Each year, the National Association of State Student Grant and Aid Programs (NASSGAP) completes a survey regarding state-funded expenditures for postsecondary student financial aid. This report, the 38th annual survey, represents data from academic year 2006-07. Data highlights of this survey include: (1) In the 2006-2007 academic year, the states awarded about $9.3 billion in total state funded student financial aid, an increase of about 10 percent in nominal terms from the $8.5 billion in aid awarded in 2005-2006 and an increase of about 6 percent in constant dollar terms; (2) The majority of state aid is in the form of grants. In 2006-2007, more than 3.7 million grant awards were made representing about $7.6 billion in need and nonneed-based grant aid, an increase of about 8.5 percent from the $7 billion in grants awarded in 2005-2006. Of the grant funds awarded in 2006-07, 72 percent was need-based and 28 percent was nonneed-based, almost the same percentage as seen in 2005-2006; (3) Funding for undergraduate need-based grant aid increased $336 million nationwide from about $4.9 billion in 2005-2006 to almost $5.3 billion in 2006-2007, an increase of more than 7 percent; (4) Nine states (California, Illinois, Indiana, New Jersey, New York, Ohio, Pennsylvania, Texas, and Washington) collectively awarded more than $3.6 billion in undergraduate need-based grant aid, accounting for about 69 percent of all aid of this type; and (5) States provided more than $1.7 billion in nongrant student aid, including loans, loan assumptions, conditional grants, work-study, and tuition waivers. Loans and tuition waivers accounted for 70 percent of nongrant funds awarded. Forty-eight reporting entities identified state-funded undergraduate programs with awards based solely on need, while 27 identified programs with awards based only on merit. Exclusively need-based aid constituted 49 percent of all aid to undergraduates, exclusively merit-based aid accounted for 20 percent, with the rest, 32 percent, accounted for by other programs and by programs with both need and merit components. The amount of undergraduate aid awarded in 2006-2007 through programs with a merit component increased to about $2.76 billion. This compares to $4.07 billion awarded to undergraduates through programs based only on need. South Carolina, Washington DC, Indiana, Georgia, and New York provided the greatest amount of grant aid on a per capita basis and along with Kentucky and West Virginia were the largest providers of aid per capita for the population between ages 18 and 24. South Carolina, Georgia, Kentucky, New York, and Tennessee provided the most undergraduate grant dollars compared to undergraduate full time equivalent enrollment. South Carolina, Indiana, Georgia, Pennsylvania, and Vermont had the highest proportion of total expenditures for state-funded grants compared to appropriations for higher education operating expenditures. (Contains 14 tables and 6 figures.) [For "37th Annual Survey Report on State-Sponsored Student Financial Aid, 2005-2006 Academic Year," see ED527268.]