In this paper the author explores how colleges whose primary mission is undergraduate education can strategically allocate resources in a way that reduces costs and prioritizes teaching and learning. He starts from a provocative thought-experiment--what would it cost to educate undergraduates at a hypothetical college built from scratch?--and uses the exercise to identify areas that are ripe for cost savings. Rather than focusing only on the conspicuous, big-ticket items that tend to dominate debates about college costs, the author argues that the real levers for increasing efficiency include rethinking student-faculty ratios, eliminating under-enrolled programs, and trimming unnecessary administrative positions. This paper also outlines how policymakers can create incentives for undergraduate colleges to pursue reforms that will make them more cost-effective. (Contains 6 tables and 19 endnotes.)