The car is packed, stress levels are high and bittersweet feelings fill the air – it must be back-to-college season. As the car pulls out of the driveway, parents become nostalgic as their children embark on the next adventure in their lives.
Enmeshed within the excitement and anxiety of college attendance is an acute awareness of the investment families are making in higher education. College costs continue to rise, outpacing income with no seeming end in sight.
Protecting that investment is not typically on parents’ minds though. Why should it be? Kids go off to school, experience a new life, and four years later, they graduate. But what if a student does not follow that path? What if, due to health issues, a student needs to leave school? Even if a temporary health setback results in missing a single semester of school, the investment is at risk.
Parents may mistakenly believe that colleges refund tuition in the case of unexpected illness, injury or even death. In fact, a 2010 study by College Parents of America indicates that many colleges do not refund tuition or fees after the fifth week of classes.
Although it is unclear exactly how many college students withdraw from courses, Eric Weil of Student Monitor reports that in a 2009 study “nearly one-third of students either themselves experienced or had a close friend who experienced a mid-semester withdrawal from college due to a medical condition or a death in their immediate family.”
New insurance products now protect higher education tuition investments, providing refund of tuition should a student need to leave school due to illness, disability or death. College tuition, academic fees, and room and board costs average more than $15,000 annually at a public college or university and more than $35,000 at a private institution. For most families, that is a staggering investment, one at risk if an injury, illness or death of a parent caused the student to leave school mid-semester. Tuition insurance protects against the loss of that investment.
With rising costs of college and tightening family budgets, there is greater need for tuition refund insurance. Not only has tuition risen dramatically in the past ten years, but the risks facing college students that threaten their ability to complete a semester or an academic year have increased as well. College tuition refund policies have grown stricter, so typically, parents are not able to recover their money if their student is forced to withdraw more than five weeks into the semester for medical reasons including sickness, mental health or disability.
In the past, only a portion of the nation’s college students, attending mostly expensive private colleges, could insure this risk.
Newer tuition refund insurance programs provide up to $50,000 of annual tuition insurance, available to students attending any accredited college. It covers more than just the loss of tuition payment, with coverage for academic fees, room and board, books and travel to/from the academic program. Additional programs embed tuition insurance into student loans.
Tuition insurance also includes benefits like emergency medical evacuation insurance, identity theft protection and resolution services and insurance for their personal computers. Keep in mind that if a student withdraws because of academic failure or if they simply want to “drop out,” parents cannot expect any refund.