$7k is actually on the low end nowadays :). I was as surprised as you, but talking to my friends, salaries seem to have shot up this past year. Dropbox, Google, FB, all pay over $7k, some well over that amount.
Wow. Fuck me only negotiating for $5500/month at a start-up. Many of my other internship applications got lost in bureaucracy, so I didn't get competing offers (ha, in one case, I failed to get an internship offer from a firm that once offered me a full-time job) to see how far up things had shot.
Just want to emphasize my point on money not being a factor in your decision. Consider you could be getting paid $8500 by working for <big company x>. That's $9000 over your summer, peanuts compared to your life earnings. Don't sweat it, you'll have the awesome experience of working for a small startup (something I never did), and probably make some really good friends. Enjoy life, you're getting paid many multiples what people with college degrees are making :).
$7k not-including-housing is only normal if you're a returning intern. Otherwise, it's for the top tier. Last summer, Google was $6667/month for undergrad SWE interns not including housing stipend. The stipend should be a one-time $3500 (last summer, many interns could choose corporate housing instead of the $3500 stipend).
You are correct. This is totally standard nowadays. Source: I've been to about a billion recruiting fairs lately and have a bunch of knowledge of competing offers made to my intern candidates and yes, this is correct, and not just for Google interns anymore.
Including housing stipends of about 1k, but none of the other benefits, most of my friends and I are going to be making almost 7k. Making 7k not including housing would be on the very high end (for non-returners).
Will you be interning in Seattle? If so, you're likely getting an equivalent deal to $8.5k in the Valley. Washington has no income tax and a way lower cost of living.
Even if not in Seattle, the difference between $6k and $8.5k is negligible for a 3 month internship relative to your life earnings.
Yes, I will be in Seattle. Sadly we still have to pay the state taxes of our tax home, so the tax rate of Washington versus California doesn't really affect our pay.
However, It's only negligible if it doesn't correlate linearly with a starting salary.
If my starting salary is 20% lower at Amazon than anywhere else, you can bet I won't be returning after my internship.
