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I've been told that the amount you save is often subtracted from the amount of financial aid they can recieve and it ends up being a wash. Any opinions on this?

That's really an oversimplification of how it all works. RiverCityFool gave some good advice.
A couple of things to add: The amount you save is not subtracted dollar for dollar from potential financial aid. The formula only assumes a certain percentage of your savings and income are available for college expenses.
Any and all money you save or invest reduces potential financial aid, unless it is in a Retirement account. In the long run, you're better off being a good saver and investor so you can afford college, rather than attmpting to manipulate your finances in order to make yourself eligible for limited aid.
The rules for Financial aid can change at any time. Whatever decisions you make today, may not help at all by the time your children are in college, so make sure whatever you do makes financial sense, regardless of financial aid rules.
Good luck.

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