America is a great nation in higher education. Its federal financial assistance has been the strongest external driving force in the development of modern American universities, promoting a healthy development. Lessons can be learnt from the experience of U.S. federal government. Influenced by different politics, economies and social development ideas, American federal financial assistance has experienced several stages, including social laissez-faire, strengthened administrative intervention and market decentralization". Based on the data analysis, this paper discusses how U.S. federal government has implemented its financial aid for higher education. It concludes that with sound legal protection in place, the federal financial assistance is now featured by its ecological morphology through the integration of government and market.