The 2005 Washington State Legislature authorized, through Substitute House Bill 1345, a two-year pilot project allowing eligible students, who enroll for four or five credits in a term, to receive the State Need Grant (SNG). Several important policy considerations emerged during the pilot project. Board staff explored these issues with financial aid directors and sector representatives and gathered data to evaluate potential policy concerns. The issues included student progression toward degree completion, matriculation status, award amounts, availability of other aid resources, three-credit course exclusion, student aid application complexity, and student budget limitations. This report includes a discussion of each policy item and potential solutions. Contents include: Executive Summary; Background and History; Pilot Project Process; Expenditures, Statistics, and Demographics; Policy Issues Identified; Cost Estimates; and Recommendations. Appendices include: (1) Substitute House Bill 1345; (2) Request to Participate; (3) Survey of Institutional Participants; (4) Letter to Student Recipients; and (5)Student Web Survey. This report also contains Board Resolution No. 06-34.