Nip student loan debt in the bud by applying to these three types of colleges

  • In-state room, board and tuition at a four-year public school was $20,770 for the 2017-2018 school year, according to the College Board.
  • Don’t count out private schools: During the 2017-2018 school year, incoming freshmen received an average of $18,798 in institutional grants, according to the National Association of College and University Business Officers.
Young students registering for classes at college campus
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If you want to head off a massive student loan balance, steer your high schooler toward the colleges with the best merit and grant aid packages.

With the average student loan balance now at $32,731, high school students have a prime opportunity to avoid graduating in the red — as long as they select the right schools.

Public schools are known for being less expensive than their private school counterparts — particularly if your child is remaining in-state: During the 2017-2018 school year, in-state room, board, tuition and fees for in-state students was $20,770.

Meanwhile, private schools may have a high price tag, but they may also offer great deals in the form of grants, which are known as tuition and fee discounts.

Private, non-profit schools offered incoming freshmen an average tuition discount of nearly 50 percent during the 2017-2018 school year, according to the National Association of College and University Business Officers.

These grants help schools attract and retain students who can't or won't pay the full price for their education.

"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.

Stay local

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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.

Head of the class

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," DePaulo said.

"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 reach school

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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 National Association of College and University Business Officers.

"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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