I've been using iWork for a while now and love it. The last version of Office I used was v.X and that was released a long time ago. I have been without MS software for about two years now.
Essentially, I grew tired of the processor cycles and memory hogging nature of Word. I loved Excel though. Initially I also loved Entourage, but when I started to use iCal and Address Book, Entourage lost its cachet. I couldn't justify to myself keeping a separate database for MS files only. I preferred to have my data accessible to OS X apps.
In terms of compatibility, I save my Pages files as .doc files and send them to my supervisor and others on editorial teams for comments. I can attest that the track changes feature in Pages '08 works well cross platform.
I have also been able to open many .xls files, but some features (if they existed in the original Excel spreadsheet) are not supported. It's not a deal breaker for me, but it might be for others.
I don't think you'd have problems as a college student using iWork. But, then again, I can be stubborn like that, and prefer to keep my system the way I want it. At the same time, being aware that I might have to suffer the odd inconvenience now and then. Put it this way ... having iWork on your system will not prevent you from earning your degree.
[EDIT] - I loaded this page this morning and did not refresh it before I wrote my comments, so I did not see your reply
artesc.