Like Albie said, you can't really nail it down to one thing. Seeing guys come through 38s for three years at Columbus, I can tell you that it generally wasn't one thing in general - most guys tended to have a problem with one particular area -
1 - Precision flying - All the close in stuff that requires 'good hands' - fingertip, close trail, etc. This is a general problem with most everyone when they get to the 38 because it's very sensitive to stick and throttle inputs and guys coming from the sluggish T-37 tend to overcontrol. Most dudes get over this by the first or second phase of formation.
2 - Tactical formation - this is where many guys have a problem, but it's something that (unfortunately) is dismissed by instructors. A guy's ability to be able to fly straight and level 6000 foot line abreast is critical, and most UPT students have a lot of trouble doing that. Unfortunately, IPs overlook this and send them on to IFF/FTU where they can fly BFM, but they can't do the basics.
3 - Fluid maneuvering - I don't mean strictly the T-37 version of 'fighting wing', I mean being able to maneuver in a fluid fashion in relation to your flight lead. This includes turning rejoins, fighting wing or fluid formation, and BFM. With the exception of rejoins (which are relatively easy) this is something that guys can have a problem with at UPT and still pass - it's IFF and FTU where this will start to hurt them.
Don't worry about washing out. Formation is a lot of work, but it's also a great time. Don't sweat it and you'll do fine.