It is up to the particular campus Panhellenic. Most schools do count upperclassmen as part of quota. Some schools have a separate quota for upperclassmen. Others have "free" upperclassmen, meaning no limit.
I was actually thinking about juniors pledging the other day. I thought about why juniors are automatically cut from more competitive chapters; it's essentially because a chapter will have to replace her sooner than they would a freshman.
Suppose a "top tier" chapter took a junior (or a few) because they LIKE her and determine that she will be a committed member for 2 years. Two years later they have an extra spot open (or a few extra spots). Since this chapter is so desirable, they should have no problem filling those spots with PNMs that they want, be it during informal recruitment by inviting close friends of members, snapping a few extra girls, being eligible to be matched to more during formal recruitment, etc. I doubt that it would tarnish a "good" reputation by *gasp* participating in COB! If they are perceived as desirable, they will fill the spots!
Obviously, a pledge class full of juniors would be disastrous since it would leave tons of spots to fill. But when quota is 40+, what is the harm of taking quality upperclassmen? I understand that "top tier" chapters are the ones that have to make the heaviest cuts after the first round so often they look for a reason, any reason, to cut a PNM. It is just so deeply ingrained into the heads of most actives and alumnae that juniors=bad that we don't question why so much anymore.
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