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This study used economic investment theory and attitudinal survey data to examine the relationship between the decline in low-Income participation in higher education and the substitution of loans for grants in federal student financial aid programs. Loans are seen to substantially dez:rease the net benefits of college attendance to low-income students because of these students ' greater risk of academic failure and the addition of fees and interest charges to existing cost barriers. Survey data found that far fewer persons from family incomes of less than $20,000 felt the lifetime return on a college education was greater than its cost. Additionally, low family income is related to less willingness to assume debt for educational or other expenses and to.reluctance to take financial risks for investment purposes. Examination of behavioral data revealed that college enrollment rates of students from poor family backgrounds increased when net college attendanc