Answer: A categorical grant
Explanation:
Categorical grants is also referred to as conditional grants.
Categorical grants are grants deployed by the Congress of the United States, which may be spent on targeted or specified purposes only.
Moreover, this grant serves as source of federal aid to state and local governments, and can be used for certain categories of state and local expenditures (such as education or basic infrastructure like roads).
Thus, a senator trying to give incentive to students from low-income families on higher education and stating how the incentive will be used by the deployment state, will be proposing a categorical grant.