How Do You Explain These Scholarships??

I vote for "jump in the rankings." Remember that bschool and law schools don't have as much overhead as a medical/technical school. Offering a handful of scholarships to them is no big deal especially if you are a part of a large university that can support some loss for future benefits.

If I recall correctly, The University of Texas has second biggest endowment (split 2/3 to UT and 1/3 to Texas A&M) after Harvard - a result of a land grant to the university that included a lot of oil. I read this several years ago so they must be really rolling in cash with the run-up in oil prices.

I believe spending money is definitely a way to push the school up in the rankings. Whether it is scholarship money to attract students, fancy new buildings or pay packages to attract top professors - money helps.

I would agree that it's about climbing the rankings. I think Vanderbilt's fall in the rankings was largely due to GMAT (their average was around 620 at the lowpoint.) Now they have increased it to around 640. I'm sure they want to continue that as raising GMAT is the easiest way to move up the rankings.
I know Emory is another school that is very generous with scholarship money and is able to maintain a high average gmat because of it.
Another point is that if tuition is 35K a year, does it really hurt a school that much to give away 10k - 20k a year to the top applicants?

I think the whole scholarship issue is about trying to "steal" applicants from higher clustered schools, in the hope of getting better students (be them students with higher GMATs or students with better skills and therefore higher salary expectancies or whatever).

Most applicants would probably craft a balanced portfolio with schools spanning no more than a couple of clusters (and some may add some backups which they may end up not attending) and the schools know this. So when, for eg., Emory offers a full scholarship to a student, they are probably trying to convince him of not attending UNC or Tepper but not of turning down, for eg., Columbia, because they know they most likely won't stand a chance even with a full tuition scholarship. UNC or Tepper, in turn, will try to use their scholarship money to try and "steal" applicants from Duke, Ross or Cornell. While these schools will try to "steal" applicants from Ultra Elites. And the Ultra Elites outside H/S (maybe W? dunno about this) may try to use some money to steal a few interesting applicants away from H/S. And H/S will use their money to assist applicants who are quite poor compared to the applicant pool, because they know applicants don't need much financial convincing.

Of course, some schools have more money to give out, so they try to use this to their advantage. Other schools need to rely more on their alumni bases, "fit" or whatever resource they can use.

Cheers. L.

IMO, you hit the bulls eye as you always have been

Although most of your argument makes sense, it is largely a generalization. I know 5 incoming students that have turned down Elites/Ultra Elites to attend Rice (Near Elite Frontier). Thus, students will pass up a higher ranked cluster for a cluster 2 or 3 lower, not just the neighboring cluster. The two schools I am speaking about are UCLA and Ross, just for you curious types. So yes, the $ is used to "steal" away students, but you would be surprised the number of clusters students are willing to jump due to $

squali, I agree, my argument is a generalization. I'm talking about what I think is the most probable/likely scenario, not about specific cases which of course exist, but I estimate are not so common. And again, I'm guessing here as I have no hard data apart from the occasional discussions in this board.

Additional disclaimers:
- I consider Near Elite and Near Elite Frontier schools to overlap significantly outside of the Near Elite's main strength (eg: Simon - finance).
- Some applicants may factor in geographical (on top of financial) considerations. In this case 1 cluster would be "jumped" by the geographical issue and the other one would be "jumped" by the financial issue.

Cheers. L.

I strongly agree with your observation about geographical influence on applicants. In some cases, I feel this might be more persuading than $. For example if a student wanted to work in SoCal it is not out of the question that they would turn down Wharton for UCLA or USC with zero scholarship. To them it just makes sense since the alumni network is stronger from those schools in that region.

This is interesting. CBS specifically only offers scholarships AFTER you've accepted the offer.

How is it possible do use negotiation in this case?

HBS gives out money because it can...or at least that's my interpretation given their large endowmnet. Also, when you visit, Dee says "we have a lot of money for financial aid!" I have a friend who got a half scholarship despite having plenty of money and average HBS credentials. By comparison, BostonArmyGuy said in the Sloan thread that MIT told him they give out only 30 scholarships per year ranging from $5K to full. That's nothing. (Alumn friends have mentioned that they have generous compensation for being a TA...) I read somewhere that Kellogg gives out at least "something" to most students. In other words, it seems like there's a lot of variation by school beyond the "in demand" argument.

Bumping the thread ...

It's hard to really understand how schools use scholarships because so much of what we are going on is anecdotal. "Oh I heard school x is giving out y." None of us really know. Easier to just not even think about it and find a school that is a good fit for you. If you get a scholarship, even better!