Here in Wisconsin we have a unique set-up. The University of Wisconsin System is a combination of 13 Universities (including Madison and Milwaukee, which grant doctorates) and 13 colleges. The Universities, with the exception of Madison and Milwaukee (see above) will grant Bachelor's and Master's degrees, while the colleges will grant up to Associate's degrees.
I went to a college for my first two years before transferring to Madison for my Bachelor's degree. This allowed me to stay at home and save up more money, rather than paying for a place to stay as well as school.
The philosophy behind this set-up is that the boundaries of the University should be the boundaries of the sate and everyone who wants a higher education should have the opportunity to get one.