The equity of student financial aid as it is distributed among full-time, dependent freshmen students of different parental incomes and at various types of institutions is examined. The first part of this paper clarifies concepts and definitions surrounding student financial aid. Calculation of the ability to pay, the financial standard of measure, net cost to the family, and net cost to the student are discussed in an effort to establish a common base for equity in determining expected amounts of aid or contributions. Estimates of student budgets, the direct cost of attendance to the student, and the financial resource composition of the cost of attendance are presented to identify differences among students of varying parental income. The disparity between expected parental contribution and actual parental contribution is discussed for different income categories and types of institutions (public, private, four- and two-year). The results indicate that, in general, parental contribution as a percentage of the student's budget is constant across all sectors except for students at two-year public institutions. The resource composition of budgets for students attending community colleges show that they pay a larger percentage of their educational costs than students from any other sector. Institutional expenditures per student dollar expenditure are also investigated for each institutional type. (SF)