Good question. It can actually help you. History has shown that if two applicants are a toss-up, preference is often given to the one who graduated from the school's undergraduate program. For example, where I went (Duke), we had several classmates who were Duke undergrads, affectionately called "Double Dookies"

If you are sweating applications, make sure you throw one out to your alma mater--you never know, it might just give you the edge.