This document reports on higher education student financial aid in Virginia describing its current structure, proposing a new philosophy for its organization, and recommending steps for reform. The opening chapter proposes a new philosophy for student aid which assumes shared responsibility for cost between the student and society, consideration of families' ability to contribute to educational costs, primary state responsibility to the less financially secure, loans as a supplemental form of assistance, and aid targeted to meet the needs of different segments of society. Recommendations for implementation of such a philosophy are included. Chapter 2 provides an overview of current financial aid in Virginia noting funding trends, participation rates, federal programs, state programs, and student characteristics. Chapter 3 offers a proposal for a state tuition savings bond program after reviewing state and national plans currently being publicly discussed where parents can either pre-pay their children's future college tuition at current prices or accumulate funds for their higher education expenses. Chapter 4 describes a proposed work study program. Chapter 5 discusses ways to contain higher education costs and prices. Included are 14 tables. (JB)