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I vote for a bike!
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<p>That will work for parts of the year, but I think that is not reasonable when winter hits hard. You really really don't want to tooling around outside in the winter for very long. </p>
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I have chosen to live with some friends off-campus because MIT's graduate school housing is so exorbitantly priced that I would have next to nothing in my pocket if I chose to live in The Warehouse or Sid-Pac, for example. It turned out that my friend in the area could not find a better home (considering price, location, etc.) than the one in Allston. As such, I will definitely be living in Allston---at least for this first year (after which I'll try to find a place in Cambridge or nearby on the Red Line, as I will be able to scout out a home for myself).
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<p>Personally, I would still vote for the grad-school dorm (with the car being option #2). I don't think the grad-school dorms are THAT expensive, particularly when you factor in that all utilities, Internet, cable TV, water, garbage, etc. are all included - and the major plum there is the included heat in the winter, which is a VERY big deal. Again, when you factor in all the time you would save, I still think that the dorm wins. </p>
<p>I'll put it to you this way. Plenty of MIT grad students who get no stipends, notably the Sloan MBA students, still crowd into the dorms. Certain wings of Sidney-Pacific, for example, are almost like a 'mini-Sloan'.</p>