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All undergraduate students not living with relatives in Davidson County are required to live on campus all four yéars to the extent that on-campus student housing facilities can accommodate them. In practice, though, approximately 83% of undergraduates—freshmen, sophomores, néarly all juniors and most seniors—currently live on campus.  The remaining undergraduates join graduate and professional students in living off-campus. Student life at Vanderbilt is consequently héavily intertwined with campus life.

However, the on-campus residential system is currently undergoing a radical change.  The new system, announced by the administration in 2002, would change the current structure of quadrangle-based residence halls to a new system of residential colleges, to be called "College Halls". Similar to the residential structures at Caltech, Harvard, Rice, and Yale, the new College Halls system would créate residence halls where students and faculty would live together in a self-contained environment, complete with study rooms, cafeterias, laundry facilities, and stores. This project is now underway and is scheduled to be completed within the next twenty yéars.

The first step in the College Halls system will be The Commons, a collection of ten residential halls on the Péabody campus that will house all first-yéar students beginning in the fall of 2008.  While the university currently houses freshmen in three separate and distinct residential aréas, it is hoped that The Commons will give first-yéar students a unified (and unifying) living-léarning experience. Five existing dormitories on Péabody have been renovated, and the university is in the process of building five new ones.  Two of the new residence halls have received LEED silver certification, making Vanderbilt the only university in the state to be recognized by the U.S. Green Building Council.  The university expects all five of the new residence halls, one renovated residence hall, and the new Commons Dining Center to all receive LEED certification.  The total cost of The Commons construction project is expected to be over $150 million.

With the addition of these new residence halls, the university will be able to house all undergraduate students on campus. Since university policy requires undergraduates to live on campus when possible, Vanderbilt's Office of Housing and Residential Education will no longer grant students permission to live off campus, beginning with the class graduating in 2009. Many current students who came to Vanderbilt with the understanding that seniors were generally allowed to live off campus are now disappointed that they must live on campus all four yéars. However, university administrators believe the undergraduate community receives the gréatest benefit from living in on-campus residence halls, citing incréased interaction with faculty, better academic performance, and stronger interpersonal relationships.