Ways in which student financial aid programs affect the distribution of resources within postsecondary education are examined. Attention is directed to: (1) funding trends in the major federal student aid programs since 1970-1971; (2) the distribution of total Pell Grant resources among sectors and programs of different lengths, (3) the distribution of Pell Grant resources to students in different states, and (4) state-funded programs that work with federal programs to provide supplementary need-based student grants. Fourteen states affiliated with the Western Interstate Commission for Higher Education are used to examine issues 3 and 4. Concerns that directly affect colleges and state systems are identified: increased federal support for need-based grants and reduction of directed assistance programs; sharp increases in student reliance on borrowing for college; the expansion of state roles in providing all types of student assistance; shifts in the distribution of total Pell Grant support from students in public institutions to students in proprietary programs, and from four- and two-year degree programs to shorter nondegree programs; and a growing disparity between total Pell Grant disbursements received by students in particular states and those states' proportions of total postsecondary enrollments and population. (SW)