The impact of the Coronavirus on the operations of colleges and universities has focused attention by students and families on the refund policies of schools. With families investing more than $300 billion annually in college expenses, it’s not surprising that Forbes recently published an article explaining how tuition insurance can provide a refund when a school may not.
Tuition insurance may not have been essential 30 years ago, when college was more widely affordable and school refunds were more generous. Today, however, given both the high cost of tuition and less generous refund policies of schools, it’s an important benefit that colleges and universities can offer to protect their students.
When combined with trends in student health conditions, tuition insurance is also an essential consideration for families worried about their student’s chronic health conditions or potential vulnerabilities.
Less Generous College Refund Policies
If a student needs to leave school, it’s more than likely that the institution will only provide a prorated refund through the first few weeks of school. Refunds for room and board and academic fees are even more unlikely to happen.
Forbes personal finance journalist, Cameron Huddleston, recently interviewed John Fees, the CEO and co-founder of GradGuard about the importance of knowing a school’s refund policy.
“Typically, this is only a refund of tuition through the first five weeks of classes,” Fees said.
A 2019 benchmark study conducted by HigherEdStudy for GradGuard found that only 6% of schools reported providing a 100% refund of tuition—down from 23% in 2015. None of the public colleges surveyed provide full refunds and nearly half of the schools don’t provide any refund for student fees and academic fees.
Growth in Student Medical Conditions
A 2019 national benchmark study of colleges and universities revealed student medical withdrawals are also on the rise. In fact, 70% of schools surveyed reported a growth in student medical withdrawals – up from just 42% in 2015.
In addition, the American College Health Association’s annual research report on student medical conditions also confirms the value of tuition insurance. The complete report includes even more dramatic increases in mental health conditions that may disrupt a students semester.
GradGuard’s tuition insurance covers an unexpected withdrawal due to a covered illness, injury, or other covered reason. This chart below demonstrates the impact of health conditions that can also create a financial loss for families.
How Colleges and Universities Benefit
Given the growing media interest by Forbes and other publications, schools are smart to provide their students the opportunity to protect their investment in college. There are multiple benefits to schools who offer GradGuard’s tuition insurance to each of their students including:
- Help assure that students who have to leave school for a medical reason can afford to return to campus when they are healthy enough to do so.
- Demonstrate to students that they can receive a payment for the potential financial loss that may result from withdrawing from an academic term due to covered reasons such as medical conditions.
- Provide a more affordable product with expanded coverage that meets the needs of the school and student.
- Reduce collections issues from students who leave school by providing the school a payment for any outstanding balance of an insured student.
Lastly, schools are smart to offer GradGuard’s tuition insurance because it will enable them to have an answer to students and parents who may ask them for it. The attention from the Forbes article, ‘Tuition Insurance Rescues Lost College Deposits and Payments’ will certainly lead to more questions from students and families looking to protect their investment in college.