You may be unfamiliar with tuition insurance but it has enormous benefits for you or your student. An average public university can cost up to $22,000 in tuition fees per year, while a private university may cost up to $50,000. If a student has to withdraw from school for unexpected reasons, then all of this money can very well be lost.
Tuition insurance can be costly but protects you in case of an unforeseen event, such as an accident, loss, medical reason, or injury. Tuition insurance is a guarantee of refunding the costs paid at the time of starting a school. If a student pauses their education or withdraws before the end of the educational time period – annual or semester, tuition insurance can help.
How Does Tuition Insurance Compare with College Refund Policy?
Many colleges and universities offer partial refunding of tuition, housing, and campus fees. It is important to not that these are only partial refunds. And, they also require several other conditions to be met, such as:
- documents explaining reasons for the inability to complete the term
- medical certificates in case of an accident or injury
- visa documents in case of international students unable to secure a visa or to move to another country for studies etc.
Another requirement of these partial refunds is to provide them only within a limited time period. For example, they might only refund before the session begins or until the first few weeks of regular classes.
Tuition insurance, however, is a guarantee that you will get refunded at a much higher proportion. This can even be up to 100 percent of the amount paid to colleges or universities. These policies also remain active for much longer periods than the educational institutes’ own time limits for refunding.
What is Covered (and Not Covered)?
Like any other insurance policy, it is imperative to read the fine print of the policy. Different insurance companies have different terms and conditions. Even their coverage categories might also vary among different companies. Regardless, most tuition insurances provide coverage for three things:
On the other hand, a student might unenroll from school for reasons that are not covered by tuition insurance. Considering that hundreds and thousands of students drop out of colleges every year, these insurances do not cover cases where a student is expelled from the college or university. Also, if someone leaves school to get married or to build a family, or if a student is involved in criminal activity that includes a jail sentence for instance, these are not covered. A common occurrence for students is that they switch colleges for changing their majors or simply move to another city and have to change universities. These too are uncovered reasons and not covered by the policy. Suffice it to say that tuition insurance is not dropout insurance.
Is Tuition Insurance Worth It?
The answer to this question depends entirely on the situation of a particular student. If there is a prior medical history that adds to the risk, it may be highly beneficial for them to get such insurance. It may be advisable to get this insurance in the case where a parent is either cosigning or paying the tuition fee.
Another important factor to consider is the policy of the college or university in concern. Does the educational institution offers a high enough percentage of total cost in refunds? If so, then the cost of the insurance policy may only even out the risk.
The bottom line is that the evaluation of this type of insurance depends on the needs of a student, the potential risk of an incomplete school term, the policies of the school in concern, and the cost of the policy itself. But as a general rule of thumb, if there is a significant risk, then tuition insurance policy is recommended.