Hi SonnyCool, with your kind of sites with high volume of targeted traffic, I think you should sell your own Ad slots to related businesses in the local target areas, especially if you are being smart-priced. Or look to recruit a sales force of students or outsource workers paid on results.
From what I've read, click through rates less than 2% can be an indicator of poor traffic quality - which can lead to smart pricing.
I'd look at doing some split testing on ad positioning, etc to find out if you can improve the CTR. Take a look at the heatmap on the Adsense site that shows ideal ad positioning, too.
Look at using the Adsense ad filter to screen out non-relevant ads.
Look at using Adsense section targeting tags to improve the relevance of your results.
And do this for all your sites that have Adsense on them. One poorly performing site can affect all the rest.
You're probably better off using relevant affiliate ads rather than Adsense, though. No issues with smart pricing, and they generally give you far greater returns over the long term.
With $2-$3 a day, you have nothing to loose and maybe it will work.
Also, try replacing the the link unit with a 728x90 ad. The leather board only shows three ads and they should be better targeted than the link units.
Then there's no smart pricing, maybe just a couple of advertisers that are gone from the play.