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Not only that, but the degree to which you have nothing directly affects the amount of aid (loans) they are willing to provide.

I have a twin sister whom was better at saving than I. When it came time to apply for FAFSA loans, she had $2k in the bank and I didn't. She qualified for exactly $2k less in loans than I did.

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Absolutely. In the book "Ahead of the Curve" the author describes his MBA classmates at HBS emptying their bank accounts by buying BMWs so that they qualify for more student aid. I've also seen medical doctors in private practice leave for a public health or VA job when their children are nearing college so that they can qualify for more aid, then return to private practice after the children finish college. When the system is set up to charge a high sticker price and then discount based on an "ability to pay" formula, people will do everything in their power to adjust their finances to appear unable to pay.

The lesson there is that those whom are irresponsible get further ahead (by having the irresponsibility discharged).

This is what always irked me about how the bailouts were handled. They should have been controlled government regulated destructors that would tear off and re-attach resources that were viable to other companies and leave the investors with none of their investment.

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