Grinding on a College Budget.

[Alfazulu]

Get the Harbor Freight 1x30" belt sander. It's not terrible for $50, AS LONG AS YOU GET GOOD BELTS! With your budget, you can get an angle grinder, the HF sander, plenty of good belts, a respirator, glasses, and some steel. I ground all of these with an angle grinder (rough profiling) and a HF 1x30" (fine profiling and beveling).

 

[Jesenius]

For absolute cheapo start You need filing jig like this plus file of course ("D" profile is best imho), power drill with few drill bits, saw for steel, lot of sand papers and patience because progress will go veeeery slowly. You can replace file with angle grinder but it's very important to buy one with regulation and start grinding with low rpm. I made few knives with angle grinder and I know that it needs practice for good results (as always). Good luck!