How to negotiate and pay for college tuition

ABC News' Rebecca Jarvis highlight ways of paying for college with Kelly Peeler, founder and CEO of NextGenVest.com on "Real Biz with Rebecca Jarvis."
32:00 | 03/23/17

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Transcript for How to negotiate and pay for college tuition
And I'm Rebecca Jarvis and here with Kelly he is the calendar and CEO of text and asked which helps with student loans were atop a lot about what you're doing but I want to welcome everyone first. Hi it's Thursday and it we're getting it doesn't are getting there we're getting at the end of that we hear coming. Two lives here inside an ABC news thank you from office which. Kelly and it and he noticed that noise when he came in here. I had there is if I know he's everywhere and city that apple has now you can hear there's been construction outside this window there's a past that bulldozer and and it as we you'll totally I think fourth maybe fifth week of the old there. So if you are hearing the bulldozer. You can let it snow let us know in the comments the other thing that we he would love to hear from new continents. He is. Questions are questions. Because we know how difficult. Navigating the terrain. College. And pain for college. All the loans that most people are taking mean. Over a trillion dollars and how we're killing dollars one an outstanding. Which is pretty damn that's more than any other category that means so huge amount outstanding loans and student at right. Can't end. We know that a lot of the exact letters are going Craig Counsell lot of people are getting accepted to school eight. And they're saying I wanna go here this is my dream school. For exactly so right now is sort of college acceptance season a lot of students will be hearing all their colleges in about a week at an April. And so that'll be really exciting and a lot of highs and lots of excitement from love and Larry close and I'm below average in the and her acceptance diet. Will happen is an acceptance letter. And then you'll get what's called a financial aid award letter and that's basically the breakdown of the costs of scholarships loans and ultimately her tuition only for one year but not the warrior period which is also something. So you get these two pilots and I just estates of people because right now. This time if you are seniors or watching this race while and really let you know watch and can gradually I don't know if I know it though that's also is so stressful and I remember at this moment life. Think paying. I'll have to get into school pax now because if I don't get this school acts violating his rights and gay yes exactly depicting the most important thing that I have now learned columnists in retrospect is. You may school what you want. Well there's always be. Option to transfer if it's a terrible terrible choice very true and that's and I know for it you're senior with an abstinence than the last they mean gas here write it diet. And the guy is with seniors and like this stress that they go through but I. Am an and transferring is something that we help and aid payments and that the option. If you did get into the school of your dreams congratulations. You're gonna get these two outs and getting me acceptance letter. And then you're getting outline of what school at the bell well. What's it looking for an. Yes so he is I'm financial aid award letters so mind you just because they're called award letters doesn't mean everything in the latter is free money. On so what you should be looking at art things like. For now comparing every different college has their own form. And way is about getting loans and grants and things like that so. It's really important actually like lay them all out in front of you and compare them in the same categories I think that the ties. This is actually really confusing process and making people feel more comfortable that they don't need Ph.D. actually read these things. I'm so lesion looking at art things like the breakdown of scholarships. Great hunts which are free money and I think for scholarships you really know. What are the terms of those scholarships so. Gotta maintain a certain GPS that might be decades or you might have to be and certain fellows program if you change and injured that I anymore so it's really important to read the fine print so that you understand okay this is yet to. Then at risk it's not free money for all four years on. Then you can kind of go down a little bit and see things like loans so this is where we see at times apparently instant adding that he is and they will. I'm Steve federal loans in aid but yet. On their lender and I'll think a second that this aid. And it even though that the word months. Basically there's a lot of confusion around understanding and you do have to pay you absence of these things back at alone is is that they have to pay it back plus interest. So even if it's back and eyes and so sometimes a lot of letters have. Less and subtracted. From the total. So your. The total to date list for you actually that out of pocket costs. And that difference is something you really understand. Where we're getting questions Taylor is in the background and salaried. Okay. This. She says. One of her friends it is. Okay she's on my friend isn't so much debt because. Her daughter's college and she still has one more child is on to college but she needs to minimize marked with her second child. OK so the question is how to minimize debt with the second child if you Ari take a huge amount of it to send your first kid to school yes so. First and foremost. If you're if Nadine if you're son or daughter is. I'm thinking about applying for that process of high schools are just going to school. First is really think about like you're eating a an actual college list. That would fit within your financial around so what happened lunch time is that students will randomly visit an out of state. Small private liberal arts college and get their hearts out on it and able to get their dream school when really it's you know financially totally out of their