The reality is that there are startups out there working on really interesting problems that can't afford the $5k, but would love to get great interns.

Yes, that reduces the pool drastically. You are essentially finding the intersection of students that believe in your challenge over immediate compensation, and do not have financial constraints. But to quote the quoted Chris Dixon: "People who say recruiting is hard are right. People who say it is impossible just aren’t showing up enough."

Reaching out to this group of students is about pitching yourself right. And as the post highlights, understanding the motivations is an important first step.