Scholarships: Why Many Fail To Negotiate

Top business schools are handing out increasing amounts of cash to lure applicants

Another Indian student, Abinesh Nimalan, brought to the admissions and scholarships game a 760 GMAT score and eight years’ experience in product development for Motorola. Carnegie Mellon University’s Tepper School of Business offered him a $40,000 scholarship, while the University of North Carolina’s Kenan-Flagler Business School tossed him a full ride, worth $115,000, plus an option for a loan without a co-signer.

“I kind of knew that I couldn’t have gotten Tepper to match Kenan-Flagler’s offer – there was quite a bit of a disparity,” says Nimalan, 34. “Given that, I didn’t really think of negotiating with Tepper.”

Dana Buchbut received admissions and scholarship offers from five schools, three of them in the top five of most rankings. A medical doctor and reservist lieutenant in the Israel Defense Forces, Buchbut, 31, scored 750 on the GMAT. In Tel Aviv, she’d run the largest sexually transmitted disease clinic in the Middle East, and her publication credits include “Synergy-S Stereotactic Radiosurgery for Spinal Tumors” in the Israel Medical Association Journal and “An Animal Model for Chemotherapy-Associated SteatoHepatitis (CASH) and Its Prevention by the Oral Administration of Fatty Acid Bile Conjugate (FABAC)” in the journal Cancer.

TREADING AN INSPIRING PATH

MIT’s Sloan School of Management offered Buchbut a $60,000 scholarship, not the highest offer from the five schools. However, when she was in medical school in Israel, her father had taken her on a trip to MIT. “I was really fascinated by the innovation and the entrepreneurial environment,” she says. While deciding which B-school to go to, she visited Sloan again, met students and staff, and considered the outcome for two other Israeli doctors who had attended Sloan and gone on to become successful entrepreneurs in the medical devices field in Boston.

Because she intends to pursue a career in health care entrepreneurship, Sloan topped her list. “I basically want to combine medical experience and knowledge, and things that I will learn at Sloan, financial knowledge, and leadership,” Buchbut says.

Buchbut, too, made an intelligent choice, enrolling at Sloan because she felt it would fit her best.

She didn’t try to get more funding than the school had offered, but MIT is not known for its generosity, and an attempt to negotiate a more lucrative scholarship may well have been futile. Still, you never know till you try.

Research conducted by Sloan second-year MBA candidate Rachel Patterson indicates most applicants offered scholarships at the school don’t attempt to enrich the proposals. Patterson herself, accepted at Sloan and U.C. Berkeley’s Haas School of Business, had been offered nothing by Haas but received a $15,000 Dean’s Fellowship offer from MIT. While the funding was “a drop in the bucket in the grand scheme of things” and didn’t play a significant role in her decision-making, once she was in the student senate she began researching the effects of scholarships. Patterson says she’s talked to a dozen or so other Dean’s Fellowship recipients, and found that only a small handful had attempted negotiation. None of them ended up choosing Sloan because it had offered them more than another school, but Sloan’s fellowship offers appeared to have “pushed them over the edge,” Patterson says.

GIVE THEM SOMETHING TO MAKE THEM FEEL OK

Patterson has a theory: a highly ranked school such as Sloan doesn’t necessarily need to match scholarship offers from other schools, but even a relatively small amount of funding can tip the scales in its favor. A hypothetical applicant who received a $40,000 offer from Northwestern University’s Kellogg School of Management but nothing from Sloan might negotiate at MIT for a Dean’s Fellowship, she suggests.

“That $15,000 is, I’ve heard from other students, enough to choose Sloan . . . and not feel bad about turning down $40,000,” Patterson says. The reason: Small but still consequential grants send a message that a school really wants a candidate and that sense of being pursued can often lead an accepted applicant to enroll.

Judith Silverman Hodara, a director at Fortuna Admissions who had been head of admissions at Wharton, agrees with Patterson’s theory. “That totally rings true,” Hodara says, adding that it’s not just the MBA applicant who needs to feel better about turning down high scholarship offers.

“It makes it slightly more palatable to say to their family, to say to their parents, “And I’m special enough that I got X,'” Hodara says. “$15,000 seems about right.”

B-school financial aid officers, did you hear that?