Federal appropriations during 1981-1985 for student financial aid are reviewed, along with the effect of the Omnibus Budget Reconciliation Act of 1981. The effective cut in need-based federal student aid for funding year (FY) 1981 totalled $600 million ($500 million Pell Grants, $100 million National Direct Student Loans). The Omnibus Budget Reconciliation Act of 1981 phased out Social Security educational benefits, which had provided $2 billion, one fifth of federal student aid in FY 1981. The Act also restricted eligibility for Guaranteed Student Loans and reduced spending ceilings for other student aid programs. For FY 1982 President Reagan requested additional cuts totalling $332 million, but Congress set FY 1982 funding at slightly over the FY 1981 level. Congress also set appropriations for FY 1983 at about the same level as FY 1982. The President sought to eliminate the in-school interest subsidy for Guaranteed Student Loans. For FY 1984, Congress increased appropriations for student aid by about $404 million over FY 1983. Finally, for FY 1985 Congress increased student aid programs by $970 million, or $1.3 billion more than the President requested. Appropriations for specific aid programs are also reviewed. (SW)