Harbus Editors Accuse Stanford GSB Dean Of “Gross Negligence”

Incoming dean Jonathan Levin stopped by briefly to introduce himself to the room of journalists. Photo by Nathan Allen

The editors of the MBA student newspaper at Harvard Business School accused the administration of rival Stanford Graduate School of Business of “gross negligence” in handling a controversy over financial aid. The editorial, entitled “Can A Business School Die Of Shame?,” says the storm occurring over the issue is a case study in how not to do damage control. The MBA editors criticism of the dean of a school that is Harvard’s chief rival in business education is unprecedented..

For the past three weeks, Stanford Dean Jonathan Levin has been dealing with the fallout from the disclosure that the school’s long-time claims to only provide scholarship dollars to applicants and students on the basis of financial need is untrue. He has issued three public statements in three weeks about the issue, mainly focusing on a data breach that allowed one of the school’s current MBA students to access confidential financial aid data on the school’s shared network servers.

The student, Adam 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 inconsistent with a need-based financial aid system,” he wrote in an extensive report he did on the data.

‘A CASE STUDY IN HOW NOT TO DO DAMAGE CONTROL’

“We feel a tremendous amount of sympathy to our peers at Stanford GSB because had this happened at HBS, there is no doubt that our student body would be outraged beyond words,” wrote the editors of The Harbus in an unsigned editorial. “Not only is regressive economic discrimination in financial aid a breathtaking breach of trust, and a shocking disaffirmation of the school’s purported egalitarian values, but we believe that it also represents gross negligence by the Stanford Administration in their duty to uphold the most important element of any elite business school degree: the school’s brand.”

Though the school’s financial aid policies precede Dean Levin, who became dean in September of 2016, The Harbus editors took specific aim at how he has handled what has become the first public test of his leadership ability. “The response offered by Stanford administration offers a case study to MBA students in exactly what they should not do when in damage control,” according to The Harbus. “In seeking to explain the episode, Stanford GSB Dean John Levin diverted attention away from the core objection, focusing almost exclusively on the issue of the data security ­ a serious technical breach of confidence to be sure, but one that pales in comparison to the revealed compromise in school values. In the few words he does devote to the true problem of the administration’s conduct, Dean Levin minimizes the systemic gender, economic, and national origin discrimination as a mere miscommunication about ‘base level’ versus ‘incremental’ fellowship awards. Instead of showing leadership by taking responsibility for these shortcomings, he offers only the vague promise to be ‘significantly more transparent about the principles and objectives being applied in making financial aid awards.’

“What are those objectives, exactly? In that same statement Dean Levin explains 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.’ We have already seen that that group includes those who previously worked in finance who can help Stanford’s position on MBA program rankings by virtue of their high post-MBA salaries. But another set of students come to mind as likely beneficiaries of Stanford’s largesse: the prospective students who were also admitted to other top-tier business schools.

DEAN LEVIN ALSO CRITICIZED BY STANFORD UNIVERSITY’S OWN STUDENT NEWSPAPER’

“If these allegations are true and these implications are correct, then the administrators of Stanford GSB are saying loud and clear that they value their school’s competitive position vs. its peers more highly than they do the promises they make to its own students. It remains to be seen what the long-term effects to Stanford’s brand will be, but we hope that administrators from all MBA programs will look upon these allegations as a perfect case study for trust in branding: that of the bad protagonist.”

The Harbus editors have not been the first to criticize Dean Levin’s handling of the controversy. Allcock, the student who revealed that Stanford had misled thousands of applicants, students and alumni about its fellowship awards, also called out the dean after Levin’s first statement.

In a letter written by Allcock sent to his fellow students, Allcock wrote. “I didn’t hear a ‘sorry’ in your message, or even an admittance that what the GSB had been doing was wrong. 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.”

Chronology of What Happened at Stanford

 

DateEvent
June, 2016Some MBA student financial aid records are stored improperly in a shared folder
September, 2016Jonathan Levin, a superstar professor in Stanford’s economics department, becomes dean of the Gradaute School of Business, succeeding Garth Saloner who had resigned
September, 2016More financial aid records for MBA students became accessible on the same server, now totaling 5,120 financial aid applications from 2,288 students
January, 2017First-year MBA student Adam Allcock accidentally gained access to the financial aid records on a shared network server open to the entire GSB community
February, 2017Allcock informs financial aid director Jack Edwards of the data breach
February, 2017Chief Digital Officer Ranga Jayaraman’s team begins to lock down the system, securing all files by early March
October, 2017Allcock sends to GSB Dean Jonathan Levin  a 378-page analysis of GSB’s financial aid policies, finding that the school had misled thousands of applicants and students for years
Nov. 17, 2017Dean Levin publicly informs GSB community of breach and concedes the school misled applicants that all its fellowship awards had been granted on the basis of financial need when that was untrue
Nov. 30, 2017Dean Levin apologizes for the data breach and says he was not informed of the problem until eight months after Allcock told Edwards in financial aid
Dec. 1, 2017In a contrite email to colleagues, Chief Digital Officer Jayaraman says he is leaving his job after being fired by Dean Levin
Dec. 7, 2017Dean Levin issues third statement in three weeks, conceding that the school’s financial aid policies have failed to meet the expectations of students and alumni donors and pledged that the school would be more transparent
Dec. 9, 2017MBA editors of The Harbus at Harvard Business School accuse GSB Dean Levin of “gross negligence” in handling the controversy
  • Observation

    You seem to spend a lot of time on this page. This article get under your skin much?

