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1) I took off work for the past year (long story) and lived off saving, which leaves me no income and no savings.

Will this make a difference when applying for financial aid considering the numbers are so low, even though they are not indicative of more middle-class-ish lifestyle.

2) Why do schools offer financial aid discounts anyway (even better schools like HYS)? Why dont they adopt the position that this is an invest for the student, that they can pay back with the money earned after law school?

1. Having no savings and low income will help you get more aid.

2. I dunno, maybe because they are trying to break down barriers to higher education that low income people face.