The purposes and known effects of student financial aid programs in U.S. higher education are reviewed. The rationale for the creation of federal, state, and institutional financial aid programs is considered, including state grant and scholarship programs, independent college programs, work-study programs, special purpose programs, and private financial support. A review of literature about the impact of student aid on equal educational opportunity, which spans 4 decades, covers the effects of aid programs on: access and choice, retention and persistence, and incentives and disincentives to save for college. Initially, federal programs aimed at rewarding veterans and reducing manpower shortages. More recently, they have aimed at removing financial barriers to higher education for low income students, promoting wider choice of institutions, rewarding talented students, preserving the dual public-private system of U.S. higher education, and increasing international understanding. Research indicates that student aid contributes to greater access and choice, even though it has had little impact on the participation of low-income students. According to the literature, college attendance is a function of many factors, including parents' education and income, academic preparation and ability, and motivation and attitudes. A 40-item reference list is appended. (SW)