This study explored the role of financial aid in promoting year-to-year persistence over a five-year period following reauthorization of the Higher Education Act in 1992. The study cohort included 6,711 full-time beginning freshmen in the fall 1993/1994 terms at Arizona State University. Variables examined were (1) effects of receiving any financial aid, (2) amount of financial aid, (3) amount of debt, and (4) type of debt. The study found that receipt of aid had a positive influence on persistence, although only in the second-to-third year when aided students were more than twice as likely to return; amount of aid had a significant effect in the first three years, with the odds of persisting increasing from 4 to 12 percent per $1,000 of additional aid; amount of debt has a positive and significant effect in the first three years, with a student having more than $1,000 of debt being 2 to 8 percent more likely to return; unsubsidized debt was negatively associated with persistence in each transition period, although not at a significant level. The paper concludes that the 1992 financial aid program promotes year-to-year persistence, and that the amount and type of debt assumed by students has not had a significantly negative impact on retention. (Contains 26 references.) (CH)