November 17, 2017
Dear Stanford GSB Community,
I am writing to share information that recently has come to my attention regarding a breakdown in securing confidential data at Stanford GSB, and also about Stanford GSB’s historical financial aid practices. Although we are still in the process of investigating and addressing both issues, I want to share what I have learned and the actions we are taking.
In late October, I received a report from a Stanford GSB student regarding the school’s historical financial aid awards. The report was prepared using confidential data on awards made between 2008 and 2015 that had been improperly stored in a shared folder that was accessible to all Stanford GSB faculty, staff, and students. The records were anonymized and did not include names; however, they included income and asset information, and information on prior employment. The student downloaded the data last winter, re-identified a subset of the records using additional external data, and performed an extensive statistical analysis. The student has agreed to not use the data further and returned all the data to the University Privacy Office.
The report the student prepared describes patterns in historical financial aid awards, and how Stanford GSB has communicated about these awards. In particular, it focuses on variation in the fellowships offered to students with the same calculated assets and costs of attendance, and how awards have correlated with different student characteristics. For instance, in one particular sample, it finds that women appear to have received larger awards. The report argues that Stanford GSB’s communications about the financial aid process have not clearly explained how or why students might have received these varying amounts of fellowship aid.
I want to first address the data security issue raised by this episode. The fact that Stanford GSB confidential data was stored improperly and accessible to faculty, staff, and students is a serious problem. The financial aid information was accessible at least from June 2016, and we have hired a data forensics firm to examine what other files might have been improperly stored and accessible over time. Stanford’s Privacy Office is working to determine any individual or agency reporting requirements we might have. We have taken steps to review the access settings of all our shared folders and correct any inappropriate settings that permit unintended access.
This morning, you also may have read in the Stanford Daily about a data exposure problem involving the university AFS system. I want to emphasize that the issue we have identified is separate and pertains to files being improperly accessible within the Stanford GSB community. Whatever we learn further, 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.
Next, I would like to comment on Stanford GSB’s historical financial aid practices, because despite the problematic circumstances around the data access, the student’s report raises an issue we intend to address. Stanford GSB admits students on a need-blind basis, and admitted students may apply for financial aid. For each applicant, Stanford GSB Financial Aid office calculates a predicted cost of attendance and an expected student contribution. The gap between these amounts is covered by a combination of fellowships and loans. Over the last decade, Stanford GSB has used different formulas to calculate a base level split between fellowship and loans. In addition, the school has offered additional fellowship awards to candidates whose biographies make them particularly compelling and competitive in trying to attract a diverse class.
Stanford GSB’s communications over the years have explained the base level award process, but have not discussed the incremental fellowship awards. I believe that a preferable approach, going forward, is to 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.
As I noted above, we are still gathering information on both issues I have described. 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.
Philip H. Knight Professor and Dean
Stanford Graduate School of Business