My husband and I used to go as college students quite frequently, and in graduate school, too. When is your summer break? In many parts of the county, colleges let out quite early in May while it's still relatively inexpensive and uncrowded.
To be perfectly frank, as college students, saving money was always at the forefront of our minds. We used to stay in fairly cheap hotels and motels on W Irlo Bronson Memorial Highway, and typically only went to two of the major parks. Our trips were usually about four days. We would spend one day at downtown disney shopping and hanging out and going to DisneyQuest and/or the movie theater. You could spend another day at the water parks. We never ate at table service restaurants and breakfast was either a powerbar or something like that in the hotel or a trip to denny's or mcdonalds. If you MUST do a TS restaurant, pick ONE by looking at menus ahead of time. I think the first TS restaurant we ate at was Tony's in MK because it was so cheap for lunch.
With five people, have you looked into Fort Wilderness Cabins? I don't know if two of you would be willing to share a bed, but you have four beds in the room total which is more than you're going to get compared to any other accommodation that sleeps five.
How long are you going for? If you're planning a week trip, I would buy a 4 day water park and more ticket for $357.08 through
Undercover Tourist (saves you $19 per ticket). That's one day for each major park (as college students, my husband and I could easily do all of the Magic Kingdom in one full day without kids to slow us down! Not so much anymore!) Then hit DisneyQuest once, both water parks once, and throw in a round of mini golf for fun, too. Skip park hoppers--it's just not necessary and doesn't add anything to the trip.
What part of the country are you coming from? Driving will obviously save you lots of money, but five people would probably need a large SUV or minivan.