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As is common in Europe, higher education is free in the Czech Republic as well (for Czech students, that is - foreigners must pay a great deal, and I'll add that the government here is now trying to introduce tuition for all students).
I think the system of free higher education is wonderful, and wish I'd been able to take advantage of something like this (I am an American). One thing to look out for, however, is students "lingering on" in school for as many as ie 8 years before getting a BA, or dropping out needlessly. Of course, this happens everywhere - but it makes the system more inefficient & should be especially discouraged in an environment where the student is not paying his or her own way.
If I were Boss of All Universities Everywhere, I'd consider the advantages of making just the standard 4 (or however many for your field) years free, and those who don't finish in the standard period of time would pay for each additional semester (year, whatever...