row and they end up having a lot of debt so. It is step number one is. Pick I'd list and go on the campuses that actually fit within your budget. Without backing said. That means that. Be it large college campuses that huge endowment sometimes give great financial aid packages I don't mean she's certainly not achieve its stars of great colleges that could give you financial aid. But it really is I would legitimately September 2. Would be to make sure that you're communicating. To your oldest I'm daughter's school. That you're you're sending another kid to college sometimes they might be able didn't give you more financial A it and I added how to how to go about the negotiation process that bad. But it's important to be in touch of that school because it reflects your broader holistic financial picture. And really in the third day and say it to do is. I'm me street that you fill out the facts that so you at surprising amount of Stanley is. I'm are eligible for free federal aid from the government and yet they don't thought the key for. I'm and you can get around 5000 dollars a year if you happen isn't something like a billion dollars two point seven million dollars point seven million dollars left on the table because people don't fill out the paths yes and it just speaking even more complex because. I'm just the past few weeks that higher S retrieval tool. Which is how you cut it can act your tax forms into the act that. I'm is no it is no longer working because of security purposes so. That doesn't mean you can't you know hook up your tax forms annually but it's just I'm another complication. Where people are seeing him drop off. More questions Taylor. While you're looking for quite arguing at something right away okay great. The that's an in the evening and question rich diet. I personally think that a lot at Stevens need to do you. A lot more understanding of what's out there I'm so that they can take advantage. You know 40000 dollar A year. Experiential learning bachelor's program. But what I would say is it's important to you will be recommend that students and their families do it actually do things during high school like shadowing internships. On the you can understand even for a day so you know ask. On if your parents ask a few of your friends to have your kids how to land for a day in different career field so that they can at least understand. I have actually no interest in going to medical field I'm not going to sign up for her premed I have actually no interest in doing publishing or whenever might be. On and the reason I think that is because when you work with infant and only it is actually help them create an equation. Around the costs of college to say things like okay how much and a paper year how much and then went wrangling in danger and so that I know. My earnings potential when I come out of college and on so to answer your question directly I think that so. And down college is the easiest way to increase your earning potential over the course of your life. Having actual degrees still very relevant how ever you can optimize we actually get out of that by planning ahead and actually ready. And. I would add to that that a number of schools. Have data. On what the majors within their school earned during the first year. And this is something so I went to the University of Chicago and I remember. When I know is I didn't do it before it got there but when I was there I started looking at when I was trying to think about what I wanted to major in. They started looking at all of the majors. And it's very clear from that day where if you study acts you're gonna make a lot more than if you study why another thing that I would say is that when you're thinking about schools and this is something also did when I was looking at different schools seem mention schools with big endowments a lot of the liberal arts colleges. A lot of the private schools which have a bigger price tag so last year. Private college average tuition. 33480. Dollars an ethnic yes exactly air. Money might they. Also have many of them these bigger endowments so the amount of help that you get from those institutions. And in some cases be greater. And what you would get from a state school and one more point that I would make on that front is that if you're out of state. And you're going to a state school last year that was 24930. Dollars a year. Whereas instate it was 9650. Dollars. Still a huge amount of money in either way you cut it at my point in all of this is to say. If your thinking about a state school and you're coming from out of state yeah that's most likely going to be. And this isn't always going to be all cases but that is most likely going to be dean most expensive options because. They don't come with the big endowment right they don't give away the kind of aid packages that the private institutions do for students in the yes. I completely me and Elliott today. That ideally re injured 88 about this in purely numeric terms in terms of what's coming out of pocket yeah I mean. The will be kind of direct students to do and and back to finish on a previous question is. And in some ten located in the year in community college first. Wave cheaper right and then transfer in Q a four year typical home on university. Especially if you don't know what it is that you want and I are you at getting his original credits. And there are certain locations where going to community college or something that is very specific if you know but that's what I want to do you yeah. It makes and I mean my nephew rather kind of like Paxton and they are we really recommend that students take on line freak worse sins. Where can do that you can do that at places like you to me of course there during your actually university Q so. Lots of colleges are catching on an obvious plane that I caught a student can take courses online. In the summer and so we really recommends you know if you don't have an internship during her summer job. Take online courses so that you can do take those credits that you mine any meat that entrance and cheaper. -- you can use you can