It's always better to test your system using a private testnet (first on your localhost as you mention, and then on a public testnet such as Rinkeby or Goerli where ETH is still free and "mined" via a Proof-of-Authority (clique) mechanism. Then you can find and fix mistakes without spending real money.
If I understand your question correctly, or if I can liberally paraphrase: you want to know
1) is it viable to keep your production system on these public testnets indefinitely to save operating costs?
2) if you deploy to the Ethereum mainnet, how can you give your users ETH in order to use it? (e.g. do you have to mine it yourself)
Those are both interesting questions, and here are some thoughts I have.
I've considered staying on Rinkeby indefinitely for dapps that need to be publicly accessible (e.g. the records of a cooperative or a DAO) but don't need to interact with real money / fiat currency, since testnet ETH is not publicly traded and is by convention worthless. The downside is that you don't personally know the validators of Rinkeby or any other clique testnet, and they could always collude to forge blocks in the future and you woulnd't have a way of knowing. You can set up your own private clique testnet with multiple servers (e.g. on AWS or Google Cloud), but then you are back to running your own centralized servers, and your users have no way of knowing if data is forged or smart contracts are being run correctly.
2) If you deploy to the mainnet, your university may wish to "sponsor" transactions so that everyone can participate (run contract methods) for free, using a mechanism calleed "meta-transactions". Here's some good articles that explain more
The transactions are cheap, probably a few cents each time, but it is a hassle and a poor user experience to require users to load them wallets and spend their own money to do simple operations that are expected to be free on conventional web systems.
So congrats, you've hit upon two big questions for any dapp that wants to be useful to non-technical users, without requiring them to know details of Ethereum.