"Why not." suggests why this can be a very bad attitude trap, you don't value so much what you don't sweat for. If the OP attends MIT he'll sweat more than he would at Z for academics and money, and that will likely make a profound difference in the person he becomes by graduation.
What profound differences do you see occurring?
You believe "the large debt will certainly have a negative impact on his post grad life." and you don't see that as a forging a profound different in the person he becomes?
"Then I submit it's not very negative,"
How do you get that from my comment? Just because something is negative doesn't mean someone will change.