The influence of financial aid on college student persistence was studied using causal modeling. The study population was 227 full-time freshmen, who enrolled in fall 1982 at a liberal arts college at a large commuter institution. All the students received financial aid. The model, which included background and academic variables, accounted for 35% of the variance in persistence. Persistence was measured by credits completed over a 2-year period. Background variables that were included in the analysis were income, high school rank, Preliminary Scholastic Aptitude Test scores, sex, major, and home proximity. College environment variables were the total aid awarded, merit grants awarded, the percentage of package grants, and grade point average. Based on path analysis, significant variables that showed the largest total effects on persistence were grade point average and high school rank. Neither the total aid awarded nor the percentage of package grants showed significant effect on persistence. A reduced model, which was applied to a second data set to validate the model, accounted for 24% of the variance in student persistence. (Author/SW)