This testimony discusses the role that individual student grants play in reducing the dropout rate of minority college students, and presents the results of research on the effects of grants and loans on college attendance. Conclusions are based on the High School and Beyond longitudinal study, which followed representative 1980 high school graduates and their families through 1986. It is maintained that, on average, the provision of an additional $1,000 grant in a given semester would lower the probability of an African-American or Hispanic student dropping out of school in that semester by 7 and 8 percent, respectively. The same increase in loan aid, however, would not influence their likelihood of dropping out. These results are significant because federal student aid programs since 1980 have allocated more money to student loans than to grants, a reversal of previous policies prevalent during the 1960s and 1970s. Other factors, such as family income, parent educational attainment, student test scores, and good high school grades, were also reliable predictors of college attendance and persistence. (MDM)