You most definitely don't need to splashout on a dev board if you are happy with just learning the language and simulating the results.
You can get the free Xilinx ISE Webpack which includes a basic version of ModelSim.
As you have mentioned simulation and testbenching is one aspect of FPGA design. Actually getting a design to work on real hardware is usually the more challenging part. However, just using software you can learn the language, get to grips with simulation and even synthesize your design to make sure it will meet timing and fit on a target device.
I would also suggest that $1K for your first dev board is quite high. I would start with something like the low-cost Xilinx Spartan-6 board, which is a tad under $300. You'll get a device with a decent amount of logic, memory and DSP slices for that.