The subject likes to travel but, there is one place that the subject likes even more than a place that can be traveled to. Thus, the answer must be a place that the subject does not need to travel to. In other words, the answer is the place where the subject lives.
Option A is incorrect. One cannot live at a school and thus,school cannot be the answer.
Option B is correct. The subject's home is where he/she lives. Thus indicating that he/she loves to travel but he/she likes their home better.
Option C is incorrect. Just like option A one cannot live at a college and thus, it is incorrect.
Option D is incorrect. Although terrace is an extension of home, no one lives on a terrace and thus, it is not the best fit for the blank.