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Michigan joins ranks of schools with free tuition

  • The University of Michigan will offer up to four years of free tuition for in-state students with a family income of up to $65,000.
  • New York state's Excelsior Scholarship will start this fall, offering free tuition for state residents earning up to $100,000.

If you're looking for a bargain education, don't count public colleges out of your search.

The University of Michigan is the latest institution to offer a tuition-free education for some students. The school announced Thursday that its "Go Blue Guarantee" program, starting in 2018, will cover tuition for up to four years for in-state students with family income of as much as $65,000 and who meet other eligibility criteria. Students can also apply for financial aid to cover housing and other costs.

"Today, our long-standing commitment to ensuring that qualified students from Michigan can afford a U-M education becomes a guarantee," University of Michigan President Mark Schlissel said in the announcement.

The Michigan program comes on the heels of New York state passing a free-tuition initiative as part of its state budget this spring.

The Excelsior Scholarship will supplement aid for in-state residents whose families earn $125,000 or less, providing tuition-free education at all New York public two- and four-year colleges. It phases in over three years, starting in the fall of 2017 for New Yorkers earning up to $100,000 and increasing to $110,000 in 2018.

Tennessee and Oregon also have programs offering free tuition at two-year community colleges.

Free tuition doesn't mean zero costs, however. New Yorkers eligible for the Excelsior Scholarship, for example, will still be on the hook for room and board and other expenses — and although the number of parents saving for college hit an all-time high last year, the median balance isn't enough to cover even a year of in-state expenses at a public, four-year college.

Among other requirements, students must also agree to live and work in New York for the same number of years after graduation as they received the scholarship.

CUNY City College of Technology in New York.
Source: CUNY City Tech
CUNY City College of Technology in New York.

Still, public schools are worth a closer look as you assess which colleges are affordable for your family. Even if you don't qualify for the new scholarship program, New York's average in-state tuition of $7,710 for the 2016-17 academic year makes it the 12th-cheapest nationwide, based on data from the College Board.

If you're out of state, public colleges are often less of a bargain, David Levy, editor of Edvisors.com, told CNBC earlier this year. The premium for nonresident students is steep, he said, and state residency rules can require a student to live locally for more than a year to qualify for the in-state rate.

According to College Board data, public colleges in these 10 states have the least expensive average in-state tuition:

10. Mississippi
Average in-state tuition and fees: $7,410
Five-year change: 23 percent
Average out-of-state tuition and fees: $20,260

9. North Carolina
Average in-state tuition and fees: $7,200
Five-year change: 19 percent
Average out-of-state tuition and fees: $23,750

8. Alaska
Average in-state tuition and fees: $7,130
Five-year change: 23 percent
Average out-of-state tuition and fees: $21,800

7. Idaho
Average in-state tuition and fees: $7,010
Five-year change: 16 percent
Average out-of-state tuition and fees: $21,250

6. Nevada
Average in-state tuition and fees: $6,910
Five-year change: 7 percent
Average out-of-state tuition and fees: $20,720

5. New Mexico
Average in-state tuition and fees: $6,620
Five-year change: 14 percent
Average out-of-state tuition and fees: $19,050

4. Utah
Average in-state tuition and fees: $6,580
Five-year change: 17 percent
Average out-of-state tuition and fees: $19,840

3. Montana
Average in-state tuition and fees: $6,410
Five-year change: 2 percent
Average out-of-state tuition and fees: $22,100

2. Florida
Average in-state tuition and fees: $6,360
Five-year change: 6 percent
Average out-of-state tuition and fees: $21,570

1. Wyoming
Average in-state tuition and fees: $5,060
Five-year change: 15 percent
Average out-of-state tuition and fees: $16,220