Back to school season brings with it the usual media discussion about the cost of college, and what is necessary and what is not necessary for families to be best prepared to head back to college.
Many insurance products aren’t essential… until you need them. Then, they can be a lifeline that helps protect your family from potentially devastating losses. The essential question for college families to consider are what is the risk to your investment in a college education.
We suggest that all college students and families ask three questions prior to the start of college:
- What is the financial consequence if your student is unable to complete the semester due to a serious illness, injury or death of a parent?
- Does your school provide 100% refunds for medical withdrawals?
- Can you afford to protect your investment with tuition insurance?
There are few investments made by consumers where the terms and conditions are often so difficult to determine.
A 2016 survey of 510 college parents found that many parents don’t know the answer. More than 2/3 of parents surveyed have no idea how the school they attend would handle a refund if their student was unable to complete the semester due to an unexpected illness or injury.
Determining the Need for Tuition Insurance: Medical withdrawals are an infrequent, but costly event for students and their families. A 2015 survey of college officials estimated that 41% of campuses report having more than 1% of students complete a medical withdrawal a year and 59% indicating less than 1%. Data from the 2015 Association of College Health Administrators (ACHA) national student health reports also highlights the frequency of events that students indicate may disrupt their education:
Protect Your Student & Your Investment: Unless schools provide 100% refunds for medical withdrawals, GradGuard suggests that parents’ purchase at least some tuition refund insurance coverage for their student. Starting at $29.00 for $2,500 of coverage the cost of even a small amount of coverage provides some comfort in case your student is forced to withdraw from school.
Check GradGuard.com for the coverage options available at your school. Note that certain school programs offer different pricing and coverage options and there are limitations to tuition refund insurance coverage. Remember that coverage must be purchased prior to the start of school and may are not available to residents of all states. Most policies also contain a 24 hour hospitalization requirement for illnesses related to mental illness.
Remember to see your policy for complete details. Most plans allow you to cancel coverage if you are not happy with the specific coverage conditions or restrictions. In all cases, be sure to know the terms and conditions that surrounding your investment in your particular college or university.