I'd go for a
Haas TM-1
You'd be getting a very versatile machine--something with a lot more power and speed than a knee mill, or a benchtop machine. It has the advantages a knee mill has, in that it's got a large table, is familiar (mostly) and can be operated via handwheels, just like a manual mill.
We have a Haas VF-1, which is a machine geared more towards production, but it has the same control. The Haas control is very easy to use, and comes with templates to help you write code, and "quick code" that you can program most simple parts just by entering values into data boxes.
Out the door you're looking at somewhere between $28,000 and $36,000 depending on the options you choose. Haas offers a educational discount as well, I believe. Probably 5-10%.
For tooling I'd say you're looking at around $4,000-$5,000. You can spend a lot more, or a lot less, but for tooling that will actually take advantage of the capabilities of your machine, I'd say around $5,000.
There's a lot of variables to consider. I spent a LOT of time researching every manufacturer out there when we were going through this process. Literally months of time sorting through all the information out there. It can be very daunting. Let me know if you have any questions. I'd be happy to help you out.
[edit] as Doug says, be sure to budget for CAM as well. You can't run the machine very well without CAM. We use MasterCAM also. I've tried CAMWorks and GibbsCAM, but I find MasterCAM the easiest. I think it is right about at $1k for an educational license like he mentioned.