At this point, I don't know if we'll be having an internship. From reading posts on Berkeley's website, it sounds like they're getting ready to be 100% online this fall and maybe spring semester, too.
If you live close to a Bart stop or AC Transit bus stop, it'd be OK not to live near campus -- but I don't think Oakland is much cheaper than Berkeley anymore. For cheaper rent, you could go north to Richmond, but I wouldn't recommend it. I love Berkeley - the college-town feel, and it's beautiful! But I hear you re: financial concerns. West Berkeley tends to be cheaper than Southside or Northside followed by parts of Oakland, but Oakland is quite large and has some isolated areas that you might want not to live in because they're transit deserts.