@aboveaverage No one at UMich really care about Detroit although it is just 50 miles away. Most students would not go there or never been there throughout their 4 years at UMich. Many would go to Chicago or Toronto during the school breaks though, Ann Arbor has been ranked the best college town, the best place city to live in recent years.
An entry level job offer with equity compensation is not known to be that valuable at the time of offer. It is mainly by looking backward from a successful liquidity event that one can find people whose entry level jobs paid off in hundreds of thousands of dollars from the equity compensation. But at the time of offer, that cannot be known, and one cannot know if the company will hit the jackpot or (much more commonly) become worthless.
“#5 US news vs #28”
The US News ranking, like any ranking, uses a specific methodology that will favor one type of university over another type. Given its methodology, large, public, non-urban universities will be at a significant disadvantage, while smaller, private universities in urban areas tend to benefit from the methodology. While there are very few who would dispute MIT’s ranking, there are not many in academic and corporate American that would agree with Michigan’s ranking.
“#1 in the world Quacquarelli Symonds vs #30”
Last I checked, QS ranked Michigan #21. That’s on a global scale…out of thousands of universities. For the record, Columbia, Penn and Duke were ranked #18, #19 and #21 (tied with Michigan) respectively. If anything, you are making an argument in favor of Michigan by referencing QS. Not that it matters since the QS ranking is as flawed as the US News ranking.
“#1 engineering undergraduate vs #6”
You are again making an argument in favor of Michigan. #1 vs #6 is hardly noteworthy, especially when #6 presents over a quarter of a million dollars in savings.
“Boston (with Harvard dual enroll an option) vs metro Detroit”
Metro Detroit is actually a nice area…in some ways nicer than the Boston area. But most Michigan students remain in Ann Arbor most of their time, so it’s more of an Ann Arbor vs Cambridge scenario, and both are very nice and have much to offer. Also, Harvard and MIT complement each other in many ways. Harvard excels in the humanities and social sciences while MIT excels in Business, Engineering and the hard sciences. There are overlaps of course, as Harvard’s core science departments (Bio, Chem, Math and Physics) are exceptional, and MIT is excellent at Econ and Political Science, but it makes sense to have cross registration between those two universities. Michigan, on the other hand, is so complete and strong across all disciplines, including Business, Engineering, the Social Sciences, the Humanities and the Sciences, that cross-registration is hardly needed. Engineers at Michigan can take their fill of humanities (LSA) and business (Ross) courses.
@ucbalumnus “It is mainly by looking backward from a successful liquidity event that one can find people whose entry level jobs paid off in hundreds of thousands of dollars from the equity compensation. But at the time of offer, that cannot be known, and one cannot know if the company will hit the jackpot or (much more commonly) become worthless.”
True. However, I am not trying to guess the future myself, I just counted it at its market value on the signing date with no discount or premium. That is what the market thinks it is worth currently.
I did make sure that the student understood that, as you say, it is possible that over time the stock may end up being worthless.
If the equity compensation was in stock options, then they should have a strike price the same as the market value as of the grant date. So their value (as they vest over time) is zero unless the stock price increases.
if the equity compensation was in restricted stock units that vest over time, then it seems unlikely that an already-publicly-traded company would offer $200,000 of such to an entry-level employee for the first job out of (any) college, barring something extremely exceptional that is unlikely to be college-dependent.
If you were paying full price at both then this would be a much harder decision, if you were paying OOS at UMich then MIT would be a no brainer, but the difference in price is too much to ignore.
As a father whose child could be in the exact same situation, this has been a fascinating thread to read. My son also got the full ride Stamps scholarship to Michigan just recently and will find out this week if he gets accepted to MIT or not. Unlike the originator of this thread, we definitely don’t have $250K available for college though! We could probably pay for around 2 years of Michigan in-state (although we wouldn’t need to now) or 2 years of MIT with the way they charge for tuition on a sliding scale based on your household income.
While the decision will largely be my son’s, my wife and I are obviously very partial to not having to pay anything. 
We had been thinking many of the same things as the majority on this thread:
- He could always get his masters at MIT (or Stanford, Cal Tech, etc) if he desires
- The money saved could pay for his masters
- Investing/saving that money could go towards getting started in life (e.g., car, house, getting married, etc)
- Why incur student debt when you don’t have to for something that is only incrementally better?
Also, I don’t believe the original poster specified what he/she was planning to go in to. I believe this could make a huge difference as to what decision a kid makes. Our son plans to go into Aerospace Engineering. As many on here have already said, the rankings aren’t necessarily all they are cracked up to be, but if you look at the US News & World Report rankings for best undergrad aerospace engineering programs, MIT is unsurprisingly at the top. However, #2 on the list is Michigan (tied with Georgia Tech, another public university). These are both ranked higher than even Stanford and Cal Tech which come in at 4 and 5. Michigan is certainly no slouch in engineering, that’s for sure. So, does it make sense to pay $150K (or more based on one’s income) just to go to the #1 university over the #2? I can’t see it. Also, he has visited both campuses and really likes both.
While maybe not a major consideration, another thing to possibly consider in favor of Michigan is that you can get credit for certain (not all) AP classes towards your degree. It’s my understanding that with MIT you can get credit for certain AP classes as well, but that it doesn’t mean you can graduate earlier, it just frees up another slot for you to take an elective.
The option would still have time value even if the strike is set at current market price. Its time value would depend on the time horizon for exercise of the option, any restrictions on its exercise, the volatility of its stock, interest rate, etc. If the “stock” is highly volatile (e.g. for a startup), the time value could be very high.
If there is only enough to pay for two years of MIT at the offered net price, then the decision has been made for him/you. Any choice here would be along the lines of “would he rather be an MIT dropout after two years (because there is no more money), or a Michigan graduate after four years”?
