How Scholarships Fill in the FAFSA Gap

By Scholarship America

Updated May 2024

The Free Application for Student Aid (FAFSA) is a crucial tool for students and their families—and that’s why the technical issues and delays that accompanied the FAFSA rollout in 2024 have thrown so many plans into disarray. The results of the FAFSA have a major impact on how much aid students get—and not knowing those results can have a huge impact on where students enroll and which schools they can afford.

And while federal and state aid that comes via the FAFSA can offset the high cost of tuition for some, the reality is that far too many students, will still face a FAFSA gap—a financial shortfall even after federal aid.

Increasingly, students and their families have turned to loans to help fill the gap between government aid and the full cost of college; during the last academic year, the College Board reported that American college students and their parents borrowed nearly $100 billion in student loans. The massive amount of borrowing and the subsequent student debt crisis continues to concern policymakers, higher education professionals and the individuals who are affected most: students and their loved ones.

Avoiding Student Loans Can Create Issues, Too

Students who want to avoid loan debt can also work while they’re in college. Unfortunately, long hours or multiple jobs mean less and less time to focus on school—leaving students struggling to meet academic standards even if their job helps them pay tuition. It can be a vicious circle, and often results in students dropping out.

As Lumina Foundation and Gallup’s 2024 State of Higher Education survey found: “for more than three-quarters of unenrolled adults, cost and the need to work prevent them from pursuing further education.”

It may seem like there’s nowhere else to turn. But scholarships and grants—funds that don’t need to be repaid—can help fill the FAFSA gap. With costs continuing to rise, it’s increasingly important that there are resources to help cover them, from the time a bill lands in a student’s inbox to when they actually make a payment.

Scholarships Made it Happen for Arleen

Arleen Alcaraz-Cano exemplifies the kind of student for whom scholarships became a saving grace. Arleen is the eldest daughter of Mexican immigrants; when they arrived in Texas, the family lived paycheck to paycheck. Arleen was the only one in her household fluent in English, so she ended up translating documents for her parents and helping her siblings with their English homework.

Then, when COVID hit, Arleen’s grandparents lost their home and moved in with Arleen and her family. But, through it all, her perseverance and her burgeoning talent in computer science kept her on track—though she wasn’t sure how she’d afford higher education until she found the Scholarship America Dream Award.

“Scholarship America’s Dream Award means I no longer have to worry about getting health insurance, as the award is going to be able to cover the school-sponsored plan fees,” Arleen said. “With the award, I also don’t have to take out any loans! Being selected for the [STEM] Dream Award has significantly reduced my financial stress and opened a world of opportunities for personal and academic growth.”

Graduation Has Major Benefits

As a renewable scholarship, the Dream Award will stick with Arleen and her fellow scholars through graduation—and that achievement will have a huge impact on the course of their future lives. The benefits are many:

With a scholarship, a student’s life can change for the better, no matter what their college situation. A part-time student taking one course at a time may need to cover the cost of a specific class. A student who has received substantial aid from her institution may still face steep fees for class supplies that aren’t accounted for in her financial aid package. A returning adult student could make use of an award that’ll help with transportation costs. Each student may have a different need, but the goals are the same: to make a better future for themselves and their families.

At Scholarship America, we’re focused on student success—to build a better present, and to help them shape our future. We know federal and state aid are vital, but we also know that the FAFSA can be a tall barrier, especially for first-generation students. We ensure that Scholarship America applicants can share their financial need status without having a completed FAFSA, and we work to make scholarships accessible to all students in need.

In partnership with our sponsors, we’re working to fill in the FAFSA gap and keep talented students from falling through the cracks.