This paper cites student financial aid as an instance of Federal policy effect on institutional autonomy. It first cites the Higher Education Act of 1972 as a change in Federal policy from institutional funding to portable grants for the student. The second part of the paper discusses the shift of emphasis from higher education to postsecondary education. In the third part, the lag of governmental appropriations is related to the interim financial responsibility of local institutions. Finally, the changing role of the local financial-aid office is examined, and the desirability of an autonomous Community College Foundation is recommended. (Author/DB)