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My impression is that you will spend LOTS of time with your classmates on campus, though I suppose that varies with the school. I don't think I would pay $500/mo just to live next to someone. But I'm cheap.
Perhaps the $ difference may not be $500. Does your studio require a 12 month lease (no summer rents for grad housing)? What about utilities? DSL? Cable TV? Grad housing usually includes most of those. But if it really is $500 per month difference, then I'd forgo it.