Table of Contents

Tuition Insurance: What It Is, How It Works

By

澳洲幸运5官方开奖结果体彩网:Julia Kagan

Updated September 05, 2024

Reviewed by

Khadija Khartit

Fact checked by Kirsten Rohrs Schmitt

Couple talks to a businesswoman about getting tuition insurance for their child — kate_sept2004 / GettyImages

Definition

Most students fully intend to complete their classes when they enroll in colleg✅e, but every once in a while, an extenuating circumstance may get in the way. Tuition insurance may protect your financial investment if you or your student needs to leave school quickly in the middle of the term.

What Is Tuition Insurance?

Tuition insurance provides a financial safety net should a college student take an unexpected pause from school𝕴. A tuition insurance policy, 🃏which can cost several hundred dollars per year in premiums, guarantees a refund for tuition, on-campus housing, and fees if a student withdraws early.

Key Takeaways

Tuition Insurance provides reimbursement when a college student is unable to complete an academic term due to an unforeseen, covered accident, injury, or other covered reason.
Covered financial costs may include eligible funds paid from savings, student loans, college savings plans, or other means for tuition, room and board, and other fees.
These policies do come with a price tag of hundreds to thousands of dollar per year in premiums, depending on the comprehensiveness of coverage and the college's sticker price.

How Tuition Insurance Works

In 2023–2024, the average cost of tuition, fees, room and board, books, and other expenses for full-time undergraduate students ranged from $19,860 to $60,420 a year. Each institution's refund policy differs, but many don't offer a 100% refund. This insurance product is may be justified for p🃏arents who go the extra mile to fund their children's education and are concerned that their kids will be unable to complete their degree and graduate.

Before obtaining tuition insurance, families must remember that certain schools will 澳洲幸运5官方开奖结果体彩网:reimburse part or all of a student's tuition if they withdraw by a certain date. Therefore, it's imperative to look at the conditions required for filing a reimbursement claim and weigh your likelihood of meeting those conditions. For example, if a student has a history of poor health, tuition insurance might be worth considering, as said student mig✤ht have to drop out of school due to serious illness.

If a child doesn't have have any health-related issues, and the concern is that they'll drop out due to poor grades or changing their mind, their family might need to explore other 澳洲幸运5官方开奖结果体彩网:college saving options besides tuition insurance.

40%

According to a longitudinal study conducted by the Institute of Education Sciences, 40% of the surveyed students who enrolled in college in 2017 didn't have a degree or certification four years later.

Special Considerations

Some provide refunds only if the termination is due to a major health condition (physical or mental),💜 requiring documentation of costs and a doctor’s recommendation to quit school. Since students tend to be young and healthy, insurance may not be necessar𒀰y.

Policies also differ with respect to the percentage of refund: One company may pay back♚ 100%, while others might charge a lower premium and refund 75%, for example.

Certain colleges have policies addressing when a student quits in the middle of a semester. For instance, Boston University will pay back 20% to 100% of tuition depending on how far into the semester a student withdraws. In this specific example, note that reimbursement for fees is only permitted if you qualify for a 100% tuition refund.

Important

Should your child drop out of college, it won't just affect whether or not they can get their tuition payments refunded. If they also took out a federal student loan to help pay those tuition costs, the 澳洲幸运5官方开奖结果体彩网:grace period will end early and the borrowed funds will have to be repaid (unless the loan is canceled within 120 days of receiving it).

What Types of Expenses are Covered Under Tuition Insurance?

Coverage may vary from provider to provider, but generally, tuition ins♔urance will cover tuition, room and board, and other fees.

What Reasons for Withdrawing Are Covered?

Every policy is different, but many cover serious illnesses, chronic illnesses, or mental health conditions. You may need to obtain a doctor's note to substantiate your claim for coverage.

Will My School Reimburse Me if I Drop a Class?

While it isn't guaranteed, certain schools will reimburse tuition and fees depending on when you drop the class. If you drop it early in the semester, you may be able to recover 100% of your money. Typically, the later you wait to withdraw, the lower the amount you will be eligible to be refunded. Most schools have a cut off date at which point, no monies will be refunded.

The Bottom Line

For students prone to illnesses, tuition insurance may be a wise investment. But read your policy closely before you sign—you may only be covered for certain conditions. Also be sure to check with your educational institute to verify their withdrawal timelines as well. A costly insurance plan may not be needed if you withdraw in a timely manner.

Article Sources

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