The principles, practices, responsibilities, and controls in student financial aid are described in this manual. It traces the flow of funds, management activities, and legal issues as they occur in the process. The emphasis is on sound management principles of a general and permanent nature rather than on specific government requirements that may change from year to year. The manual is designed to help senior administrators understand the effects of student financial aid on their institutions; to present the financial aid process; and to encourage and promote self-regulatory mechanisms for the postsecondary education industry. Specific areas covered by the manual include the institutional implications of student financial aid, planning and acquiring financial aid resources, activities and responsibilities of the financial aid office, the disbursement process, fiscal management, billing and collection, auditing and compliance, and special issues in management control. Appendices include request for institutional eligibility for programs forms; the fiscal-operations report and application to participate in Federal student financial aid programs forms; the financial aid application form; elements of a typical student data base; a sample recipient report of expenditures; the National Defense/Direct Student Loans statement of rights and responsibilities; audit objectives for various student loan programs; and an institutional file analysis form. A bibliography and glossary are also included. (SC)