Background: University teachers in various fields have turned to the experiential tool of poverty simulations to help prepare students to work effectively and ethically with people living in poverty. Their efficacy is reportedly mixed. While several studies claim positive results on student knowledge, skills, and attitudes, others highlight risks of creating apathy and otherness. Purpose: This study explores why simulations run the risk of going wrong and what can be done to make them more effective. Methodology/Approach: To explore how student dispositions may have an important mediating effect, author 1 implemented a 6-week poverty simulation in her poverty course on five different cohorts of Liberal Arts and Science undergraduate students in the Netherlands. We study closely their experiences throughout the simulation through classroom observations and discussions, interviews, and questionnaires. Findings/Conclusions: We find that their heightened sense of agency and taken-for-granted economic, cultural, social, and human capital mediate their experience and learning. Implications: To be effective ethical learning tools, especially for students of privilege, poverty simulations should be designed so that students reflect on their privilege. This is best done when simulations are run in such a way that there is time to experience mistakes, and learn from peers/teachers.