The validity of the basic assumptions underlying student grant programs is examined; namely, whether student aid increases access to postsecondary education for low income groups, whether student aid promotes student choice, and whether financing higher education through students greatly aids private institutions. The major conclusions of the study are that scholarship and grant aid do promote equal educational opportunity, and that with equalization of public-private tuition levels through the aid grants, students will favor private institutions in large numbers. Three major failings of state scholarship programs are identified: (1) lack of consideration of all education-related expanses; (2) unrealistic expectations regarding student contributions to educational costs; and (3) failure to adjust income levels indicating disadvantagement. It is concluded that the use of scholarship and grant aid as a mode of financing higher education is on the increase, but that there needs to be more data before the true impact of such programs as the Basic Opportunity Grants can be determined. Further research concerning other types of direct student aid, such as loans, and for longitudinal studies, is advocated. (LBH)