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Apply to these three types of colleges to head off student debt

  • In-state public colleges offer a bargain: Average tuition and fees in a four-year school for the 2017-2018 school year was $9,970, according to the College Board.
  • 3 out of 4 undergraduate students overall received merit aid for their first year of college, according to College Ave Student Loans.
  • Private non-profit schools offered new freshmen an average tuition discount of nearly 50 percent, according to the National Association of College and University Business Officers.
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When it comes to choosing a college and minimizing debt, forget prestige: Grant and merit aid are the way to go.

A recent study by the National Association of College and University Business Officers showed that private non-profit schools are offering incoming freshmen an average tuition discount of 49.9 percent. These tuition and fee discounts — which are grant awards — allow colleges to retain or attract students who can't or won't pay the full sticker price for their education.

For perspective, the average published tuition and fees at a private non-profit college was $37,040 during the 2017-2018 school year.

The association looked at 404 private colleges and universities.

Being a good student also pays.

Three out of four undergraduate students received merit aid during their first year of college, according to a survey of 1,075 students by College Ave Student Loans.

For high school juniors, the path to avoiding massive student loan debt begins now — when there's enough time to compile a list of colleges that are worth considering.

"Make sure that your student has at least two or three categories that they're weighing," said Joe DePaulo, CEO and co-founder of College Ave Student Loans, a provider of private student loans. "Before you fall in love, make sure you have other options."

These are the three types of colleges your child should add to his or her list, according to DePaulo.

In-state choice

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Sometimes the best bargains are right in your backyard.

During the 2017-2018 school year, the average in-state tuition and fees at a four-year public school was $9,970, according to the College Board. Add room and board, and you're boosting the all-in cost to $20,770.

Not only do you have the benefit of in-state tuition costs, but states themselves may also offer grants and scholarships to residents.

For instance, there's the New York State Excelsior Scholarship, which allows resident students to attend the state's two- and four-year colleges free of tuition, provided their families earn no more than $125,000 a year starting in 2019.

Be on the lookout for tuition exchange programs which students can use to secure discounts at out-of-state schools that are within their region. The Southern Regional Education Board is an example, allowing students within 15 participating states to study in a public out-of-state school while paying in-state rates.

Above-average applicant

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The second kind of school your child should consider — whether public or private — is one in which he or she fares above the average in academics and entrance exams.

"Apply to a school where you at least on paper score better than the average," said DePaulo.

"You have a better shot of merit aid there," he said.

Even if the merit aid doesn't cover everything, it's less money you'll have to borrow. Of the students who received merit aid in their first year of school, 55 percent received up to $10,000, according to the College Ave Student Loans study.

The long-shot school

Apollo Yong, a 17-year-old student at Washington-Lee High, pictured at his home on Wednessday, April 13, 2016, in Arlington, VA. Yong is among thousands of students who have places on acceptance wait lists for universities around the country. He as been accepted into U-Va., Georgia Tech and UT Dallas, and he was waitlisted by University of Chicago and Dartmouth.
Jahi Chikwendiu/The Washington Post via Getty Images
Apollo Yong, a 17-year-old student at Washington-Lee High, pictured at his home on Wednessday, April 13, 2016, in Arlington, VA. Yong is among thousands of students who have places on acceptance wait lists for universities around the country. He as been accepted into U-Va., Georgia Tech and UT Dallas, and he was waitlisted by University of Chicago and Dartmouth.

Be sure your child applies to the dream schools where his or her grades are enough to be competitive for some merit aid.

"Apply to the reach-and-dream schools where you're in the pack," said DePaulo.

Don't allow a high price tag to scare off your child from applying in the first place. Incoming freshmen at private non-profit colleges received an average of $18,798 in institutional grants during the 2017-2018 school year, according to the study.

"As students and families evaluate the value of higher education and their college-going options, they should keep in mind that the vast majority of undergraduates attending private colleges receive financial aid from their institutions," said Ken Redd, senior director of research and policy analysis at the business officers association.

"This aid covers well over half the tuition price," he said.

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