In light of significant restructuring in New Jersey higher education and shrinking public funds, this project comprehensively examined New Jersey's system of financial aid. It was conducted through the compilation and assessment of program data as well as through interviews with several individuals in the New Jersey higher education community. The project looked at the system as it is currently functioning, at state appropriations, and at the population served. Some key findings include: (1) New Jersey concentrates most of its financial assistance in the form of grants with 75 percent appropriated to the Tuition Aid Grant program (TAG); (2) the state's commitment to grant aid has placed it at the top of national rankings for aid awarded to undergraduates; (3) for needy students, TAG awards have significantly reduced the cost of attendance at New Jersey colleges and universities; and (4) TAG grants have softened the impact of recent years' tuition hikes at state colleges and universities. A final section presents policy options including establishing clear and definitive priorities for state student aid programs, consolidating and streamlining the "merit-based" programs, establishing mechanisms for measuring and demonstrating the success of aid programs, improving student aid funding and delivery stability, and continuing to assess the purpose and need for a state supplemental loan program. (JB)