This document presents testimony and prepared statements concerning the legality of race specific student financial aid, the change in federal policy initiated by the Department of Education when, in December 1990, it declared such aid illegal, and the process used to change the policy. The questions addressed included how the policy change came about, who was behind it, and how it will affect the way U.S. colleges and universities conduct business. Among those presenting testimony during the first session of the hearing were the following: Lawrence Gladieux, Washington director, the College Board; Richard Rosser, president, National Association of Independent Colleges and Universities; Dr. Ted Shaw, University of Michigan; Hon. Ted Weiss, House of Representatives, who chaired the hearing, and Michael L. Williams, Assistant Secretary for Civil Rights, U.S. Department of Education. The second day's session was entirely given over to questioning by chairman Weiss of two Department of Education witnesses, Michael Williams and Richard Komer, the Deputy Assistant Secretary for Policy. Prepared statements submitted for the record came from Donald M. Stewart, president, the College Board; and Richard Rosser. (GLR)