This paper analyzes data from the 1989-90 and 1995-96 National Postsecondary Student Aid Studies to examine the awarding of institutional need-based versus non-need grants to undergraduate students. The study examines how the use of the different types of scholarships has changed in recent years; characteristics of students who receive the grants; and whether race and gender are related to the awarding of grants. The sample for this study included full-time dependent students from four-year public and private research, doctoral, comprehensive, and liberal arts institutions; proprietary school students and students who received athletic scholarships were excluded. Bivariate analysis of the data demonstrated that white students were awarded a disproportionately large share of non-need grants in both study years, with their share increasing between 1989 and 1995. Multivariate analysis found that gender had little to do with the awarding of institutional grants; that race was more of a determining factor in the awarding of grants, with the effects differing by type of institution and region; that African Americans were more likely to receive non-need grants; and that in 1995 Hispanics and Asian Americans in private colleges were more likely to receive non-need awards than were other students. (Includes nine data tables. Contains 30 references.) (CH)