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The Real Debt of College Education

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It's hard to turn around these days without bumping into a story bemoaning, debating, defending or decrying the skyrocketing costs of higher education. In recent weeks, the New York Times produced a series, "Degrees of Debt," examining the "implications of soaring college costs and the indebtedness of students and their families" and making one Kelsey Griffith, a 2012 graduate of Ohio Northern University with $120,000 in debt, the poster child for students who recklessly pursue "their dreams rather than obsess on the sticker price." Meanwhile, PayPal billionaire and holder of two Stanford University degrees Peter Thiel showed up on 60 Minutes warning of an "education bubble" and promoting his scheme to pay young people $100,000 to drop out of college to pursue their dreams outside of the university system. And in The New Yorker, Nicholas Lemann penned an essay imploring the federal government "to pump extra tuition money into the system, in the form of low-cost loans," or risk forcing less-elite colleges to adopt the model of trade schools (an interesting observation from Lemann, dean of Columbia University's Graduate School of Journalism, which is, let's face it, a trade school).

Into these roiling waters splashed Joe Mihalic, a 2009 graduate of Harvard Business School who set about paying off his $101,000 in student loans in 10 months and blogged about the experience. Having recently reached his goal three months ahead of schedule, Mihalic, who earns about $104,000 a year working for Dell in Austin, Texas, was interviewed by the M.B.A.-centric PoetsandQuants.com for a celebratory story that appeared on Fortune.com. Soon, other outlets were also writing about Mihalic and his debt-reduction plan, which involved not only taking a second job as a landscaper, but selling off one of two cars (he kept the BMW) as well as a motorcycle; renting out spare bedrooms in his home; liquidating $14,000 in stocks and $8,000 from his 401(k); eschewing dinner dates and taking flasks to bars. As Mihalic notes on his blog, which saw traffic soar from about 300 hits a day to tens of thousands after the coverage, many found his frugality inspiring. One woman in her 50s with about $90,000 in debt started her own blog, iowenomore, after reading about Mihilac.

Others, however, were less impressed. "This is not an inspirational story, it is a harrowing tale of a privileged man using his considerable financial resources to pay off his debt," wrote blogger Popreflection. And as one commenter on the Wall Street Journal's Real Time Economics blog put it, "I wonder what helped more, the flask or the six-figure salary?"

Indeed, there's a lot to rankle in Mihalic's story, from his description of life at Harvard B-School -- $100 dinners in downtown Boston and international vacations -- to his conclusion that people "have an unhealthy obsession with things and experiences and statuses." You think? But his tale seems most absurd when viewed in the context of Griffith. None of the resources available to Mihalic, from his income to his stocks to his cars, are available to her, and the only thing she seems to have an "unhealthy obsession" with is a degree that's less marketable than a Harvard M.B.A. (Many commenters on the Times' website chided Giffith for not attending community college.) Perhaps Griffith will find Mihalic's frugality inspiring, but she's already working two restaurant jobs and is moving in with her parents. Is carrying around a flask going to help much?

That's the problem with these pull-yourself-up-from-your-bootstraps-type stories the media loves so much, especially post-2008. Stop drinking lattes, dye your own hair, clip coupons, make your own fun. There's nothing wrong with any of those things -- a little less debt can't hurt -- but these are highly personal and unique situations. For Mihalic, who ordinarily lives comfortably, the challenge of frugality was like taking up a sport, and obsessive (and temporary) saving gave him something akin to a runner's high. Griffith's debt issues are far more serious and her prospects more bleak. For her, an occasional $3 latte with friends might be a relatively inexpensive way to indulge.

The other reality the media never discusses when trotting out supersavers like Mihalic is what would happen if everyone adopted his frugal lifestyle. For seven months, he barely spent a dime at restaurants, clothing stores, movie theaters. A town with too many Mihalics wouldn't be much of a town at all. Then we'd have the worst of both worlds: inequality without any trickle down.

Yvette Kantrow is executive editor of The Deal magazine.