Struggling with how much we can and should commit to helping with college costs

Our oldest is 17 and making college decisions for next year. Based on the FAFSA, she received no reward other than unsubsidized loans. The problem is that even though we have a household income of $110,000, we live in a high cost of living area and haven't been able to save money for college while also taking care of our own current and future financial stability. We should be able to pay around $20k total along with keeping her on our medical, auto, cell phone so she doesn't have to worry about those expenses. We also calculated that we can take the risk of cosigning on a total of $40k in parent plus loans. Unfortunately, those amounts plus the unsubsidized federal loans are still very limiting. She got into both of our state's flagship schools and two prestigous out of state schools. She wants a real college experience with dorms and athletics, and has zero interest in staying at home and going to community college. Based on what we can afford and scholarships, there are around 13 lower tier four year schools and six junior colleges with residential dorms that would be options. Her feedback has been decidedly negative and is basically that we are harming her future and that all of her friends parents are taking out 100k+ in parent plus loans so their kids can go. We've always been very conservative with money. Are we making the wrong decision when it comes to being willing to co-sign on loans for her?