Financial Aid Gapping

The average cost of attendance at a private, non-profit institution has grown faster than inflation for the last two decades.

In some instances, the financial aid students receive is not enough to take care of the full cost of a college degree.

Financial aid gapping happens when the financial aid award of a college received by a student doesn’t meet 100% of his or her demonstrated financial need.

So, in other words, the financial aid award is less than the difference between what the student’s family is expected to contribute and the full cost of attendance.

Reasons Why Financial Aid Gapping Happens

Not all degree-seeking students encounter a financial aid gap.

Reasons why some colleges engage in financial aid gapping by offering students less financial aid than what they need to cover the full cost of attendance can vary.

College Does Not Have a Budget

Most colleges and universities fail to meet 100% of the demonstrated need of their students, thus causing financial aid gapping, simply because they don’t have the budget as some of the wealthiest institutions in the land.

Although these schools are able to avoid not offering any institutional aid, the award money they offer can prompt students to seek other means to take care of the remaining cost of pursuing an undergraduate degree.


In some instances, financial aid gapping helps colleges attain a prestigious image — the more elite they appear, the higher their ratings get and the more students are attracted to apply to them.

Meeting only a fraction of the demonstrated financial need of a student causes an increase in applications from high-performing students from wealthy families and can thus afford to pay the full cost of attending college.

Better Budget Allocation

According to the American Council on Education (ACE), colleges and universities spent around 42% of their endowment funds on student financial aid and only 17% on academic programs in the fiscal year 2020.

By creating a financial aid gap, institutions of higher education can divert some of their money to other things, such as research and the installation of state-of-the-art facilities to improve the quality of education for all attendees.

How to Close the Financial Aid Gap

Just because you didn’t receive enough financial aid doesn’t necessarily mean you have no other choice but to work on a bachelor’s degree while running the risk of being buried in student loan debt after graduation.

You may take certain steps as soon as a gap in your financial aid shows up.

Financial Aid Appeal

The figure you see in your financial aid award letter is not unchangeable — it’s possible to request the postsecondary institution to change its offer into a more generous one by appealing your financial aid award package.

Different colleges have different procedures and requirements when it comes to appealing financial aid decision.

The first step to take to appeal yours is to get in touch with the school’s financial aid office and ask about the matter.

No matter the prescribed method of the college, the following are important:

  • Determining how much more money you need
  • Providing documents that support your request for more financial aid
  • Writing a financial aid appeal letter

Outside Scholarships and Grants

Financial aid can come not only from the federal government, state government and colleges and universities — scholarships and grants can also come from private businesses, non-profit organizations, community groups and others.

Around 55% of undergraduate scholarships come from private sources.

Many external scholarships and grants have application deadlines well before financial aid award letters from colleges are sent out.

As a matter of fact, a lot of them accept applications from junior and senior high schoolers.

However, it’s important to point out that you should ask your college about its policy on the receipt of outside financial aid as some institutions reduce their financial aid award packages when students have private scholarships and grants.


According to the National Center for Education Statistics (NCES), around 40% of full-time college students had work.

Meanwhile, about 70% of part-time college students did.

Your monthly earnings may not be enough to totally close the financial aid gap, but it can make it less noticeable.

But be warned: having a job can have a negative effect on your financial aid eligibility.

For instance, your income will in fact be factored into the calculation of your financial aid if you are earning more than $9,400 per year.

Parent Loans

Besides undergraduate students themselves, their parents may also take out loans to help pay for the college education of their kids.

Parent loans can come from either the US government or private sources.

Since your parents are the ones who will borrow money, they will be the ones obligated to repay it.

Like educational loans taken out by college students as well as any other loan types, parent loans come with certain risks and are not necessarily the best option for every family wanting to bridge the financial aid gap their youngsters are having.

Colleges That Meet 100% of Demonstrated Need

At certain colleges and universities, the financial aid gap should be the least of the worries of incoming freshmen students, particularly those from low-income backgrounds and could use all the free college money they can get.

Below is a list of some postsecondary institutions that meet 100% of the demonstrated need of their students.

However, do take note that some of them only completely meet the demonstrated need of first-time, first-year students and not necessarily the demonstrated need of all undergraduates.

Institution NameStudents Receiving Financial Aid
Amherst College56%
Barnard College37%
Boston College39%
Bowdoin College47%
Brown University42%
California Institute of Technology51%
Case Western Reserve University47%
Claremont McKenna College41%
Colgate University33%
Columbia University49%
Cornell University49%
Dartmouth College51%
Duke University37%
Emory University44%
Franklin & Marshall College57%
Georgetown University32%
Grinnell College64%
Harvard University55%
Harvey Mudd College45%
Johns Hopkins University53%
Kenyon College46%
Lafayette College31%
Massachusetts Institute of Technology57%
Middlebury College48%
Mount Holyoke College62%
Pitzer College34%
Pomona College51%
Princeton University62%
Rice University45%
Stanford University49%
Swarthmore College51%
Trinity College42%
University of Chicago33%
University of Notre Dame46%
University of Pennsylvania44%
University of Southern California41%
University of Virginia34%
Vanderbilt University47%
Vassar College53%
Washington and Lee University47%
Wellesley College54%
Wesleyan University39%
Yale University44%

Note: The percentages of undergraduate students who receive financial aid are from the College Board.

Disclaimer: The views and opinions expressed in this article are those of the authors and do not necessarily represent those of the College Reality Check.

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