This handbook explains the policies and procedures required for institutions of higher education to properly administer federally funded student financial assistance programs. Three major sections cover student eligibility, institutional eligibility and participation, and state grant programs. The student eligibility section includes chapters on school-based requirements; citizenship; financial aid history; correct social security number; selective service; the application; expected family contribution; verification; corrections, updates, and adjustments; and financial need and packaging. The second section, on institutional eligibility, has chapters on institutional and program eligibility, general participation requirements, administrative capability, financial responsibility, cash management, withdrawals (refunds), consumer information, recordkeeping and disclosure, agreements between schools, applying for and maintaining participation in the student financial aid programs, program integrity, and distance education. The final section is a reference to state-administered grant programs. Chapters discuss the Leveraging Educational Assistance Partnership (LEAP) Program, the Robert C. Byrd Honors Scholarship Program, and the Paul Douglas Teacher Scholarship Program. (DB)