More than $25 billion in financial aid in 1988 is awarded annually to students attending postsecondary education. The aid covers about the same percentage of college costs that it did in 1970, but the impact of veterans' education benefits and social security benefits is no longer significant, and loans now make up one-half the total aid, having supplanted grants as the basic form of support for students who can demonstrate need. Participation rates in postsecondary education have not increased appreciably since the mid-1970s. Some ways of increasing participation, particularly of low income and minority students, are to increase funding for grants, decrease loan defaults by increasing risk sharing, and simplify the aid application process. To increase the participation of older students, the tax exemption for all employer-paid postsecondary expenses should be restored and a partnership should be formed between the public and the private sectors to provide adequate financial aid to dislocated workers. Economically disadvantaged students who want to attend college must compete for the same aid with other economically disadvantaged students who want to attend vocational schools. Those funds should be better targeted by setting different award and loan schedules for students in collegiate and vocational programs; limiting the eligibility of students who do not have a high school diploma or equivalent; and removing students without a high school degree from the postsecondary student aid programs and placing them in vocational training programs of the Departments of Education and Labor. Changes should be made in calculating family income to offset "middle class creep" in programs originally intended to help economically disadvantaged students. (10 references) (CML)