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What is Financial Aid Gapping?

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College is expensive, and it’s getting more so every year, with the annual cost of attendance at some schools exceeding $70,000. For many families, that cost is difficult or impossible to shoulder out of pocket, meaning that even if you get accepted to your top-choice school, you may not be able to afford it without financial aid.


Many of the best and most popular colleges in the United States offer substantial amounts of financial aid, which can help tremendously to make these schools more accessible. However, when you’re making your college plans, it’s important to recognize that even if financial aid is available, you may not end up receiving enough to attend your school of choice, and that can leave you with some very difficult decisions to make.


Read on to find out more about what a financial aid gap means for you, how you can address it, and how you can prevent it.


What is a Financial Aid Gap?

Need-based financial aid (as opposed to merit-based aid) is awarded based on a two-step process. First, your school has to determine how much money you actually need, which they do by collecting your family’s financial details through financial aid application forms.


Using this data, the school calculates how much money your family can afford to contribute to your college education each year, which is known as the Expected Family Contribution (EFC). The difference between your EFC and the actual cost of attending that college for a year is your demonstrated financial need.


In the second stage of the financial aid process, the school decides how much financial aid to actually offer you. Here’s the catch: your financial aid offer from a school may not match your demonstrated need. In a need-based financial aid system, needier students might have a better chance of getting aid, or might receive a larger amount of aid, but unless the school specifies otherwise, that aid is not guaranteed to actually meet their need.


If the amount of financial aid a school awards you is less than your demonstrated need, the difference is known as a financial aid gap. If you end up with a financial aid gap, you’ll need to find a funding source to bridge that gap in order to attend that college.


Why is a Financial Aid Gap Such a Problem?

Obviously, a financial aid gap poses a challenge for students and their families. Since this gap is left after the financial aid application has been considered and an aid award has been calculated, your avenues for addressing the gap—and the time you have to figure out an answer—are limited.


Many colleges simply don’t have the financial aid budget to meet the full demonstrated need of every single student. The amount of institutional financial aid a particular school has offered you may be all that they can afford to offer, and the rest of the aid budget has likely been assigned to other students already. You may have already exhausted your institutional aid options.


Federal student loans may also not be an option to bridge the gap. At many colleges, the federal loans you’d be eligible for are already calculated into your financial aid award. If so, you can’t simply take out more federal loans; federal loan eligibility and yearly and lifetime totals are limited.


On top of these complications, financial aid awards aren’t determined until after admissions decisions are made. By the time you receive your award and are made aware of the gap, it’s already quite late in the process. You won’t have much time before the May 1st response deadline to review your options, seek other sources of funding, and make a decision.


It’s possible that a financial aid gap may prevent you from attending a particular college. However, you’re not necessarily out of options, even so late in the game. If you and your family can find a way to cover the financial aid gap with funds other than institutional aid, you may still be able to attend a college that hasn’t offered you enough financial aid.

How Can Families Cover the Gap?

First and foremost, if you didn’t receive enough financial aid, you may want to consider submitting a financial aid appeal. As we’ve previously covered in our post Can I Appeal My Financial Aid Award?, an appeal is a formal request to your college to reconsider your financial aid application, and it can sometimes result in your being awarded more aid.


However, always talk to a financial aid officer at your particular college before you decide whether to submit an appeal. Some schools only consider appeals under very specific conditions, and each school has its own submission process, which can take some time. Also, appeals aren’t guaranteed to work, and many different factors determine whether your college has the budget or the desire to offer you additional funds.


Whether or not you choose to appeal your financial aid award, if you want a chance at attending your college of choice despite a gap, you need to start looking for additional funding from sources aside from your school. Every student’s situation is different, but here are some of the funding sources you might look into.


Outside Scholarships and Grants

Grant aid you receive from sources other than your school can be a big help in covering a financial aid gap. Hopefully, you’ve been applying for outside awards throughout the admissions process; many scholarship applications are due well before award letters are sent out. You’ll also want to check your college’s policies for applying outside scholarships to your bill.


Private Student Loans

If you’ve maxed out your government loan eligibility (if any), you may be able to take out student loans from private sources, like banks. However, the terms of these loans are generally less favorable than those of government student loans, and securing a loan may require a credit check and a cosigner. All loans come with risks, and you can face serious consequences if you don’t repay them as required.


Parent Loans

If your parents are able and willing to do so, they might choose to take out their own loans to help you pay for your education. Parent loans can come from government or private sources, and like all loans, they come with certain risks and aren’t appropriate for every family.


Student Income

Money that you earn during the summer or the school year could help cover a financial aid gap, depending on the size of the gap. Remember that most colleges already account for a certain amount of student income when making financial aid calculations and determining your EFC, so you would have to earn more than that amount to make a difference.


Other Family Financial Resources

These resources will depend upon your individual situation; perhaps your family could downsize their home, sell assets, or seek help from other family members. Only you can determine what options you have, if any.


How Can I Prepare Now to Avoid Financial Aid Gaps?

There are no guarantees in college admissions, least of all when it comes to paying for college, and most college applicants experience at least a little frustration and disappointment in the process. However, that doesn’t mean there’s nothing you can do to reduce your chances of experiencing a financial aid gap.


Staying on top of your financial situation and options from the beginning of your admissions journey is key to putting yourself in the most favorable position possible. Here are some specific tips for remaining alert to and heading off the consequences of a potential financial aid gap.


Do Your Research and Manage Your Expectations

Know your prospective college’s financial aid policies and check out how much aid the average student receives. Remember, not every school that offers “need-based financial aid” can or will meet the entirety of your demonstrated financial need. (A few schools do offer explicit guarantees to meet 100% of every domestic student’s financial need; see your admissions office for the specifics.) When you’re making your college list, make sure that you include multiple schools that you anticipate being able to afford.


Apply For As Many Outside Scholarships As You Can

Give yourself the best possible chance at having multiple funding sources that you can use to cover your financial need. Start early and be aware of deadlines. It’s better to have outside aid that you don’t need than to need outside aid that you don’t have.  


Communicate With Your Parents

Need-based financial aid is almost always based upon your parents’ income and assets, not just your own, and parents often end up paying a large portion of college costs. In order to make wise financial decisions regarding college, you need to understand your family’s resources, options, and limitations. These discussions can be tough, but they’re necessary.


Make Contingency Plans

What if you’re accepted to your top-choice college, but you’re not awarded enough aid? What if a school you’re less excited about offers a particularly enticing financial aid package? Would you consider taking a gap year to save up money, or matriculating at one school with the intention to transfer to another later on? Spend some time thinking about how you’ll respond if your initial plan doesn’t work out.


You can’t totally eliminate the possibility that you’ll encounter a financial aid gap. However, by staying informed and exploring a variety of financing options starting early in the college admissions process, you can put yourself in the best possible position to prevent or address any shortfalls in your financial aid.


To learn more about college financing options and what to do if you don’t receive enough financial aid, check out these CollegeVine blog posts:



For even more posts on all things related to paying for college, take a look at our blog’s Financial Aid category.


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Monikah Schuschu
Senior Blogger

Short Bio
Monikah Schuschu is an alumna of Brown University and Harvard University. As a graduate student, she took a job at the Harvard College Office of Financial Aid and Admissions, and discovered the satisfaction of helping students and parents with the often-baffling college admissions process. She also enjoys fiber art, murder mysteries, and amateur entomology.