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Does anyone know why some schools might send an e-mail strongly encouraging someone to apply, while others will send a fee waiver? Is one better than the other? Are there some schools that just don't send fee waivers on principle? Apparently there is a forum dedicated just to which schools have sent out fee waivers, but I have yet to find it.

Fee waivers do not always mean you are a strong candidate for the school. A good part of the time schools hand them out to increase their yield (number of applications vs. number of students accepted). As far as the "encourage to apply" language is concerned, my experience with it is limited but I'd imagine it is along similar lines.

"Encourage to apply" = worthless. "Fee waiver" = worth $X for app fee. Don't read much into the fee waiver; some schools send fee waivers just to get their apps up/acceptance rate down.