I have a friend going to UTC. She transferred there last year from the prestigious private school we attended together. She's happier there, doing better work, and much more driven.
A "mediocre" state school is only mediocre if you let it be. In college, as in life, you only get out what you put in. If you go to a state school and push yourself, well, you can turn some heads. You can get noticed, no matter where you went.
If you're worried about the quality of your education, you shouldn't be. The disadvantages you may have are limited resources available on campus and a lower quality of professor. I've found the first to be merely an annoyance, unless you're into hard sciences/technology (larger state schools may be better, then) and the second to be something you can fix. You'll learn to select professors carefully,but you would have to anyway. And the professors don't determine what you take away from college... you do. It's your game, not theirs.
The other real concern is for the job/graduate school market. Yes, grad schools will look at you differently than someone who went to Harvard, but that isn't always to your disadvantage. You have a good chance to show that you're more driven than them. You didn't just go to college... you seized the day. You did what was expected and much, much more. The Harvard kids just fit the mold... you shattered it.
Jobs may be a problem because you won't make the connections others did. This is a real concern if you want to go into politics or other closed-off communities. On the bright side, you can make many of those connections in the community now and network aggressively instead of passively. Also, most professional connections you make can be made either in your professional life or in a grad school.
Really, don't think of it as a "mediocre state school". Think of it as an opportunity. You can make it into whatever you want. You can get a degree in a few years, if you'd like. You can become class president, start your own business on the side, write professional articles, and graduate summa cum laude. Or you can spend four years just scraping by and numbing yourself, bemoaning your "mediocre state school".
Your choice.
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