As with your previous question, the simplest option is to change the query to return the correct values:
private void BindStudentGrid()
{
string connectionString = ConfigurationManager.ConnectionStrings["mytest1ConnectionString"].ConnectionString;
const string query = "SELECT SID, FName, CASE Status WHEN 1 THEN 'Paid' WHEN 2 THEN 'Unpaid' ELSE '#Unknown#' END As Status FROM Student";
using (SqlConnection con = new SqlConnection(connectionString))
{
SqlDataAdapter sda = new SqlDataAdapter(query, con);
DataTable dt = new DataTable();
sda.Fill(dt);
GridView1.DataSource = dt;
GridView1.DataBind();
}
}