graduate earlier and that really means is. I'm you're not paying for that additional master or what ever that reminds me actually Starbucks. Pennies yen tuition everywhere and easing program all of all of there employees get access to you it's the University of Arizona online yet. And you can take those courses if you're an employee of Starbucks gathering Atlanta race and we actually have made a lot of students who worked with eyes that actually taken advantage of that program which is great so. I mean Alaska and it haven't we didn't totally cannot afford their question is. We really encourage every student at any point cute negotiate their finance yes yes yes and that's something that a lot of people don't know that you can do it's certainly not a guarantee. But it. You might as well try every single option before taking Portland me need to and the reason might as one point one million students getting back at eight. On what we're mine and liens are overpaying for college eat here. If only for not filling up at axis so there's other things like negotiate your tuition which explore every single option before you sign paperwork and I would definitely date and the how to negotiate and what it takes some questions first from Pete I'll. That's a lot. Question about. Me. Asher separately there college. Rate so it's your passion and debt consolidation is. How much 01 which sounds like kind of a no brainer but. It's actually really comfortable paying immediately insisted all time message. Actually have not logged in line on their loans are actually he. And you can't make way and yet your payments or things like. You don't know first and it. So number one no let out each and every low and right in that you oh total all acts and where they are action lightly and a lot of families and students and and has been recently. Not having different loan servicers and so they owe money Q&A. And meaning from paying. Like Wells Fargo lord it's ever on the net federal loans from the federal government and so. Those are closed or service in different places. Actually huge cases he's on its. Hit by yet maybe charges it's really important to stand up and do you know where. Which sounds a little that basic but these seats on. This and I'll let you actually oh. Hopefully and we're happy help people come up with me. To say I owed that amount of money one in my targeting in terms in high. I'm post graduate calorie and and what is that look like for the light at one. My living and it's eminently apparent it's what are mind and expenses that year and the marriages and Iran and is really thinking about. Do you five or things like prayer for ams at that directory so. Acre teacher if you were non profit chances are you the war things like in its repayment program. Right out of and so it and you clinics. And felonies and whether that whether that works tree and I don't like to get a blanket statement and inject it should it once. Because it really depends on earth openly you're at our lottery. Her street right exactly so when you go through and you figure out how much you have with each lender. You also need to say what is the interest rate and I am paying that lender and is it a fixed interest rate because and we talked about this last week here. With they interest rates rising a lot of those. Bake backed loans for students. Are going to see those interest rates rise because they're not fix so if you're consolidating. A really key thing to figure out is how much are the fees up to consolidating. C apt to factor that into the total amount. And then what is the interest rate that they will give me to consolidate and if that interest rate is next at and lower and then that didn't interest rate overall that you're paying then you're probably. Getting a decent deal now all of that said. Once you think about those repayment terms that if the job that you're taking out of school. Says that there's if you realize there's no way you can afford that big loan Rea payment. And all of a sudden you realize that you're going to be. That interest rate once you defile. Is no longer the interest rates yes same way that with credit card and things and mean that because they know. You cannot yet you can not get rid student payments so right there the one thing then. They're on one thing that will folly utility you die almost. That's kind of extreme but it's true it's to some extent. And I completely agree with everything you just said it's really important to you this I think like. It you can know how much you first and that and it's at number one and Joseph. If you're at the point of what you're talking here frankly it. Wade passed majority of people which is fantastic so that's my legs and no blanket statement colony Kenya is. You have to fully understand. Fixed variable. Mountain private loans federal loan. And we're having public those things but I'm and in a lot of different ways how that but. I'm I'm really happens that they everyone check it out because you have to look at the cost benefit. Before and after last thing. And it. Let's talk about negotiating mr. yes but I like and so we an action that's really can encourage all of our users to. Really first and foremost in the U. It's going to college lately consumer so just like eight you're buying a college education regularly consume record college education to what I mean that is. Just like you could buy a house. Or you know clothes or whatever might be. You should think about negotiating the price of whatever your buying right because going to college is pretty much like your first mortgage news. It's a two and it has dollar payment depending on the range of this we'll hear so. I mean should you should approach it like January consumer first second. A live human of these actually negotiate the coarsening guarantee but when you're getting its financial aid packages from different colleges and then well. You can compare that and there is and you can go back to the university that's your top choice and mean we don't really recommends is cutting dean's assistants and I just go to your top choice. And be hiding in triple