<p>I don't know much about the differences between studying engineering at Yale and Dartmouth (I don't really know anything about Dartmouth's curriculum at all), but I'll try to comment on the rest of what you said as it relates to Yale.</p>
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I committed to Dartmouth already, and am totally unsure. Yale has the residential college (major plus), a great mix of big-school research and small school liberal arts and student/professor ratios (plus), but I've heard bad things about New Haven (minus?).
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The residential college system is really amazing, in a way that you can't understand before you're a Yale student. It attracted me as a prospective student, but I never really understood how important or awesome it is until I got to New Haven in the Fall of my freshman year. If it sounds good to you, it's probably an even bigger plus than you realize. You're also right about how good it is to have a mix of the research and facilities of a major research university and the feel of a LAC. For science majors, this means major access to labs doing cutting edge research, while for humanities majors (like me) it means, among other things, access to virtually unparalleled library resources and the ability to take small classes with the top scholars in your field. All this comes with nearly all the benefits of a LAC - the ability to take small classes, terrific access to faculty, plenty of research opportunities for undergrads (despite the presence of grad students), and, because of the colleges, the ability to feel like part of a smaller community, but still to be easily able to get outside that community if it becomes confining.
As to New Haven, I think most of the people who say bad things about it have never actually lived there (at least not in the past decade). I've found it to be a fairly decent city - it has everything I need as a student who is happy to have a campus-centered social life (it certainly has more going on than Hanover). And it really isn't that dangerous - it's a city, so there is crime, but not to the extent some posters on this site like to imply.</p>
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I like the small-school feel of Dartmouth...I was there for Dimensions (the admit weekend) and absolutely loved the atmosphere and the friendliness f the student body (plus); I also liked the D-plan (plus).
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Yale has a small-school feel as well, because of the residential colleges. Your college will have fewer than 500 people, making it as intimate as anything short of Deep Springs, but because the rest of campus is around (4800 other undergrads, to start) you can escape it if you want. The Yale student body is amazingly friendly as well - I won't compare it to Dartmouth because I haven't been, but we certainly don't lack in that regard. As for the D-plan, it's true that Yale has a more standard academic calendar, but I, at least, like the fact that everyone else is on campus when I am.</p>
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Finally, I am from the suburbs of Los Angeles, and I like the outdoors a lot, so Dartmouth's being rural is not an issue. If anything, the urbanity of Yale is a negative.
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I'm also from the LA suburbs, and also like the outdoors, but you should note that Yale as urban setting is very different from LA. I actually find the campus quite beautiful, even though I'm normally a fan of more outdoorsy sorts of places. And you don't have to walk too far to get away from the central city of New Haven if you feel the need to.</p>
<p>I'm happy to answer any other questions you might have. Good luck deciding, and I certainly hope you choose Yale - you won't regret it.</p>