This report identities significant characteristics and implications of state programs that provide financial aid to students in private, independent non-profit colleges and universities and describes one program in detail, Virginia's Tuition Assistance Grant (TAG) Program. Following an introduction in Section 1, Section 2 reviews the scope of state aid to students across the nation, the case to be made for public support to private higher education, constitutional issues and how they have been addressed, tensions between politics and policy in policy development around these programs, intended and unintended effects of such programs, and a description of the TAG program and of the results of a survey of TAG Program administrators. The survey found that many eligible students were not receiving grants and that participating students and institutions regarded the program as very important. Section 3 spells out 11 specific conclusions including: (1) such assistance is an appropriate use of public funds; (2) these programs provide variety and strength in the overall higher education system; (3) increased coordination is required in higher education strategic planning; (4) programs like TAG increase tuition competition between private and public institutions; and (5) it is very difficult to gather data and measure the effectiveness of these programs. Appendix A contains the survey questionnaire. (Contains 24 references.) (JB)