Indeed, if he did not get the scholarship at Michigan, then Michigan would not be a good choice either.
“Indeed, if he did not get the scholarship at Michigan, then Michigan would not be a good choice either.”
Michigan meets full need for all instate matriculants. tettnanger is instate.
There is plenty of prestige in going to Michigan and the added prestige of getting a full ride offer. I’m sure getting that scholarship will open doors for you and give you special opportunities while at Michigan.
I would 100% go to Michigan and save the $ for grad school or housing later in life!
@tettnanger did write that “We could probably pay for around 2 years of Michigan in-state”. Presumably, this is after the affect of in-state FA, if any. Of course, what a college defines as “full need” may not necessarily be the same as what the parents/student think they need to afford it.
“If the equity compensation was in stock options, then they should have a strike price the same as the market value as of the grant date. So their value (as they vest over time) is zero unless the stock price increases”
Fischer Black and Myron Scholes and the Nobel Prize Committee beg to differ.
"if the equity compensation was in restricted stock units that vest over time, then it seems unlikely that an already-publicly-traded company would offer $200,000 of such to an entry-level employee for the first job out of (any) college, "
The student received 5 offers, all from the usual suspects including 3 of the big 5. 2 of the student’s offers (including one from a big 5) included equity of that magnitude.
“barring something extremely exceptional that is unlikely to be college-dependent.”
Yes, this student is exceptional, but there are many exceptional students. This student lacks that one big thing you can point at, so no Olympic medal or Rhodes Scholarship, for example.
Is the outcome college dependent? I don’t know. Every talented kid is a bit different. What they need to thrive is different. We never really know about the road not taken.
Again, I would choose Michigan based on the information presented. It is a great school. My point is simply that for certain particular exceptional students, who see MIT as a better fit, I can imagine a situation where MIT could be worth it if it. I have no reason to believe that is true for the OP of this thread though.
My point ucbalumnus was that Michigan would still be affordable for an instate student, even without the Shipman Scholarship.
That’s a no-brainer. Go to Michigan! A bachelors is still a bachelors whether it’s MIT or Michigan. If you check professional job listings, you’ll see that there is no distinction between schools, in fact the bachelors is just a minimum requirement. Experience is where the money and career grows. If you go for the scholarship at Michigan, you could still use part of that money for a master’s degree, which would squash an MIT bachelors any day of the week.
The excerpt below is from Quora re: MIT vs topknotch public schools that are highly regarded for STEM. Nonetheless, I’d probably still go with the full ride from Michigan and MIT for grad school.
"The biggest issues that I might consider in the public vs private (school) analysis would be class sizes, professor-student interaction, and availability of opportunities outside of the classroom. This would include access to professors beyond posted office hours, availability of special programs, access to research opportunities, unique study abroad programs, funding for special programs/personal student projects/student clubs.
Then try to evaluate how much you would take advantage of these special programs at the more expensive school — how “necessary” vs “that would be kind of nice but no big deal” are they to you? Frankly if Baskins Robbins ice cream parlor offers 31 flavors but all you ever order is chocolate — then what difference do the rest of those 30 flavors make to you? They could be the most exotic flavors on the planet, but if all you ever order is chocolate, then so what?
MIT’s price tag includes this overwhelming multitude of opportunities — but if all you want is to take a basic set of CS classes (that nearly every good university offers) and get your degree as quickly and expediently as you can — well, why pay for the extras that you’re never going to use? MIT is the ultra deluxe education package deal. Is that what you and your parents want, can afford (preferably without going into debt), and are willing to pay for — because you’re really going to take advantage of all of these incredible opportunities?
Okay, so what are some of these extras?
For a kid who likes small instead of big, there are freshman learning communities of only 50 freshman and class sizes between 8 - 12 frosh, turning MIT into a STEM version of a LAC.; MISTI (internships all over the world, all expenses paid); IAP (a ton of fun, enriching, and/or educational things to do during the January term); externships (1 month internships during Jan term sponsored by MIT alumni); wanna do research with a professor? Word on the street is that it usually only takes on average 3 emails to snag one!; UROP (undergraduate research program); Super UROP (an extended and beefed up version of UROP); I don’t know the dollar amount but pretty generous funding for the robotics clubs (I’m guessing on the order of maybe $50,000?, but I really don’t know so don’t quote me on this one); ability to test out of required classes; personal one-on-one meetings with your advisor prior to registration every single semester; both general advisors for freshman who haven’t declared yet and major-specific advisors later on; rarely a problem getting classes in your major (although ironically you might have trouble getting less essential classes like PE, glass blowing and toy design); no problems graduating in 4 years (or at least not due to impacted majors anyway); able to take upper division classes and grad classes at will, even as a freshman; prerequisites that are “guidelines” not requirements; athletic coaches that get the fact that your course load is hard and that you’re at MIT to be a student first and an athlete second; a ton of extracurriculars and clubs (although I suspect that most public schools also have this), M.Eng. program (get your Masters in Engineering in only 1 extra year instead of 2, offered only to MIT undergrads), taking classes with professors who wrote (or are writing anew) the textbook; phenomenal, out-of-this-world research going on in the labs; tons of support (free tutoring, mental health counseling, etc.); funding for dorm activities, outings, trips to help dorm bonding; a resident professor living in every dorm and a grad stud on every floor; and, last but by no means least, the amazingness of your fellow classmates, roommates, frat mates. I could go on and on….but my hand is tired of keyboarding now. Hopefully you get the picture.
Sorry for the novel. TL,DR — It’s MIT, welcome to the firehose, baby!"
If your parents are very wealthy, go to MIT but if your parents saved up your college fund through hard work and are not very wealthy, be a good son and go to MIchigan.