You heard correctly!
Starting now, Epic has made Unreal Engine 4 free to use for colleges and universities. The engine can be installed and used on all school owned computers, and personal copies can be provided free of charge to all students enrolled in accredited video game development, computer science, art, architecture, simulation, and visualization programs.
In addition, schools and their students will receive regular updates as if subscribed, but without having to pay the $19 monthly fee. Launch of commercial products is still subject to the 5% royalty. For complete details, please see the FAQ.
Also - we’ve opened a new forum for questions, feedback, and all other educational comments: UE4 for Schools. Drop us a line!
Update 10/7: Students can now obtain access to UE4 directly for free through our collaboration with GitHub’s Student Pack