Entry level electric guitars provide a great opportunity for students of any age to get started with the guitar without spending a ton of cash. I always recommend purchasing a guitar in the $100-200 range before spending big in an instrument that may or may not work out for you.
Upgrading isn't a problem. In the future you can always spend money on the $500-$5,000 guitar of your dreams. Once you get to that point, collecting guitars becomes a little bit like a disease, so you likely won't feel bad that you bought the entry level guitar. It's just one more to hang on your wall, even if it doesn't carry a prestigious brand name.
I have had the opportunity to get to know a couple models of entry level electric guitars lately, so here is my take on those, from most favorite to least.
Fender Squier Start Playing Stratocaster
This is my favorite package of the bunch. I had a couple of these, and they were the only entry level guitar I thought about keeping. The sunburst is really sharp, especially for a guitar of this price range.
Of all the kits I checked, this had by far the nicest accessories. The SP-10 amp is adequate, and the other accessories such as the stand and bag are really impressive in quality.
While this may set you back an extra $50 or $75, its worth every penny. This is a guitar you can play long after you are a proficient player with other guitars in your collection.
Fender Squier Starcaster
This kit is very similar to the Start Playing kit above, but without some of the bells and whistles. The electronics and the neck on the two were nearly identical, but this kit lacks some of the nicer accessories. The kit features the same SP-10 amplifier. This is a great budget choice.
Maestro by Gibson
These guitars carry the Gibson name, but not much else of value. While lower cost materials are expected, the workmanship on these suffer as well. Frequently frets are either too long or not seated correctly, causing a rough or even sharp ride when sliding your hand up and down the neck.
You can frequently find the guitar package used (with amp, strap, cable, bag, etc) for around $80 on eBay. They are worth the money at that price, but I wouldn't pay much more than that.
This guitar is fairly unassuming in price, features, and quality. Combine a brand without much equity for nice instruments with a package designed to be a low price leader, and you have the Peavey Rockmaster. The guitars I had contact with all had warped necks that required severe adjustment. The cosmetics were nice, and the guitars were fairly well built.