Recently there has been some productive discussion regarding how necessary tuition insurance may be to the 19 million students starting college this year.   Most of the discussion including today’s article in the Wall Street Journal incorrectly focus on the Dewars plan which is only offered to the 170 or so elite colleges.    If you are like most college students, up until this year, you have never had the opportunity to even buy tuition insurance.    Many families are not even aware that it is even possible to protect their families from the potential loss that can occur from an unexpected illness, accident, injury or even death.    Moreover, most families and students are unaware of the real risks and problems that can interrupt a college education.

Before forming an opinion on if tuition insurance is good or bad, recognize that the risks are real.   The ACHA- National College Student Health Trends Fall 2009 Study demonstrate just a few of these risks:

1) within the last 12 months, 1,165,000 or 12.9% of students have been diagnosed or treated for problems with depression and/or anxiety.

2) within the last 12 months, 479,000 or 5.3% of students stated that the death of a friend or a family member had a negative impact on their academic life.

3) within the last 12 months, 144,000 or 1.6% of students were diagnosed or treated for mononucleosis.

Exact numbers on medical withdrawals from college are difficult to obtain. But clearly they do occur and more than 1.5 million students will experience one of just three examples of incidents that could qualify for a medical withdrawal.   A 2009 Student Monitor study found that 27% of students either themselves experienced or had a close friend who experienced a mid-semester withdrawal from college due to student medical condition or a death in their immediate family.

Only it’s not just that college “can be” expensive, it is expensive, very expensive indeed. And the risk of losing money when a medical withdrawal occurs is very real, with rare chance for a successful appeal.  College Parents of America recently conducted a survey of 215 colleges and universities across the country.  Of the 215 schools researched, 181 (84%) have strict refund schedules for medical withdrawal, without a refund appeal mechanism with most not refunding any tuition after the 4th week of class. The other 16% of schools surveyed do have an appeals process for students who are looking for a larger refund.

Now with a threat of losing money invested on college – from tuition, fees, books and even room and board, this real, you might wonder why you would invest in a college education without some insurance to protect the investment.   We protect our homes, our automobiles, our health and even our travel – so tuition insurance is a product that is now not only necessary but also available to all students and their families.

GradGuard exists in part, to make sure that the risks facing college students do not interfere or disrupt the pursuit of a college education.  GradGuard’s tuition insurance helps address one of the major reasons a student might not complete school which is due to financial loss associated with the death of the tuition payer, a catastrophic medical problem, or a mental health problem.

Please visit us again for the rest of the story and GradGuard’s estimates regarding the financial loss families experience each year.