Every year, the cost of obtaining higher education gets more expensive. While most people purchase insurance for their home, car, and health, it is becoming more common to protect investments made toward a college degree.
According to College Board, the average cost of education increased in private and public schools from the year 2009 to 2010.
The figures above refer to the average cost of tuition, excluding costs such as academic fees, room and board, and other related expenses. Whether your costs are on the high or low end of the spectrum, it is possible to get up to $50,000 of annual coverage.
Tuition insurance provides a full or partial refund of college costs in the event that you or your child is forced to withdraw from school during the academic year. While many schools offer reimbursement, this offer often expires within the first few weeks of school. After the designated date(s), withdrawing from school still requires payment of expenses.
A study conducted by the national membership organization College Parents of America surveyed 100 4-year colleges and universities with large total enrollments and a sample of 100 4-year colleges and universities ranked among the most expensive by total cost of attendance.
The research revealed that 75% of these institutions do not refund more than half of tuition and fees for a medical withdrawal after the fifth week of a term. Among the expensive colleges and universities, nearly half of the schools do not provide any refund for medical withdrawal after five weeks and over 60% of the large colleges and universities sampled in the survey, do not provide any refund after five weeks.
Greater than 70% of the aggregated student enrollment at these 178 institutions (less than 200 due to some schools appearing on both lists) were unable to purchase school-sponsored tuition insurance. This figure exceeds 85% for the large colleges and universities included in the study.
Students and parents without coverage are risking losing significant amounts of their college investments if the student is forced to withdraw for medical reasons. This loss can create additional financial hardship, complicating a student’s return to school, thereby reducing the likelihood of timely graduation.
With tuition insurance, coverage is triggered when a student is forced to withdraw from an accredited educational institution as a result of medical disability, illness or loss of life as a result thereof.
When considering what the appropriate the amount of coverage is, take all of the costs incurred while attending college into account. For your reference, the 2009 trends In College Pricing by the College Board estimates that the cost of attendance for the average in-state public school student is $15,213 and the average private school student is $35,636 (inclusive of tuition, fees, room and board).
College Parent of America has sponsored a retail tuition insurance product that is offered by GradGuard. It offers a flexible maximum benefit of up to $50,000 and is sold with the GradGuard Student Protection Plan and all of the other non-insurance benefits of membership in College Parents of America.