Chances are, college is the biggest investment families will ever make next to buying a home. According to College Board, the average cost of a 4-year public university for out-of -state students in $42,970, and $26,590 for in-state students. So it’s no surprise to see the growing interest in tuition insurance amid the pandemic, as college families are looking for ways to protect their investment.
Money Magazine contributor Joanna Nesbit interviewed John Fees, co-founder of GradGuard about how tuition insurance works, what’s covered, and what’s not.
How does tuition insurance work?
GradGuard’s Tuition Insurance reimburses tuition, room and board, and academic fees if a student completes a covered medical withdrawal. Plans also cover mental health conditions – which are on the rise among students – including depression and anxiety. Untimely death of a student or tuition payer may also be covered.
It’s important for students to know there are limitations and exclusions that apply, and plans must be purchased prior to the start of classes.
What isn’t covered by tuition insurance?
GradGuard’s Tuition Insurance is not “drop-out insurance.” As stated in the Money article, student’s can’t simply decided they need to go home. They must be assessed by a licensed medical practitioner and obtain a written recommendation to withdraw. Other exclusions include injuries during amateur sports competitions, participating in a riot, or pursuing in extreme sports such as mountain climbing or bungee jumping.
Pre-existing physical or mental health conditions might be covered. Fees advises that the best thing students with pre-existing conditions should do is to obtain a doctor’s note saying they’re well enough to start college.
Can tuition insurance help protect against uncertainties caused by the coronavirus pandemic?
Epidemics and pandemics are typically excluded from most insurance policies. But until further notice, GradGuard’s plans include coverage if a student becomes ill due to COVID-19. It’s important to be aware that if campuses close, and students are sent home again like they were in the spring, tuition and housing fees would not be reimbursed by tuition insurance.
GradGuard’s Tuition Insurance also does not provide refunds due to fear of being on campus, or if the method of instruction has changed — such as moving in person classes to online.
The bottom line:
Many families may not find the need for tuition insurance, especially if their student’s school provides a generous refund policy or they can afford the cost of an unexpected extra semester in the event the student had to leave school. However, most families find it difficult to afford the extra cost and thus are smart to purchase tuition insurance, and make sure their investment is protected.
Looking to buy tuition insurance? First, ask your school if they offer it. Another easy way to find out is to use GradGuard’s College Search Tool.