Stanford University Graduate School of Business – Ethan Baron photo
Stanford Graduate School of Business is publicly admitting that it misled thousands of applicants and donors about the way it distributes fellowship aid and financial assistance to its MBA students. The disclosure came to light as a result of a computer breach that exposed 14 terabytes of highly confidential student data detailing the most recent 5,120 financial aid applications from 2,288 students, spanning a seven-year period from 2008-2009 to 2015-2016.
The information was unearthed by a current MBA student, Adam Allcock, in February of this year from a shared network directory accessible to any student, faculty member or staffer of the business school. In the same month, on Feb. 23, the student reported the breach to Jack Edwards, director of financial aid, and the records were removed within an hour of his meeting with Edwards.
Allock, however, says he spent 1,500 hours analyzing the data and compiling an 88-page report on it. His conclusion: “The GSB secretly ranks students as to how valuable (or replaceable) they were seen, and awarded financial aid on that basis. Not only has the GSB also been systematically discriminating by gender, international status and more while lying to their faces for the last 10 to ~25 years.”
Allcock found that Stanford had routinely granted fellowship money to students without regard to their financial needs, often favoring admits who were female and those from the financial sector, even though many had more savings than students who received no scholarship help or less financial support. His analysis also found what he termed “systemic biases against international students…This is inconsisent with a need-based financial aid system,” he wrote in the report. A spokesperson for the school could not be reached for comment at the time of publication.
DEAN CONCEDES SCHOOL PROVIDES NON-FINANCIAL NEED SUPPORT DESPITE CLAIMS TO CONTRARY
Stanford GSB Dean Jonathan Levin
Allcock is an international MBA student who came to Stanford in 2016 from the United Kingdom where he had been the founder of two startups, including a consulting firm for manufacturing companies, according to his LinkedIn profile. Though he is a beneficiary of financial aid at Stanford, Allcock has maxed out on student loans to finance his education, according to a letter he sent to students.
The existence of the report—leaked to Poets&Quants and apparently circulating among students on campus—was made public nearly two weeks ago by Stanford GSB Dean Jon Levin who conceded that the school had failed to come clean on how it distributes financial awards to students and acknowledged the breach of confidential student data.
In a statement to the GSB community issued at 6:39 p.m. on a Friday, Nov. 17, GSB Dean Jon Levin said the data has been “improperly stored in a shared folder that was accessible to all GSB faculty, staff and students. The records were anonymized and did not include names; however, they included income and asset information, and information on prior employment.”
DEAN PLEDGES TO BE ‘SIGNIFICANTLY MORE TRANSPARENT’ ON FINANCIAL AID AWARDS
Though the school has insisted that it does not grant fellowship awards on the basis of merit, Dean Levin wrote that the school “has offered additional fellowship awards to candidates whose biographies make them particularly compelling and competitive in trying to attract a diverse class.”
He promised that the school would be “significantly more transparent about the principles and objectives being applied in making financial aid awards, and about how different awards are made. We are committed to working on this for the current admissions cycle.”
Scholarship awards have become an important competitive weapon for business schools to win over highly desired applicants. In recent years, there has been an arm’s race of sorts for scholarships and Stanford has been among the most generous. In any given year, the school will hand out more than $16 million in fellowship awards, an amount that represented a 31% discount on its published tuition rates. Slightly more than half of Stanford MBA students receive fellowship support, with the average grant at roughly $36,000.
‘THE GSB HAS MISREPRESNETED ITS FINANCIAL AID SYSTEM’
But through the years, Stanford has insisted that it only awards scholarship money on the basis of financial need—not merit. Most of its peer schools, with the exception of Harvard Business School, make no such claim. More often than not, they dole out scholarship dollars to increase the quality and diversity of a class, with a good deal of money going to candidates with high GMAT scores.
When Allcock went through the confidential data, matching the internal records with the profiles of students on LinkedIn and Facebook, he was astonished by what he found. “GSB fellowships were only in part determined by a student’s financial need despite publicly repeated claims to the contrary,” he wrote. “The GSB has misrepresented and advertised its financial aid system to the detriment of students who make tangible financial decisions on the basis of these representations. Students with identical financial situations receive vastly different GSB fellowships awards and without any knowledge can graduate with up to an additional $80,000 of debt…”
When Allcock met with financial aid director Edwards, he says that Edwards told him that the minimum base loan at Stanford was $28,500 and the maximum fellowship award was $35,000. But Allcock had discovered in the data he reviewed that the school had given at least 53 awards to 32 students for more than $75,000 a year. Roughly 230 students had received fellowship grants that represented full rides: full tuition or full tuition plus fees. The report claims that scholarships could be three times larger for students with identical financial needs.
A ‘TROUBLING FINDING’
And preferential treatment based on gender was apparent. In the Class of 2015, for example, he estimates that female students received average fellowship awards of $37,357 versus $31,059 for men, even though women had higher cash savings, $23,640 versus $20,300. Though Allcock calls this a “troubling finding,” it’s well known that business schools have substantially increased their scholarship support for women to increase their enrollment in MBA programs.
Levin, who says he received the student’s report in October, disclosed that the school has hired a data forenscis firm to determine what other files were improperly stored and accessible over time. “Whatever we learn further,” he wrote, “there is no excuse for this compromise of privacy and security, and I intend to do everything possible to ensure that it does not happen in the future.”
Levin says the school is still in the process of investigating and addressing both the data breach and its system of financial aid. “Although it is likely to take some time to resolve them, I feel it is important from the start to communicate in an open and forthright way, and I expect to communicate again as we move forward,” he wrote.
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