As guys and gals are coming back into the period of making these decisions (or at least considering their options) I would echo deechi's points with just a different slant. I spoke with a woman who is at a top Ph.D. program after a Fulbright ETA. She mentioned that she was so happy with her decision to go the Fulbright route after undergrad. Her thinking was that that year gave her a chance to recharge her batteries after four years of college. Typical funding for an undergrad going the Ph.D. route is 6 years. Even if done in a significantly shorter period of time, that a long haul. She also felt it gave her a chance to consider and clarify her interests - something that is (perhaps) a little harder to do when you're in paper chase mode. Food for thought.