The dean of Stanford’s Graduate School of Business has publicly apologized to students, faculty and staff for how the school has handled access to confidential student and staff data on computer servers. His regrets occur after the university disclosed a second incident in which the school accidentally allowed access to the names, birthdates, Social Security numbers and salary information for nearly 10,000 non-teaching university employees.
“These events are deeply regrettable, and I would like to express my apologies, personally and on behalf of the school, to anyone whose personal information might potentially have been compromised,” wrote Levin in a Nov. 30 email to the GSB community. “I, like many of you, remain disturbed by the errors that contributed to this unacceptable situation. We are now living in a world where we can easily generate and share large amounts of sensitive data, and we have not adapted. This in no way excuses what has happened, or comforts those whose data we were responsible for and did not secure adequately. But it means we should make every effort to learn and improve from our mistakes and errors.”
Two weeks earlier, Dean Levin disclosed that a computer breach at the business school had allowed at least one MBA student to gain access to confidential financial aid information for MBA students (see Stanford GSB Misled Applicants On Financial Aid). The breach 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.
DEAN LEVIN HAS NOT APOLOGIZED FOR THE SCHOOL’S DELIBERATELY MISLEADING FINANCIAL AID POLICIES
In his earlier communication, issued at 6:39 p.m. on a Friday, Nov. 17, before Thanksgiving, Levin conceded that the school had misled thousands of applicants to its MBA program on how it distributes financial aid to students. For years, the school has consistently maintained that it only granted scholarship support on the basis of a student’s financial need. But an MBA student, Adam Allcock, who gained access to the financial aid files found that was untrue. Instead, the school has been using fellowship grants to encourage the enrollment of women, domestic students and those with finance backgrounds regardless of their financial need. Levin has yet to apologize to students and alumni for the school’s failure to honestly communicate how it distributes more than $16 million a year in fellowship grants.
In a letter circulating among students on campus, Allcock has called out Dean Levin for how he has handled his communication of the school’s financial aid strategy. “I didn’t hear a ‘sorry’ in your message, or even an admittance that what the GSB had been doing was wrong,” wrote Allcock, a Class of 2018 student, who says he spent ten months analyzing the data to conclude that the business school has been less than honest about its scholarship policies. “Instead, I heard ‘sorry we got caught.’ The GSB secretly ranks students as to how valuable (or replaceable) they were seen, and awarded financial aid on that basis…The GSB also been systematically discriminating by gender, international status and more while lying to their faces for the last 10 to ~25 years.”
While many of the GSB’s peer schools dole out aid on the basis of both financial need and merit, Stanford and Harvard Business School are the only schools claiming that all of their scholarship support is based solely on need. The fact that Stanford has showered scholarship dollars on candidates with finance backgrounds–a key finding of the report that Allcock had sent to Dean Levin in October–suggests an admissions strategy designed to help the school maintain its lead in post-MBA compensation, a major component of MBA rankings. Typically, those candidates would be among the least requiring support on the basis of need.
STUDENT TO DEAN: ‘I STILL DON’T THINK YOU GET WHAT THIS MEANS TO STUDENTS’
Prior work experience in finance is generally required to land jobs in the most lucrative finance fields in private equity, venture capital and hedge funds. Stanford sends a higher percentage of its MBAs into higher paying PE and VC jobs than Wharton, Chicago Booth, Columbia, or Harvard. Last year the median pay for the 12% of the students that went into private equity was a class-high $177,500, well above the overall median of $136,000. Venture capital firms, which hired 7% of last year’s Stanford crop, paid median starting salaries of $167,500. Placing students in those jobs allows the school to consistently post the highest starting compensation for MBA graduates of any school in the world.
In his criticism of Dean Levin, Allcock asserts that the dean has failed to adequately address the impact the school’s financial aid policies have had on students and graduates. “I still don’t think you get what this means to students,” wrote Allcock in the email obtained by Poets&Quants. “Whether it’s to those students that were punished for saving before school, those that received more than expected and feel bad for it, or those that were deemed replaceable in your eyes and received an amount far below their requirements, financial aid is the determining factor in so much of our lives. It determines how much debt we’ll graduate with, what job we take after school, what country we can afford to live in and during school, whether we can be a member of the community. To me, it means missing out, and I’m sorry to my class for having made so many excuses as to why I can’t attend things.”
Though the school has insisted that it does not grant fellowship awards on the basis of merit, Dean Levin conceded two weeks ago that the GSB “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.”
CONTINUING WORK WITH A FORENSICS FIRM TO PREVENT FUTURE LEAKS
Levin, a highly regarded economist at Stanford University, became dean of the business school in September of 2016, after Dean Garth Saloner resigned in the midst of a major controversy that drew headlines all over the world. Saloner was found to be having an affair with a GSB professor who at the time was married to another professor at the business school. Instead of recusing himself from a personnel decision on the woman’s husband, Saloner gave direct approval of a decision to withdraw a loan that helped the couple buy a house and locate to Silicon Valley while in a relationship with his wife.
In his latest communication to students, faculty and staff, Leven explained that “the exposure of the financial aid and employee data came about in different ways, and they show that we must immediately take steps to improve our data security practices. The financial aid information was stored improperly in a shared folder in June 2016. The employee information, which had been retained on our drive for almost ten years, became exposed as the result of a mistaken change in permission settings in September 2016. Later, in February 2017, staff members learned that a Stanford GSB student had accessed confidential information on financial aid. At that time, the Stanford GSB Digital Solutions team recognized the permission problem and promptly secured the J: Drive folders. However, they did not understand the scope of the exposure and did not escalate it to me or relevant university offices for further investigation.
“The episode makes clear that we will need to implement improved practices around data security, and especially, to ensure that if problems are identified, they are escalated and promptly addressed in full,” added Levin. “To this end, we will be taking a number of actions. First, we will continue to work with the forensics firm and the Information Security and University Privacy Offices on the investigation. Second, we will be making some organizational changes in our Digital Solutions group. Third, we will be working internally at Stanford GSB and with others at the University to improve our file sharing systems and to build greater awareness in handling confidential data, assigning correct file permissions, and in identifying and reporting potential problems. I am confident that these steps can help us improve and strengthen our practices, and the institution.”