This hearing transcript presents testimony concerning minority participation and retention in higher education with emphasis on implications for student aid programs. Oral testimony or prepared statements were presented by Senators Paul Simon, Claiborne Pell, and Carol Mosely-Braun. Testimony was also offered by: (1) the president and three officials of the American Council on Education; (2) the associate director and two officials from the Education and Employment Issues section of the U.S. General Accounting Office; (3) the executive director of the National Council of Education Opportunity Associations; and (4) the presidents of Morgan State University, Norfolk State University, Nebraska Indian Community College, Hostos Community College, Chicago State University, and Spelman College. The testimony in general pointed to the low, and in some cases declining, rates of participation by Blacks, Latinos, and other minorities in higher education in the United States. Many witnesses decried the lack of minority graduate students and faculty to serve as role models. Much testimony was also critical of federal student aid initiatives, such as the Pell Grant program, for not providing enough money to needy students. (MDM)