First off, I wouldn't worry too much about formatting. If it's not straightforward, you won't be alone.
That said, I think I overcame this by adding a <br><br> at the end of my paragraphs. I'm not sure if this year's app is the same as last year's, but last year I plugged my data and essays into a form and submitted it. They spit it back out in html and then I mailed off a hard copy. Nothing was submitted electronically; the online form was just for standardization.
Carriage returns and multiple spaces are ignored in html so the formatting gets lost. <br> is the html code for a line break so adding it into your text will pass it on to the html code that the form spits back out. You can give this a shot, but be sure that your form isn't being submitted electronically because your <br> might show up in an electronic submission.
I hope this helps and isn't too jargonny.
Laurie
