Tuition insurance: is it worth it?
Tuition insurance is a type of coverage that reimburses students for a portion of their education costs if they have to drop out due to injury or illness. Tuition insurance can save you thousands of dollars in tuition and related expenses in an emergency, but it’s not always necessary. Many colleges offer their own leave policies that serve a similar purpose, so it’s important to research all of your options before enrolling.
What is Tuition Insurance?
College Tuition Insurance, also known as Tuition Reimbursement Insurance, covers tuition and qualification fees in the event of an emergency resulting in unexpected withdrawal during a university semester.
Although each policy has different regulations, illness, accident or emergency should generally be considered debilitating and render the student unable to continue their studies. In some cases, chronic or pre-existing conditions may be eligible for coverage in addition to unforeseen illnesses and injuries.
What Tuition Insurance Covers
The specifics of tuition insurance coverage vary by provider and your school. However, most providers cover tuition, room and board, and costs after:
- A death in the family.
- A life-changing illness or injury.
- A chronic illness, disability or injury.
- A debilitating mental condition or illness.
In the wake of the COVID-19 pandemic, providers are also beginning to offer pandemic or epidemic coverage. GradGuard, a leading tuition insurance company, includes COVID-19 coverage on all plans purchased beginning February 18, 2022.
How much does tuition insurance cost
On average, tuition insurance costs about 1% of your total tuition, according to the National Association of Insurance Commissioners. However, the amount of coverage is flexible.
Depending on policy, some providers may allow you to cover a portion of your tuition, although most cover costs per academic semester and require you to renew your coverage each semester.
When is tuition insurance worth it?
It is not uncommon for students to drop out of college for a semester or longer due to health issues. For this reason, many schools have safeguards in place that allow students to do this at no additional cost, at least during the first few weeks of school. If your school has clear refund policies for withdrawals, tuition insurance may not ultimately make sense. The biggest risk is withdrawing towards the end of the semester, when schools may be more reluctant to offer even partial refunds.
College tuition insurance may be worth it if your school does not offer reimbursement for medical withdrawal or if it does not cover your anticipated needs. For example, if you have a pre-existing mental health condition and your school does not cover it in its reimbursement policy, you might consider tuition insurance. If you cannot find the information you need or the details are unclear, contact the Financial Aid Office or the Registrar’s Office for more information.
Tuition insurance can save you thousands of dollars in the event of withdrawal, but it’s only worth it after you do the proper research on your school’s policy and the cost of insurance; otherwise, you’re wasting money on free coverage from your school.