This report discusses the Federal Pell Grant Program, the largest need-related federal postsecondary student grant program administered by the U.S. Department of Education, along with recent changes in the program authorized by the 1992 Amendments to the Higher Education Act. The program is designed to assist student from low-income families who would not otherwise be financially able to attend a postsecondary institution. The report reviews student eligibility, grant size, award rules, and need analysis, along with the characteristics of grant recipients. It also outlines the functions of postsecondary institutions participating in the program related to the control of fraud and abuse, application errors, and financial controls. Finally, the report discusses funding trends for the Pell Grant Program from 1980 through 1994, as well as suggestions for program improvement. It argues that increased funding levels are needed to restore Pell Grants as the foundation of federal student aid. (MDM)