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Stanford Misled MBAs On Financial Aid

Stanford GSB’s Knight Management Center

A ‘TROUBLING FINDING’

Stanford MBA student Adam Allcock

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.

The level of detail in the report, which includes an appendix that brings its length to a whopping 378 pages, suggests that the student became nearly obsessed with his own probe of the data. To identify the anonymous students in the dataset, he hunted down LinkedIn profiles, Facebook accounts and other social media. The report contains hundreds of charts and extensive analysis of thousands of data points. Displaying his seemingly formidable skills in data crunching, Allcock applies a good deal of regression analysis to the information he discovered.

Allcock declined a phone interview with Poets&Quants. But in a letter circulating among students on campus, Allcock says he did the report to “hopefully make a positive difference on someone. It took far longer than expected—10 months of my life, 1,500 hours I didn’t have and accompanied by more misery than I care to admit—because I was desperately searching for my mistake and why I could be wrong. I couldn’t find it.”

MBA STUDENT SAYS HE IS ‘CASH POOR’ AT STANFORD

The student describes himself as “cash poor.” “I simply don’t have any money to spend,” writes Allcock. “ I take the maximum loans, can’t raise further finance in the U.S. as I don’t have a credit rating, and I can’t raise funding back in the U.K. as I’m neither a resident nor have an income. As an international student, I am barred from working during the first year, can’t officially have a startup, can’t be a consultant or contractor, and like many, was denied permission from the GSB to work during the second year.”

In the report, Allcock maintains that Stanford may be vulnerable to a lawsuit over its practices and goes so far as to suggest various remedies that he believes Dean Levin should follow to mitigate the school’s exposure to either an external investigation or a lawsuit. The student claims that the school may have exposed itself to a liability that could exceed $110 million by “misrepresenting the financial aid available to students while also discriminating on the basis of gender.”

He provides an example of a proposed disclosure with the following language:

“We are incredibly sorry that this occurred and ask that you forgive us. As guardians of Stanford Graduate School of Business, we have failed in our duty to keep the school safe and have amassed a liability that we need your help to make right. We ask that you waive your right to this balance by donating it to the Stanford Graduate Business School Fund so future students are not punished by our mistakes.”

DEAN HIRES A DATA FORENSICS FIRM TO SEE IF BREACH IS EVEN LARGER THAN REPORTED

Levin, who says he received the student’s report in October, disclosed that the school has hired a data forensics 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.

The school released a statement this morning (Nov. 30) that largely reemphasized Levin’s earlier communication to the GSB community.

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