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It sounds like you're hoping to live somewhere else besides Madison itself, maybe in one of the nearby communities in Dane County? I'm most familiar with Madison, but there are several nice small communities within about a 20-40 minute drive from the campus area.
My daughter and her significant other just signed a lease for an apartment in Marshall that they're very happy with, for a whole lot less than a similar apartment would cost them in Madison ($675 for a 3-bedroom). Marshall is east of Madison, a very small community, but with a good reputation. I'm not familiar with their schools, but most school districts in this area are at least very good. You'd probably be a good 35-40 minutes from the UW campus out there, but if your car gets decent mileage, that's quite doable.
Cottage Grove is another small bedroom community sort of east-southeast of Madison that you might check out. Not sure how the rents there are, as there are some newer subdivisions that I suspect may be nudging the community out of the middle-class category and into the nouveau-riche classification, but it might be worth checking out. I'd say it would be roughly a 30-minute drive into the center of Madison to get to class from there.
Sun Prairie, just east of Madison, is another nice, smaller community, with relatively good schools. Rentals are likely to be higher than you'd find out in Marshall, but significantly less than in Madison proper. Figure on a 20-25 minute commute to campus from Sun Prairie.
And Monona, which is southeast of Madison, is another really nice community, more of a bedroom community than anything else, and you'd be about 20-25 minutes from campus there as well.
There are similar communities on Madison's west side as well, but since you mention wanting to be either in or near Sheboygan, I'm figuring you'd rather be to the east of the city rather than on the opposite side from where you'd be heading to get to Sheboygan. If that's not a problem for you, check out Fitchburg and Middleton, and possibly Waunakee to the north, although I get the sense that Waunakee is a bit more expensive than some of the other suburbs.
In any case, good luck to you, and I hope you find a spot you love.
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