Thirty years after the creation of federal student financial aid programs through the Higher Education Act of 1965, the link between moral character and student financial aid programs is once again influencing the public policy debate. A careful look at the debate, though, shows that the nature of concerns has shifted. In the past, the question was, "What good character in students is needed for receiving financial aid?" Today, the question is increasingly becoming, "Is receiving financial aid good for students' character?" According to the author, the answer to that question is yes. Almost without qualification, financial aid has been shown time and again to be accomplishing most policy objectives the programs were designed to achieve. The arguments and concerns about the moral impact of student aid awards made by liberals and conservatives alike are burdened by many myths. What then should one conclude about the relationship of moral character and student aid? Need-based programs of federal student aid have operated over many decades with little evidence of having evolved into a dysfunctional system of perverse rewards. The current preoccupation with the question, "Is receiving financial aid good for students' character?" thus seems largely to be an ill-founded concern. Moreover, questions and arguments of this nature, whether from liberal or conservative viewpoints, detract attention from other moral considerations such as the question, "Is college itself good for students?" (Contains 12 endnotes.)