Catches and Hidden Costs to Consider

As the cost of higher education continues to climb, the promise of a “low-cost” or “tuition-free” online degree can sound like a dream come true for prospective students. These programs offer significant savings and the flexibility to learn at your own pace. However, despite their appeal, they may also have hidden costs and less prestige than traditional institutions.

How Do Low-Cost and Tuition-Free Online Schools Work?

In 2024, the average annual tuition cost was $48,591 for students at private universities, $29,454 for out-of-state students at public universities, and $12,308 for in-state students at public universities.

By contrast, low-cost universities charge less than $10,000 in tuition per year, and tuition-free universities charge none at all. 

While traditional universities often charge tens of thousands of dollars annually, a growing number of online institutions offer dramatically lower-cost alternatives, relying heavily on state or donor funding and affordable online or hybrid teaching models. For example, many tuition-free programs substitute some or all live instruction with prerecorded videos, lightening instructors’ workloads. They may also cut costs by teaching a limited choice of majors and not offering research programs or extracurricular activities like sports.

For instance, University of the People is a tuition-free, accredited nonprofit that charges only administrative fees, totaling about $6,400 for a four-year undergraduate degree. Western Governors University, another fully online institution, offers a flat-rate tuition model averaging around $8,300 per year for undergraduate degrees. Meanwhile, Calbright College, a public, online community college in California, offers free programs to state residents, including waived tuition, fees, and technology costs.

These models illustrate the diversity of pricing strategies among low-cost schools and the importance of reading the fine print, as many “tuition-free” programs still charge for assessments, materials, or support services.

Pros and Cons of Low-Cost Universities

Pros Explained

• Lower tuition cost: Save thousands of dollars on your college education so you can come out of school with zero or little student debt. 
• Self-paced courses: Most programs let you complete coursework at your own pace, offering more flexibility for students who work or have family responsibilities. 
• Available online: By taking online classes, you don’t need to live near the institution or even in the same time zone. 

Cons Explained

• Hidden fees: Although a university may advertise itself as tuition-free, it typically charges additional fees. For example, the tuition-free University of the People charges application, assessment, and transfer credit fees.
• Smaller selection of majors: Many low-cost and tuition-free institutions have a limited selection of majors. For example, low-cost Newlane University only offers five programs, three of which are liberal arts degrees.
• Less prestige: While any low-cost and tuition-free programs you choose should be accredited, employers may not perceive them as having the same value as a degree from a traditional institution. 

The Bottom Line

Low-cost and tuition-free online schools can offer a compelling path to a degree, especially for students seeking affordability and the ability to do their coursework around their work hours.

However, these benefits must be weighed against potential drawbacks like limited program offerings, hidden fees, and questions of recognition and prestige. As with any investment, prospective students should carefully evaluate whether these programs align with their academic goals, career aspirations, and financial circumstances.