Financial Gap

"Financial Gap" submitted by SchoolGrantsfor Editorial Team and last updated on Thursday 21st July 2011

Table of Contents

Financial Gap (sometimes referred to as unmet need) is the difference between the money you're awarded in a financial aid package and the actual money you'll need to cover your expenses. After determining your financial need, financial aid administrators decide how much aid they are able to offer you. Colleges may often offer aid that is less than your financial need. This is called the financial aid gap (sometimes referred to as unmet need). With tuition rising faster than financial aid dollars, more students are finding gaps in their financial aid packages. The gap appears when the student’s expected family contribution (EFC) plus the school’s financial aid package don’t equal the cost of attendance. This gap appears as unmet need on a student’s financial aid award letter.

Remember that colleges must apply any outside scholarships or grants toward your unmet financial need or reduce other aid—these awards can’t replace your EFC. You can ask your school to reduce loan or student employment aid rather than grant aid, but most colleges have an established procedure for handling outside scholarships or grants.

How To Fill Financial Gap (Unmet Need) To Cover Your Actual Need

Financial Aid Office

Financial aid is intended both to remove financial barriers for families who cannot afford the costs of an education beyond high school and to fill in the gap for families who can afford only part of the cost. Federal aid is designed to bridge the gap between the cost of education at a higher education institution and the expected family contribution (EFC) as determined by the federal government when a student submits the annual Free Application for Federal Student Aid (FAFSA). Students are encouraged to file the FAFSA for private, need-based scholarships and must file FAFSA for student loan consideration.

The Office of Student Financial Aid provides a comprehensive range of services that bridge the gap between the financial resources of students and their families and the cost of education at your College, eliminating the economic barrier to obtaining an education. The role of the Office of Student Financial Aid and Scholarships is to try to fill the gap that exists between the cost of attendance and funds available from your family, savings and other resources.

A recent report from the Institute for College Access and Success found that California Community College students are leaving up to $500 million in federal aid on the table, according to the most recent data available. That's around half a million community college students in the state who were likely eligible for federal or institutional grant aid but did not apply for it. The application entails filling out the Free Application for Federal Student Aid. More Details: Click here

Prepare documentation toward financial aid appeals

Prepare documentation for the financial aid office to review in support of your case, particularly circumstances not revealed on your Free Application for Federal Student Aid (FAFSA.) If your financial situation has changed dramatically since you filed the FAFSA, you should meet with your advisor to discuss your situation.

Different schools have different attitudes toward financial aid appeals. Some schools like to see the aid packages offered by other schools you’re considering, while others might be put off by its inclusion. Be courteous when requesting additional assistance. You’re not trying to drive a bargain on a used car. Approach the aid officer as an ally, not an adversary.

Circumstances, such as death in the family, sudden unemployment of a parent, unusual medical expenses, etc., can lead to more financial aid. You should provide your advisor with documentation of the changes. Keep in mind that adjustments to aid awards are not made based on negotiations but on actual financial changes in your family.


The Federal Work-Study Program provides jobs for students with financial need. This program offers you the opportunity to earn money to help pay education expenses. If you indicated an interest in work-study employment on your FAFSA, then you should have been notified of work-study eligibility via your award letter. However, if you did not indicate an interest in work-study on your FAFSA but are interested now, you should contact your financial aid office. If you are eligible, you could be put on a waiting list for work-study funding. If you are not eligible, try to find another part-time job on or near campus.


To help with your unmet need, look for scholarships. Scholarship opportunities can be found in many places including financial aid offices, major departments, libraries, local civic organizations, your (or your parents') employer, local businesses, your high school guidance office, or the Internet. Besides applying for popular scholarships and national level grants, you can also check local scholarship opportunities available with your local library, community organizations etc. Check with your local library, organizations in your community and your employer for additional scholarship opportunities.

Reduce college costs

Try to find ways to reduce college costs. If the college you want to attend is located near your parents' house, consider living at home. If you will be living in an apartment, be sure to get roommates so you can share expenses. Ride your bike or take the bus so you can save on gas. Don't use credit cards for everyday purchases. Be sure to create a college budget and stick with it. More Details: How To Reduce College Expenses

Stafford Loans

If you’re an independent student, you may be eligible to receive additional unsubsidized Stafford loans to help cover unmet financial need or replace some of your expected family contribution (EFC). If it is difficult for your family to pay the EFC, start pursuing alternatives, such as parent loans, to close the financial aid gap.

PLUS Loans

PLUS Loans allow you to borrow up to the cost of education minus any other financial aid. PLUS loans are meant to fill the gap between your financial aid package and the cost of education, and will typically offer better terms than a private loan. One of the top benefits of PLUS loans is their lack of a maximum loan amount. In essence, you can use a PLUS loan to borrow any unmet financial need after other financial aid packages. Your school must determine your federal Stafford loan eligibility before you apply for a PLUS loan, and it's in your best interest to take out the maximum amounts you qualify for in Stafford loans before applying for a PLUS loan.

Private loans

If you still dont have enough money to cover the gap after maximizing your subsidized loans, you can approach a private lender low-interest supplemental loan. This loan wont have all the advantages of a Stafford loan, but it could get you to your dream school. Since many reliable lenders offer both federal and private student loans, you have the opportunity to obtain all student loan funding (federal and private) from one student loan source.

Non-Loan Options: A number of other options exist to help you pay for college, including the U.S. military's ROTC program where students receive money for college in exchange for military service, and federal work-study where students work in exchange for funds to pay for college. Apply for a Sallie Mae Smart Option Student Loan, a PNC Solution Loan, or a Wells Fargo Collegiate Loan.

Determine What Your Future Shortfall Will Be

In addition to subtracting the future value of your investments from the future cost of college, you’ll also need to subtract your expected financial aid. The result is the total amount that you will be short when college begins. Thus, this student’s unmet need, also referred to as their “shortfall” is the amount that needs to be planned for if a parent wishes to avoid the financial crunch.

Further Read: