Top 5 facts college students should know about Tuition Insurance

The coronavirus pandemic has created several different challenges to the public, whether it be in the unstable workforce or an overloaded healthcare system. Colleges and universities, as well as college students themselves have been significantly impacted by the outbreak, from living off-campus to work-study opportunities. In the midst of the pandemic, students across the country have been bombarded with concerns about financing tuition or room and board, student loans, and possible reimbursements for tuition costs.

Similar to purchasing a car or buying a home, a college education is a large investment. Unlike a new car or a home, tuition isn’t as simple to fund or insure if a situation arises that forces you to stop attending. When applying for colleges or even throughout the duration of your college education, tuition insurance is not typically the first thing that comes to mind, but it can be worthwhile for you depending on your situation.

Though the coronavirus pandemic is certainly leaving many aspects of college either in shambles or a mystery, you can have some control by having tuition insurance. Are you a college student that has been impacted by the coronavirus pandemic? Considering purchasing tuition insurance but unsure about how it works and whether you will be covered? Here are the top five facts to know about tuition insurance and the coronavirus!

What is Tuition Insurance? 

Also known as “tuition refund insurance”, tuition insurance is a financial safety net for college students that reimburses tuition, room and board, and any academic fees if a student were to withdrawal from school due to either medical or mental health reasons. For instance, say you developed a life-changing illness or experienced a traumatic accident- these circumstances would allow you to qualify for a refund or reimbursement of school expenses.

What does Tuition Insurance cover? 

Just like any other insurance, such as car, life or home insurance, tuition insurance coverage varies depending on the provider you choose and the policy/plan you purchase through them. Typically, students can be covered or qualify for a tuition refund if they have experienced some kind of significant medical event. On a broad scale, tuition insurance excludes epidemics and pandemics. There have been some exceptions, however. Cameron Huddleston of Forbes writes, “While GradGuard’s plans excluded epidemics, the insurer issuing the policies, Allianz Global Assistance, announced it would cover students who had to withdraw in the spring due to contracting the coronavirus.”

What does it cost? 

Perhaps the most important question that concerns everyone, no matter the situation or circumstance is, “what will it cost?” With the cost of tuition as high as its ever been, you may be wondering how much extra money you or your parents will have to pay in order to have tuition insurance. First and foremost, tuition insurance costs vary depending on the costs of your school. However, Cecilia Clark of Nerd Wallet writes that, “Plans are often available for under $200 per semester. Fees are generally lower (about 1% of college costs) if your school provides its own tuition insurance or partners with a third-party provider. Expect higher fees (about 2% of costs) if you purchase insurance directly from a third party.”

Is Tuition Insurance worth it?

Due to the uncertainty of the coronavirus pandemic, you and/or your parents may feel financially restricted because of the necessity to pay tuition while being cautious about losing money at the same time. Taking the pandemic out of the equation, experts are split regarding their opinions on tuition insurance. While some see it as an extra cushion to help protect your money, others think that the cost outweighs any potential benefits. Experts who argue against the need for tuition insurance (in a general sense) argue that most college students are healthy, and most likely won’t have a reason to withdraw for medical reasons. 

How do you get Tuition Insurance?

Firstly, you’ll need to buy before the start of the semester; once classes begin, any kind of reimbursement will not apply. Secondly, read the fine print on the policy you’re looking into.  Danna Rosato of Consumer Reports suggests, “[to collect on the insurance] you’ll need to document all claimed expenses and have a doctor’s recommendation that you withdraw from school.” Lastly, you may be wondering where you can purchase a policy outside of your school. GradGuard and Liberty Mutual both offer coverage at reasonable prices, so check each out to figure which one fits best for you.

Tuition insurance, like any other form of insurance, is worth looking into if you feel that you need it. While the coronavirus pandemic has left millions of students and parents fearful of not only contracting the virus but also taking a financial hit, tuition insurance seems like a safe way out. However, it is important to review the policy you are considering for the following semester and read the fine print to ensure you’re not losing even more money due to a lack of coverage. Though complicated, considering tuition insurance can give you a peace of mind depending on your situation!