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The stipend is for the entire year of 12 months says the professor - I had asked him this question meself. Regarding the work in Iowa State, its basically programming.
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Thanks for the info.
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The opportunity cost is definitely something to consider !!
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Maybe UCSC let's you walk away with an MS if you decide later on the PhD isn't your style? Though that's something they wouldn't advertise, that would be the ideal level of flexibility.