This paper presents the development and validation of a two-level hierarchical cost model for tertiary education, which enables prospective students to compare the total cost of attending a traditional Baccalaureate degree education with that of the same programme taken through distance e-learning. The model was validated by a sample of Greek university students familiar with both traditional and distance learning who evaluated them in a survey, indicating that the cost advantage of distance e-learning was tempered by the perception that traditional learning has an advantage from the standpoint of quality. The paper also offers several strategies that might help address students' concerns about the quality of distance e-learning. (Contains 1 table, 3 figures, and 1 footnote.)