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they use fee waivers to increase applications, increased # applications mean they can deny more people, means they are more "selective"
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You know those credit card offers that get mailed to you that say "You are pre-approved! And your membership fee has been waived!" Those don't necessarily mean you're getting a good credit line or even a card. It's just another kind of marketing.
Or think about Illinois. They have decided that they are way better off just not charging a fee. Sure they lose money, but what they get out of it (higher selectivity, plus a few extra people get in that maybe wouldn't have applied to Illinois for $75, a few of those people actually decide to attend, and now you have a better class).
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