This study examines how federal, state, and institutional student aid promote equal educational opportunity by lowering the net cost of education that undergraduates and their parents must pay. It also considers some possible alternative federal policies concerning student aid that the 102nd Congress may wish to consider as it goes about reauthorizing the Higher Education Act of 1965, as amended. The chapters contained in the report respond to the following areas of interest: (1) how student aid is awarded; (2) which students receive aid; (3) the amount of aid undergraduates receive; (4) what the net cost is of postsecondary education to the students and their families; and (5) the policy issues for the awarding of student aid. Appendices include the 1987 National Postsecondary Student Aid Study data base, and basic and supplemental tables on student aid. A glossary is also included. (GLR)