Students receiving financial aid pay different amounts for equivalent education and do so in different ways: Grants, which do not have to be repaid, loans, which are paid back in the future, and work-study, payas-you-go. We examine the effects of need-based aid independent of study ability on student outcomes - grade point average in particular - controlling for student background and attributes they had prior to college. We also analyze grades within colleges. The results suggest that students receiving need-based grants perform significantly better in college than those not receiving financial aid while those paying for college with loans perform significantly worse than students receiving other forms of aid.