The primary purpose of financial aid is to enable students to gain access to higher education who would not otherwise be able to attend without the assurance that their basic financial needs will be addressed.

Financial aid has also been used to address social and economic public policy concerns by encouraging students to enter certain professions (e.g., education, nursing, law enforcement), take certain actions (e.g., register for selective service if male) and by discouraging them from engaging in certain acts (e.g., drug use).

Some colleges use financial aid to encourage students to enroll and graduate from their school. Some institutions and organizations use aid as a way to encourage and recognize outstanding academic performance or special talent (e.g., artistic, athletic).

Other organizations including state governments use scholarship-loan programs to encourage students to enter and remain in a certain profession within the state for a period of time.

These varied purposes are sometimes in conflict.