The impact of federal aid on state spending in general, and specifically on state spending for institutional support, private education, and two-year institutions was assessed through a telephone survey of 74 legislators in 47 states. Almost all of the legislators chair their legislature's committees responsible for higher education policy-making. Forty-eight percent claimed the federal student aid programs affected their state's decisions to spend more or less on student financial assistance. Forty-six percent noted that the federal programs caused their states to spend about the same as they would otherwise for student aid. The availability of fewer dollars is forcing states to consider alterations in their thinking about student aid. In some states the strategy is to give higher priority to more needy students, while in others spending priorities have shifted toward the meritorious middle-class student who can no longer qualify for federal aid because of a relative lack of need. Lack of stability from year to year was the major complaint of the legislators when discussing the federal student assistance programs. The interview questions and responses are appended, along with a rating of the professionalism of the legislatures (i.e., extent of personal staff, sessions, and salary scale). (SW)