a fat. And what you can do is you can send them an appeal letter. And that's like a one page letter me personally help students customize their letters I'm so that they know the actual without doing that. Buy it he sent an appeal letter to your top toys you can get more additional that are GAAP financial aid from patent in this part of scholarships grants. Whatever might be more federal loans oppose having take out private lines I'm at different interest rates. And so we see it that happy ending successful for students. Really because of three different buckets of categories. It and happy to go into so. First and you can write an appeal letter and say things like my financial situation has changed from me so. My parent. Lost the job. I parent as Hughes medical bills. Over the course of the past year and that's relevant because if you set your facet it's just a snapshot of your financial picture at that moment in time. A lot of things can happen from October to now comes her college acceptance times. And continent opposition be kept up to date eating at our money Catholic kind of change in a situation. Number team is. You can get more money if you like your kind of if that that the college frankly really wants you to come there so we if you are competing against different school. And you a lower tier school only give you a lot more aid to go there you can go to that you're hot you're school and say. I got this other offer I really love your school would you consider. You know giving in for more financial in and I would cons here's what I was able to. I'm sixty and that kind of like college ecology association working and and bucket number three is and is to really think about financial aid from a university is at a high. Rates so there's only so much amount of money and they have they give it out to their distance that they expect to enroll. And sometimes in his calculate that says sometimes there's a little bit more of the pie at left over. That you know it and ran April made you so it is always relevant to just checking in to say. Is there chance that I appeal my financial aid package I'd love to come this school here is the reasons why I'm inning and we can help students and customized letters. That's something so my family. We did appeal yet at the university and that we did. And and and the way I did it I had applied to a handful of schools and I brought the packages. That were on it at some of the other school. And said you know University of Chicago is our top choice. Hat but paying for it is there a cult at. So can you help us the way that some of these other institutions are and they did yeah. Yeah adding fees and by the way this is not about the University of Chicago but the Yossi just launched a new program where if you are students. Or a son or daughter of need. Public school teacher in Chicago. They will pay. For you to attack yet and there are a lot of those programs in a number of schools more and more apples arguing that I. I mean just unhappily if you on the you have your if you have parents batter and the military. Yeah I'm better in other sectors like teaching. Chances are written we're outside of what you just mentioned at universities which we recommend students to you and that's amazing at a summit is but each at a doing that. Is you would also likely qualify for a lot of additional scholarships will so it it's really important if you're a student to be thinking out of it is it my dad's a firefighter. That's actually that could be relevant to your particular type of auction. Stop he's OK so that kind of get that the winner are you filing for argument reply just let nature people inherits a Laurie thinks great question what age. Can the parents stop using their area that's so really that kind of is more a question are are you. I'm qualify as a dependent or an independent state and so. We at this question ally. It's really hard to qualify as an independent. If your student applying. To college and really what that muses. You can be independent if here homeless if you have no parents kind of really extreme circumstances. It's it's a really hard thing to detach from your parents. And there really is they know yet appear as having come ray and as far as the banks are coming out earned. That's their collateral essentially so if you have for example apparent left lung. On the need to parent coastlines with yields so it's really hard Q. Erupts in Britain is like every moment Gatorade like and everyone went exit the pay and not to see at financial picture of there parents so it's it's frankly really hard. Q qualify as an independent. I'm you have to go through times and and the people organs really only for those extreme cases that we incidents. I'm need dean asks is there a good web site does all this information. That's easy. Well yeah. First of all next and that's next step back and talk a little bit about what you do you be answered it's a phenomenal resource I wish it means we have social media went as well. Or at least not in the before I got there. But you have phenomenal Reese and thinking it's on. Ceding the Nadine you can go to next and that stock content. And wet when he met that is he can get connected with the real trains I'm person over tax message who can walking through. All of essentially what we've been talking about so anything from negotiating your college your financial aid package finding scholarships. I'm thinking about that equation and and how you plan out the major earnings potential that you may have. I'm pretty good every step of the way a person can be available to you nights and weekends and it might force that and overt act and it's for that's the most important for people. I weaning okay claw mark questions. Oh. That's an amazing actions. That her right so so the question is from Charlotte thank you so much Allah. How do you approach a financially office when it used to be two parent in coming out. So. Just like I was saying right before that serve constitute. A change in financial situation so. I would but that this is like you would be negotiating and aid package with. And so