I understand what you are going through as I am in a very similar situation.
What is it you ultimately hope to achieve? That question really helped me. If you want an MA to help open more doors for you (career-wise) and to increase your eventual salary the small school with funding would seem to be the best choice (based on the limited information provided). If however you want to go for your phd or something like that, especially abroad, then going to the prestigious school, busting your butt to stand out, and taking on the debt is worth it.
It's an extremely difficult choice, and sadly it's one that gets little sympathy, and few listeners who are willing to ACTUALLY listen, understand the predicament, and offer GOOD advice (so many people either call you a lucky whiny b*tch, or say 'oh man, go there, that is such a fun city and the clubs are so awesome!' (yeah, because we are working so hard and paying so much to drink it up and party.)).
ps. as a future MA in English please don't judge my poor spelling, grammar and punctuation too harshly!