This study uses data from the National Postsecondary Student Aid survey to analyze the use of need-based versus non-need financial aid awarded by colleges and universities in 1989 and 1995. Descriptive and trend analyses were used to examine differences in the use of these types of aid among varying institutional types, and to examine how financial aid awards have changed for students from different income backgrounds. Key findings include: (1) while the number of need-based awards grew faster than non-need grants at all four-year institutions, the amount of the average non-need grant grew faster; (2) the growth in the number of need awards was greatest in public institutions and among high income students; (3) high income students increased their proportion of both total need and non-need grant dollars awarded between 1989 and 1995; and (4) important differences in the use of need and non-need awards were discovered among institutions from different Carnegie classifications. (Contains 16 references.) (Author)