Beyond Saving

I���M CONSERVATIVE, but sometimes even I see the need to change. For instance, I belonged to a high-profile service organization for many years. They���re very proud of their tradition of raising money to give a Webster���s dictionary to each fifth grader in our city.

Let���s face it: These days, no self-respecting fifth grader is going to be caught dead with a hardcopy dictionary. Doesn���t everyone know that kids look up everything online? Traditions die hard���even when they no longer make sense.

Which brings me to saving for college. Should we continue to automatically fund 529 college savings accounts? I���m trying to decide whether to put money in 529 plans for my three grandchildren.

Some parents sacrifice their own retirement savings to make sure their kids��� college education is funded. Others might fail to pay off debt because they feel a duty to stash dollars in a 529. But those good intentions could backfire���in part because money in 529 plans can hurt a family���s financial aid eligibility.

If anyone should know the value of a college degree, it���s me. My degree opened the door to a successful banking career. So why am I having doubts about funding 529 accounts for my three grandchildren? It isn���t that we can���t afford it. Unless financial catastrophe strikes, we should be able to help with college costs. Still, I���m wondering whether saving for college should remain a priority���for five reasons.

First, I recently had a heart-to-heart with one of my sons. He said that, if I hadn���t helped pay for college, he doesn���t think he would have gone. He���s ended up with a good job in the technology sector, but his conversations with friends have convinced him that a college education wouldn���t have been good value if he���d had to borrow to pay for it.

Here���s a stunning statistic that backs up this anecdotal evidence: Nearly half of indebted millennials don't think college was worth it. Why not? The resulting student debt takes years to pay off and hampers their ability to build wealth.

Second, there are fantastic job opportunities available from exceptional companies���with no college degree required. For example, Google wants to disrupt higher education with its Google Career Certificates.

Imagine spending six months in Google���s program at a total tuition cost of around $300. If successful, you have everything you need to be hired by Google for a good job. Google has convinced 50 other large companies to join the program. I���m sure there will be more to come.



Third, instead of college, young adults can take advantage of the growth in real-time learning. Studies indicate we forget some 80% of what we learn over the course of the next 30 days. Meanwhile, many of us have experienced the joy of going to YouTube and learning just what we need to solve a problem.

I have a good friend who runs a successful online business. He has a master���s degree in business, but he���s told me that whatever he learned in college is too old to be of any use. He learns what he needs each day in real time. The world changes way too fast for universities to offer anything relevant to him.

Fourth, COVID-era learning has revealed the stodginess and inflexibility of the current education system. One blogger, Mr. Money Mustache, shared his decision to allow his son to drop out of high school and instead learn at home. Others have also discovered that bland, repetitive teacher-led instruction can be replaced by extremely high-quality instruction using videos and other online resources. It���s hard to imagine a self-educated student, like Mr. Money Mustache���s son, being satisfied with the traditional four-year curriculum that universities currently offer.

Finally, there���s a shortage of workers for high-paying blue-collar jobs. Not everyone is cut out for the corporate world. We still need plumbers and electricians. The popularity of Mike Rowe, host of TV���s Dirty Jobs, is a sign that the old ���you���ve got to get a college degree��� mantra is starting to erode.

I want to be clear: I���m not suggesting everyone quit funding 529 plans. If your children are going to be doctors, a Google certificate won���t cut it and having dollars in a 529 plan is probably an excellent idea. Still, the world of education is changing fast���and perhaps a well-funded college account isn���t the key to getting ahead.

Joe Kesler is the author of Smart Money with Purpose and the founder of a website with the same name, which is where a version of this article first appeared. He spent 40 years in community banking, assisting small businesses and consumers.��Joe served as chief executive of banks in Illinois and Montana. He currently lives with his wife in Missoula, Montana, spending his time writing on personal finance, serving on two bank boards and hiking in the Rocky Mountains. Check out Joe's previous articles.

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