We have 3 children and went through a similiar financial dilemna = we would not take loans to send them to college and we did not want them to take out loans since we did not want them to start their lives with a "college mortgage". We are also 100% convinced that, unless you know in high school that you want to work on Wall St (many firms will only interview Ivy grad's or equivalent), virtually any school will work. Our approach:
1)If the child was admitted to an Ivy or equivalent, we would pay the "Full Monty"; if they chose a "Tier 2 college (= all others) we were not going to pay $50k+ / year.
2)Son #1 wanted to be a chemical engineer and applied & was accepted into Lehigh @ $48k/yr. We visited the campus, loved it, and then saw that their engineering graduates were paid the same, upon graduation, as most other engineering schools. We told him it was a good school but not Ivy, and to "fall in love with a less expensive school". He got into Virginia Tech, went there a year, transferred to the Univ. of Maine where he graduated with a good GPA, no debt, and has a nice engineering job today (and just got accepted into the Duke MBA program).
3)Daughter wanted to be a Biological Engineer and was recruited by many D1's as a runner. Was offered admission to Penn but declined (much to our chagrin!). Wanted to go to the University of Miami ($48k/yr). We visited, she loved the campus, and saw that their SAT scores were lower than half the community colleges nearby; decent school but not worth $48k = find another school. Long story short is that she really liked Pitt (half the price), graduated from there in Industrial Engineering, no debt, loves being a teacher in NYC, now has her Masters from Pace, etc.
4)Son #2 was trying to choose a Mechanical Engineering program between Colorado ($40k out of state) or the University of Buffalo ($20k in state). Naturally we encouraged him to go to Buffalo....no debt, same job opportunities and pay upon graduation, etc.
In summary, I believe that, with a little diligence, you can send your children to many (very good) colleges and not have to pay the $50k / year that many private schools are charging. There are also several studies showing that your childs post-graduate income has little to do with where they went to college but much more to do with their intellectual horsepower. In other words, a child who can get into an Ivy, but decides not to attend (and instead goes to another non-Ivy school), will on-average make the same money had they gone to the Ivy.
Steering your child into less-expensive schools takes a little soul-searching, especially when there is "peer-pressure" to spend the money to go to more prestigious private colleges but, after exhaustive research, we were absolutely convinced that, for our childen and their ambitions, we (they) didn't need to go to the most expensive private schools...although at the time they were a bit disheartened.
Today, ~5 years after their graduations, we as parents are thankful we have not taken out loans to fund their education (= helps us to prepare for retirement) and all 3 of our children are pretty pleased that we encouraged them to consider the less-expensive (but still very good) colleges they ended up going to. Instead of paying back college loans they are spending their hard-earned money on graduate degrees (Duke MBA), climbing Mt. Kilimajaro, attending bull-riding camps, learning Spanish in Medellin Colombia, skiing throughout North America.
In short, we're definitely not the "1%"; you can do this without incurring debt (for you or your children)