Of course there is a possibility of camping next to the festival but you will have to buy your Pass at the same time as your tickets for the 3-day event. They of course have different glamping options.
Sleeping at the hotel is a good option but you should know that during Coachella weekends the prices go (very) up. Here is our selection : The Rowan Palm Springs or The The Saguaro Palm Springs.
PLAN B: Airbnb is also a great way to enjoy the Californian life and it could be cheaper if you are renting it with some friends.