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Essential Questions Regarding Tuition Refunds & Tuition Insurance

June 27, 2019

Back to school season brings with it the usual media discussion about the cost of college, and what is necessary and what might not be needed for families to be best prepared for the fall semester.

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; always ask yourself about the risk you are taking for your investment in higher education. Can you afford to pay for an extra semester of college if something happens?

We suggest that all college students and families ask three questions prior to the start of college:

  1. 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?
  2. Does your school provide 100% refunds for medical withdrawals?
  3. Can you afford to protect your investment with tuition insurance?

When selecting a school, it is imperative that you know that schools tuition refund policy.

Today, many parents don’t know the answer to any of the questions above. Most 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 2019 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.  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. Remember to see your personal policy for complete details after you purchase!

This article was updated in July 2020

Other Transition

Essential Questions Regarding Tuition Refunds & Tuition Insurance

August 14, 2016

Back to school season brings with it the usual media discussion about the cost of college, and what is necessary and what might not be needed for families to be best prepared for the fall semester.

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; always ask yourself about the risk you are taking for your investment in higher education. Can you afford to pay for an extra semester of college if something happens?

We suggest that all college students and families ask three questions prior to the start of college:

  1. 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?
  2. Does your school provide 100% refunds for medical withdrawals?
  3. Can you afford not to protect your investment with tuition insurance?

When selecting a school, it is imperative that you know that schools tuition refund policy.

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 $33.75 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. Remember to see your personal policy for complete details after your purchase!

Other Transition

The Real Issue: Failing to Graduate Is Costly

August 26, 2014

 

David Leonhardt is the editor of Upshot at the New York Times and posted a useful article titled The Reality of Student Debt Is Different From the Clichés. It reminds me of the challenges our society has in dealing with complex topics captured in the headlines but that often inadvertently distort the real source of risk.

Leonhardt’s article conveys student loan debt is not the primary problem facing U.S. Higher Education. Though the Brookings research, on which his article relies is not without controversy, it does assert that despite the headlines on the rapid growth of student debt “the share of income that young adults are devoting to loan repayment has remained fairly steady over the last two decades.”

The article and Brookings are under some attack, but in my view it correctly focuses the discussion beyond student loan debt and onto the….”The vastly bigger problem is the hundreds of thousands of people who emerge from college with a modest amount of debt yet no degree. For them, college is akin to a house that they had to make the down payment on but can’t live in.”

Failing to graduate is costly. Roughly 4 in 10 students fail to graduate with a bachelors within six years. In fact, you can download an Infographic that illustrates non-graduate borrowers are 4x more likely to default on their student loans and 29% of students with student loans dropped out of college in 2009. Though it is clear that academic readiness is a fundamental problem, financial issues are frequently behind the reasons students are unable to complete their degrees; when you read the details closely, even the recently announced ASU and Starbuck’s partnership appears to be focused correctly on improving college completion.

Bottom line is that college is a great investment, but it isn’t risk free.

It is a big part of why Bill Suneson and I founded GradGuard with the mission to promote greater student success by helping students and their families overcome the financial losses that can result from unexpected events that may disrupt their pursuit of a higher education. In fact, other risks also interfere with college completion – such as unexpected life events such as student accidents or illness, the death of a family member and even theft.

In reality we should all be worried about over-borrowing for a college education, (for full disclosure from 2002-2006 I worked in the student loan industry and some ofNGI’s largest clients are lenders) but we should also give greater focus to the greater the more enduring problem of college completion.

For my higher education colleagues, (particularly those attending summer industry conferences such as ACUHO-INASFAA, Noel Levitz or NACUBO events) I ask:

    • What tangible activities are you involved with to promote college completion of students?
    • What is your campus doing to help protect the investment in education?
  • How is your campus helping students overcome the financial losses that may disrupt their education?

Please let me know what you think. I welcome a conversation with anyone who has suggestions for how to address these issues and how GradGuard can help support greater student success and college completion.