creative learning.