what that looks like is the actual processors at the bolts of it would be is to write a formal letter. Were happy healthy and help you customize actual letter. And that's but. You warm and some formal letter and I say that it's really important. Actually have that documentation. Is a lot of parents or call the financial since. Ends mind you it's you know find it and people sitting around and get lives people don't answer phones some times it's really important to you now on submit a formal letter. And then to explain in that letter. This is the changing situation I submitted a path that with two parent and come now it's one parent you like we will have to. And apps that sell it to nature lot back reason your accent expert and cue the college's that you want. An and to pile up with patents presuming that you and your liner on you mean it changes that have. It's actually follow up. And make sure that they got the letter so the last thing about pat is. We find much stronger results in its processor that's for reference last spring helps in. Dollars. We're intuit it we're at it an additional and ink. And so when it is it's really mountain protect content from the state. Not succumb ran a parent who's calling and office. Every other day right because it's the stately you know it is I would say I want if I'm Larry you and you're my dream. But I know at CNN like this is going to need an actually had an untenable for me I'm an actor so. We really recommend that even the whole fountain is talking about this that unit as the ones you. Write a letter call pile up at eight. And things. It match that Mary once what is he estimates backs. Mary on once daily address for the tech that's from next gen Nestor intimacy and next and that's dot com. And you can log and you go after a quick matching is fine treatment or for UQ get help protect and and that I would just remind people also that scholarships are also a huge part of paying for college now for me. They really helped me also get at where I want it to be. And and there are so many different scholarships out there I read an article the other day actually about someone who got a million dollars scholarships again he was any. It wasn't an eight plus otter rural spray or anything like that so a lot of Yemen last count and that would be for scholarships. 100% find them our money man pours over tax message actually go into scholarship website and find good ones for you because a lot of people it is basically for craps and eat it. But UI another misconception you do not have to be at it let's you and or at four plants and to be able to get a scholarship it can be. Your parents background it can be your raise. It could be your home town I'm there's like thousands and thousands are just that they're so we can help carry those worries that you once. I have one more good question Larry asks is that hopefully this evening Angela Hayden admitted gilt letters also happening outside support from a counselor as well as the student. So there is asking about outside support do you want an outside supporter when you're submitting an appeal letter unless we say sit ELA kind of like make the but the big push so when we help students customize their appeal letters. We have been less like their argument. On select what makes then there is if there's ten people appealing their financial aid. Why would we give you more money here kinda making your keys again since even spending another recommendation letter from a and outside. You know third party it. You you know you might as well. And also I would just add as a red flag because we didn't mention on scholarships and on loans that. And we'll do we'll do another talk about this coming up soon because they pick at such an important topic. Scholarships and loans. Red flag if they're telling you need to pay yes in order to get access to all of the great scholarship there's finally got like Ron the other direction and I couldn't yet and if you are getting messages in the mail or email were email now that you accepted to schools with great offers from banks about paying for your student yeah we're paying for your debt paying for college at. Be very cautious about stuff yeah I mean. A look again it's also really important this is meant he laments that fact that understand if the university you're going to is also a for profit college so. A lot of times you'll get tons and now around colleges and we'll deal but a lot of since you won't fully understand. Is it's a traditional content arisen me for profit college. And so similar Q think offers or private loan offers. It's just importantly quickly read the fine print and also to know that this stuff is hard so it's not all this is really complicated. And he really find that students weren't there -- damage from Paris to say ask questions and up making stakes so it is hard. UK with add and get help because it is deed biggest financial decision of your kid's life. If your I can't think hopefully our Kelly Taylor your phenomenal you know remind everyone again. Who you are and where they can find out more about next gen past church so and the founder next and best dot com C ash MS dot com. You can sign up for help around everything college financing overtaxed mass Inge. I'm so that we get like a burning question 11 o'clock at night along will be there to answer your question to find you scholarships to helping negotiate your tuition. That it than that the best college for EL I'm Oliver text message and you again you can say and that's not come and sign up. Yes sure he acts he GE. The ES dot com DST dot. Yeah I suspect I Kelly always a pleasure it really great animation thank you and thanks for the great questions skies. Again and let us know in the comments section you have more questions I think that's a really important topic. And were happy to come back and answer more of them no Kelly will be answering a lot of them through stabbing death as well. Have a great everyone be well take Eric I.

This transcript has been automatically generated and may not be 100% accurate.

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