Recent increases in tuition levels, accelerated by declining state funding to institutions, have combined with stagnant or falling household incomes to make it more difficult for many college students to finance postsecondary education. In this environment, state grant programs are more important than ever. These funds have the potential to make college possible for many students who could not otherwise afford to enroll. For these dollars to make as much difference as possible in the lives of students and in the future of state economies, state grant programs must be designed to produce the largest possible return on taxpayers' investment. This report examines the variety of state grant programs currently in place and makes policy recommendations based on the best available research. Appended are: (1) State Data; and (2) Inventory of State Grant Programs, 2009-10. (Contains 3 tables and 47 endnotes.)