In 1979 the Congress and the administration will consider legislation to extend and revise the Higher Education Act and, in the process, will review the structure of the student-aid system. Several alternatives are likely to be considered, but a fourth is proposed here: a major overhaul of the existing package of programs to make them more equitable in their impact and more sound in their administration at about the same cost to federal and state governments combined. This alternative considers the significant accomplishments of the federal student-aid system to date, and suggests specific improvements in four areas: (1) the introduction of an explicit self-help component (through earnings and borrowing) by the student himself; (2) a loan system that makes loans more easily and widely available and at much less risk of heavy default rates; (3) additional assurances of equality of opportunity for all young persons to obtain a college education if they wish; and (4) a greater range of choice for students and potential students. Financial and statistical data are provided as illustrations. (Author/MSE)