When fiction writers get to the end of their MFA they're expected to produce a project that is "book length," but they face the decision: do I make a collection of short stories or do I write a novel?
The short story collection tends to be the favorite in practice while the novel is what everyone says they'd like to do until they face having to do it.
There's points in favor of each.
Short Story Collection
The reason I say the short story collection tends to be what most people do is because it's what MFA workshops have set you up to do. In workshop you write and submit short stories, you get feedback, you find things to change and you make them better. Now, all you need to do is edit those stories on your own and you're halfway to a collection.
For people whom revision is easier than drafting, this is a the option of choice.
For people who can't get their minds around the length or structure of a novel, then the collection is, without question, the way to go. Often MFA programs don't have coursework on writing novels, or it's not as in depth as the course work on writing the short story.
Often, the collection seems like the ready-made option. Particularly when you have that moment of realization where you realize that the path of least resistance to your degree is to brush off a group of desperate stories whose only connective tissue is that you wrote them and call them "collected." It seems like a cop out to me, but a reasonable cop out. Particularly if your style/subject matter hasn't changed much while you've been in the MFA program. Then your stories are probably much more cohesive than mine as I tried a bunch of different styles and then switched gears from realism to fantasy.
Also, the "MFA project" asks you to present the fruits of your education. It is not specifically designed to ask you to produce something that anyone would ever want to publish as a book.
Which brings me to: short story collections are hard to sell.
There are three main ways to get a short story collection sold. (1) You win one of the short story collection contests that have publication attached to them like the Flannery O'Connor Award, the Iowa Short Fiction Award, or the AWP Award Series (there are a couple others but they don't come to mind). (2) You get a contract for a novel in which your agent convinces them to buy your collection as a "bonus"--mostly this is a "bonus" for the writer and a grudgingly accepted ultimatum for the publisher, and another reason why agents are so cool. (3) You get 3-12 stories published by The New Yorker and some publisher wants to collect and reprint them. There are other ways, but those are the three big ones. All other ways are extremely hard sells.*
Now consider how many MFA thesis collections are out there in the world and you're suddenly wondering why you'd want to put energy into a collection when you could be putting it into a novel -- or at least that's what I'm wondering.
The big thing the novel has going for it is that it can be sold. That is, it's likely that (all prose being considered equal) someone will want to publish it. All that time, effort, and editing will result in a bound, typeset version of something with your name on it. Even if the cover sucks it's still your book.
The big downside to writing the novel as MFA thesis is that the MFA is not geared toward getting you to produce a novel. As mentioned above, it's the short story that's the perfect size and shape for weekly workshops, not the baggy monsters. Therefore, you'll likely be generating new material and editing it in a shorter span of time.
Then there's the whole has anybody taught you how to write a novel? question which seems to trip people up. I've heard quiet a few people say that they won't try to write a novel (including well published short storyists) because they just don't know how to put one together. Although if you look outside your MFA you can almost always find someone to teach you or materials to use to teach yourself. (Screenplay structure, as I understand it, is where to start looking.)
Then there's the not to be overlooked notion of having an idea big enough to fill a novel.
Where I'm at
See, I thought I had a plan (a novel). Then I had another plan (a story collection)--a plan I put in writing this time! And now I don't know if that plan is as good as the new-new plan (a novel, different from the first novel which I now know I couldn't sustain).
The new-new plan is, albeit, new and shiny. But I might be in the throws of saying hey, if my short story collection idea is going to be as much work as my novel idea then why don't I write the novel, have more fun, and end up with a more viable product at the end?
My advisor recently asked me to crunch numbers and find out where I'm at so that we can think about how best to spend my time. She didn't commit to one side of the debate or the other, but the mere suggestion of number crunching had me thinking all weekend.
The question is not as easy to answer as one would think. I've known a lot of people who said they were going to write a novel for their thesis project. It was only logical, and when it came down to it, logic changed and the logical thing to do was a collection. And now I don't know where I'm going to land with four months until it's due.
*This, of course, makes me laugh. Like any of those three are particularly easy.