As nearly 3 million new college students and their families prepare to start college this year, now is an excellent time for parents and students to examine important financial issues that can impact the entire family. The cost of college is frequently among the largest investments a family and student make.
As a result, it is important to prepare for and reduce the potential and unintended costs surrounding college life. A key place to start is to evaluate your assumptions about college life and explore alternatives for how you can protect your investment in a college education.
1. My child’s health insurance is covered by his school
Some schools offer health insurance, others do not. First, you should check to see if your student is covered by your family health insurance plan. Be sure to verify what the college’s coverage requirements are and be sure to check the bursar’s statement bill to see if you have been billed for health insurance.
If you have been billed for student health insurance by your college, but sure to let them know if you have coverage so you can “waive” the coverage.
If you do not waive the coverage, your student will be billed for health insurance.
2. Campus housing will pay for my student’s damaged or stolen property
There are an average of 24,254 annual burglaries reported on college campuses and an average of 2,129 annual fires reported in on-campus student housing. Parents are smart to review their home insurance policies closely for certain limitations. Most policies provide some coverage for students away at college (often up to 10% of the policy limits) but may limit that coverage to full time or on-campus students only. Additionally, filing small claims against a home policy may result in higher premiums or be subjected to high deductibles.
If you can’t afford to replace your student’s stolen or damaged property (like a backpack), then purchasing renters insurance for about fifty cents a day is a smart idea.
GradGuard’s renter’s insurance is the only policy that includes an exclusive student endorsement that provides coverage designed for college life.
3. If my child gets sick or injured, the college will refund tuition and fees
Most colleges do not provide a complete refund to students who are forced to withdraw mid-term that is a result of a medical injury or illness. In fact, only 16% of schools surveyed in 2017 reported that they provide a refund for tuition. All virtually all schools will not provide a refund for academic fees or room and board. hough some schools may provide a partial refund for tuition up through the fifth week of school, nearly all schools do not refund the costs beyond tuition such as books and academic fees. As a result, tuition insurance is a smart alternative to protect your college investment from a potential loss.
If you can’t afford the cost of an extra semester, then tuition insurance is a smart idea. Just remember that tuition insurance must be purchased prior to the first day of classes.
Remember that the best way to manage risks facing your student and the investment you are making in college is to be aware of where your student may be vulnerable. Asking the right questions and considering how to protect yourself from an unexpected financial loss can help your student stay focused on their goal of college graduation.