By examining the effects of financial aid upon students' choice of what type of institution of higher education to attend, this study addressed the effectiveness of current student financial aid programs in achieving the goal of equal educational opportunity. The study evaluated a sample of 1,916 students in the first follow-up (1992) of the Beginning Postsecondary Student Survey of 1989-90 entering freshmen, a subsample of the National Postsecondary Student Aid Study. Students' choice of institution to attend was measured by the institutional characteristic of price after controlling for the effects of other student and institutional characteristics. The study's conclusions were: (1) that financial aid enabled students to attend higher-priced institutions, although various types and amounts of aid had different effects upon the price of institution attended; (2) that, unlike the results of prior research, loans were positively related to the price of the institution attended; (3) that financial aid was insufficient to enable students from lower socioeconomic backgrounds and Hispanic students to attend the higher-priced four-year colleges and universities for which they were academically qualified; and (4) that the effects of financial aid upon institutional price varied by race group, since loans were less effective for black students than for students of other race groups.