From About.com College Admissions blog:
May Day is fast approaching, the date by which most colleges require students to make a decision about whether or not they will accept an offer of admission. Some students, for financial or personal reasons, don’t feel ready to make such an important decision yet. This leads many students to “double deposit.” That is, they send a check and a promise to attend to more than one school.
The practice has consequences other than the obvious throwing away of several hundred dollars. For one, colleges rely on deposits to predict the size of the incoming class. When double-depositers make the deposit numbers an unreliable measure, colleges are forced to create large waitlists in case they miss their enrollment targets. In short, double-depositing is a headache for colleges, and worse yet, it keeps thousands of students around the country in waitlist limbo.