If you really want a 'midsize', then you're looking at 20 MPG, tops, for one old enough to be within your price range.
If you really just mean 'can carry 5 people without injuring each other', then you have many more options. Honda Civic, Toyota Corolla, Hyundai Elantra.
I had a 1999 Hyundai Accent that I recently sold for $2500 that could fit 5, albeit not in extreme comfort. (I did once ride in the rear middle seat for a 4 hour drive. It wasn't
too bad, and I'm a 6 foot, 200 pound guy. Of course, it helped that I was unmarried sitting between two relatively slim women.

(Sadly, they were the wives of the much larger men sitting in the front seats.) And it got 35 MPG. As j26 mentioned, though, older VWs get REALLY good mileage. A nice 2002 Jetta TDI wagon would be at the high end of your price range, but can get 50 MPG, and if you're willing to do some modifications, you can even run it off filtered cooking grease.
'Diesel' as it is known today, is refined petroleum, similar to kerosine. 'Bio-diesel' is plant matter refined to similar chemical properties, and can run in unmodified diesel engines. 'Greasel' is the name for a diesel engine that has been modified to run off cooking grease. Yup, it can go straight from the McDonald's french fry pan, through a filter, to your tank. This type of fuel, plant OIL, is what Rudolf Diesel actually intended his engine to run off, not refined petroleum. Basically, the difference is that Bio-diesel has been thinned out and has an agent added so it doesn't solidify, where 'greasel' systems use straight vegetable oil, which needs to be heated to about 158°F/70°C before it is liquid enough to inject and burn. Thusly, greasel cars usually have a second fuel tank for conventional diesel or biodiesel to use until the grease warms up.