  • Ouch

    By the way, only reason GSB is lower in most rankings is because of recruiter scores / employment rate at graduation. And that’s because people at Stanford aren’t going to work at Proctor & Gamble, Pfizer, General Mills, and the kind of companies that are surveyed which HBSers go to in droves. They’re founding their own thing, working at small places, or working in investing gigs at places that aren’t getting surveyed by US News. And Stanford students are willing to wait to find the perfect opportunity and don’t feel the need to take whatever by graduation — supply/demand forces allow them to do that. They have the smallest number of graduates every year of the elite schools, so they can be choosy. This is a relative strength and not a weakness. Bottom line is Stanford is most selective, highest GPA/GMAT, highest starting salary, and take most cross-admits with every other bschool. What else do you need to know?

  • Ouch

    You’ll be waiting for that e-mail a long time, Adam.

  • Ouch

    Yeah like I believe this…why so bitter if you got in? Anyone in the know is aware that HBS is a school for GSB rejects. Just doing the math, less than one out of every ten students at HBS had an offer from Stanford. By the way, I don’t even go to GSB, was just stating the obvious based on the tone of the article. The insecurity is obvious. And if you really are one of the Harbus editors who wrote this piece good going basically revealing your identity on a public forum with such a ridiculous comment attached to it. Real smart.

  • Adam Allcock

    I’d appreciate if you emailed me.

  • Harbus

    Harbus Editor Here! Just want to point out that I did, in fact, get into GSB and turned them down! Looks like you’ll have find another way to excuse your school’s coordinated campaign of lying to students, offering unfair financial aid packages, and gaming the b-school rankings. Sad that GSB thought it was better to betray their students in order to play little brother to HBS in the rankings!

  • Ouch

    It must have been tough for the authors of this Harbus piece when they were rejected by the GSB. Still stings, I’m sure.

  • slayer

    HBS should get a life. like really. the insecurity shows from miles away. Btw you know what they say about people in glass houses…

  • Adam Allcock

    > also notorious for over-reporting future benefits of stock options.

    Rating systems do not included variable pay like options, so if anything they drastically underestimate the earnings of all those GSB alums that ‘go into tech.’

  • heyholetsgo

    1.) Talking about the “quality” of yield. GSB is more self-selective in who it admits than HBS, which results in a higher yield. The more interesting test is asking 1000 MBA applicants what their top MBA choice would be… My guess is HBS would win hand over fist for most industries outside of tech.
    2.) Who says GSB alums get paid more? GSB alums go into tech, which is highly compensated, concentrated in the most expensive part of the US and also notorious for over-reporting future benefits of stock options. I have yet to meet a GSB alum that gets paid more working for the same employer.

    Lastly, GSB has for reasons that are beyond me a no d-bag self-image. Look at this thread, in the workplace and ask recruiters. Maybe GSB should fix touchy feely so that students get a realistic self-image 😉

  • Split

    Slow day? Given the source, this is a pretty silly article and hardly qualifies as newsworthy.

  • Hahahah

    What do an HBS and GSB student have in common?

    They both got into HBS.

  • HARBUS

    If brand is all that matters, and HBS’s is stronger, then why do employer’s pay more for GSB grads?

  • Chicago84

    I don’t think anyone other than a fellow GSB’er would say any school is “way ahead of HBS”. Pretty ironic that you bring up self-righteousness only then to make a claim like this.

    Harvard is Harvard – they need to get over it, and you need to get over it. I’d rather be the HBS of business education than the YLS of business education any day… business is brand. Period. But what do I know, I’m just a lowly Tuck alum 😛

  • lol

    oh please, like HBS hasn’t been doing this too. people in glass houses…

  • HARBUS

    I wouldn’t say HBS sucks — their yield is impressive. But in terms of admissions stats that’s really the only thing they hold over Stanford. The problem is people are not contextualizing it as the article points out. Stanford’s absolute yield is lower, but HBS’s 90pct is not nearly as impressive as Stanford’s on a qualitative basis.

    Stanford has a much lower admit rate, higher GPA/GMAT, qualitatively more impressive yield, and a higher average starting salary in every industry. They’ve taken the majority of dual admits with HBS for over a decade now. They are the Yale Law of the business school world and are way ahead of HBS at this point. It should be obvious to any applicant, and apparently it is because the ones strong enough to get into both go to Stanford more often than not.

  • Bill

    Everyone should read this. I’ve known this for years, but most people are lazy and can’t do basic math- hence don’t understand how much HBS sucks.

  • HARBUS

    Those that live in glass houses shouldn’t throw stones. HBS throws out merit aid incredibly aggressively, especially if someone also got into Stanford. I was a dual-admit and know of at least four or five classmates that had the same exact experience. It’s this kind of self-righteous article that at least in part explains why so few people who get into both go to Harvard these days. Doesn’t matter how much money HBS throws out, they’re still losing big time to Stanford in attracting the very top applicants admitted to both programs. Detractors who point to HBS’s higher yield should read this article:

    http://99colleges.com/stanford-yield-better-than-that-of-hbs/

  • peter

    HBS is a joke. They are a worse offender than GSB. Not only do they not care about the needs based stuff, but they justify their admissions decisions on need to begin with.

  • True

    HBS is so full of crap. Those people are ridiculous. Where is their proof that they don’t do a very similar thing, because I know that they do.

  • Curious

    Has anyone at HBS asked/reconfirmed that HBS does not do this either? Usually these two schools are in lock step with each other.

  • anonymous

    Multiple examples of Harvard offering more money to dual admits. Purely need-based?! Haha. I would seat tight here on their place.

  • anonymous

    Silly of Harvard to use this situation to try winning a fight over dual admits that they are loosing to Stanford for years. Harvard does this all too! They just didn’t get caught!