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Synopsis The system of higher education in India has witnessed tremendous expansion and transformation during the past five decades. The North-Eastern region is also no exception to this phenomenon. However, the experience in the country so far has revealed that no rational calculation had played a decisive role in the expansion of the system and allocation of resources; even public authorities do not care whether the authorities do not care whether the resources invested has been efficiently use or not Since resources for higher education are at best limited, it is crucial to ensure their efficient use. Educational cost analysis provides a powerful tool in the analysis provides a powerful tool in the hands of decision-makers to evaluate the efficiency of education institutions in terms of resource allocation and productivity. This study, based on the functioning of affiliated colleges in the region, examines the growth of public expenditure on higher education, sources of educational finances, unit institutional costs as well as private costs. It also assesses the impact of the socio-economic status of family on the educational expenditure of students. The study shows, among other things, that: (a) unit cost of education at the institutional level is dominated by unit recurring cost, (b) there exists an inverse relationship between unit institutional cost and enrolment size, (c) private cost is dominated by non-academic costs and is positively related with the socio-economic status of the parents, (d) institutional costs constitute less than one-third of the total costs, (e) education is relatively expensive in government colleges as compared to private intuitions.