Tuition Insurance and the Coronavirus: What to Know

By Alicia Geigel on October 1, 2020

This article is brought to you by GradGuard. We protect college students and their families from the financial risks of college life, like providing a refund for tuition or replacing a stolen backpack when your school may not. When the unexpected happens, GradGuard’s tuition insurance and renters insurance can help you get back on track.

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.

On average, college tuition is not cheap and has continued to increase over the past few decades. Abigail Hess of CNBC comments on the trend, noting that tuition costs have increased approximately 25.3% at private colleges and 29.8% at public colleges. While a college education still remains a worthwhile investment for young adults and those seeking higher education, funding for colleges and universities has significantly decreased since the 1970s and 1980s. With the cost of tuition averaging at $21,370 for public college and $48,510 for a private college, students are concerned now more than ever about financing their tuition and even going as far as to insure the cost of tuition.

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? This comprehensive guide will give you all that you need to know, from how to get it to what is included in the coverage.

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Tuition Insurance: What You Need to Know

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. As most students are familiar, payments for tuition, room and board, and any other school fees are requested and needed to be paid long before the start of the school year or a new semester. With tuition insurance, students can guarantee that any money that has gone toward their schooling can be reimbursed (depending on the circumstance).

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 large scale, there are several different conditions that fall into the category of a “significant medical event.”

Melanie Lockert of Student Loan Hero references Grad Guard, a provider of tuition insurance, and writes“students can receive some tuition reimbursement (depending on the type of plan) for the following reasons: serious injury or illness, such as mononucleosis, chronic illness, such as diabetes, and mental health conditions, such as anxiety, depression or severe stress.” Ultimately your chances of being covered and reimbursement depends on the policy you have and the reason you provide for a refund.

Pre-Existing Conditions and Tuition Insurance — What Does This Mean for Me? In terms of general insurance coverage, whether it be for health insurance or in this case, tuition insurance, the term “pre-existing condition” is very important and can impact your coverage in a very significant way.

In the insurance world, a pre-existing condition is a “health problem, like asthma, diabetes, or cancer, you had before the date that new health coverage starts.” This means that you had some kind of unavoidable health condition that existed prior to you starting a new insurance policy- it also means that insurance companies cannot refuse to cover treatment for such conditions or charge you more for such a condition. Why is understanding pre-existing conditions important? Well, when considering tuition insurance, having a pre-existing condition can influence your policy type and also what can be covered for you. Within tuition insurance policies, there are specific limitations that dictate whether or not you are edible to receive coverage or a refund.

According to Joanna Nesbit of Money.com, “Policies include statements outlining how students cannot have received treatment or experienced symptoms within 60, 120, or 180 days prior to the policy purchase date or between the purchase date and the first day of classes. But the language on what qualifies as symptoms can be vague, so plan to ask about pre-existing conditions’ exclusion details.” If you have any kind of pre-existing condition, it is important to get in contact with your doctor and get a statement detailing your condition and your ability to start school so you can get as much coverage as possible.

What Does Tuition Insurance 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.” While a few extra hundred dollars may seem too much to pay, tuition insurance might be the right move for you, depending on your personal situation!

Is Tuition Insurance Right for You? Whether you are funding your education through student loans, out of your pocket, scholarships, grants, etc., you are entitled to want to protect the money that’s going toward your education. Determining if tuition insurance is right for you ultimately comes down to a couple different factors. If you’re starting a new semester or even school year and have been diagnosed with a pre-existing condition, whether it be a physical or mental one, tuition insurance may be a right move for you. You may find yourself in a situation where you might have to withdraw from courses because of your pre-existing condition, which in that case, you would be entitled to get tuition reimbursement.

Melanie Lockert of Student Loan Hero notes, “Some tuition insurance plans may have preexisting medical condition exclusions. Some plans may only cover partial tuition or have high deductibles.” Additionally, tuition insurance may be right for you if you are attending an expensive college. Ultimately, it is important to weigh your options and also read the fine print!

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. In normal circumstances, there isn’t the same anxiety centered around wasting money. 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. While tuition insurance can provide you or your parents with a pie of mind (at a cost, may I add), you have to be careful and pay attention to any kind of exclusions that could be detailed in your policy.

How to Get Tuition Insurance: After you’ve considered your own situation, you may still want to get tuition insurance, but hold on! There might be one other option to think about beforehand. In many cases, most schools have a refund policy and won’t limit reimbursement if you withdraw at any time during the academic year. Before leaping into buying tuition insurance, check out your school’s tuition refund policy, what percentage you can be reimbursed, and how far into the semester you can withdraw to be refunded. Usually, most schools will offer a refund through the first five weeks of classes.

If you’re still considering tuition insurance, there are just a few things you’ll need to gather. 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 tuition insurance at reasonable prices, so check each out to figure which one fits best for you.

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Image via Pexels

Tuition Insurance and Coronavirus 

With the uncertainty of when the coronavirus pandemic will end and when the impact on colleges and universities will cease, parents and students are scrambling now more than ever to insure their tuition and get their money back given an unforeseen circumstance. In regards to the pandemic and coverage through tuition insurance, there are some unique policy terms and exclusions. 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.”

During the pandemic, one common thing that has remained is fear. A majority of the public is fearful of contracting the virus, which is why governments, businesses, and people are taking precautions by limiting contact with others, wearing face masks, enforcing curfews, etc. to halt the spread. Fear of getting the virus, unfortunately, is not a valid reason to be reimbursed in the world of tuition insurance. Mark Kantrowitz of SavingforCollege.com notes, “If a student withdraws because they fear they might get the coronavirus or if campuses send students home again, then the insurance won’t cover anything.”

Navigating the college world in the midst of a global pandemic is unlike anything most students have ever faced before. When tuition insurance is thrown into the mix, the lines become more blurred. In regards to the coronavirus pandemic, you most likely will only have coverage and be reimbursed if you either had to be tested for the virus and quarantined or contracted the virus. Any other situation, such as colleges sending students home or switching to online learning is not covered. John Fees, CoFounder of Grad Guard says, “Tuition insurance provides coverage for the financial loss that occurs as a result of a complete withdrawal, but does not provide a refund due to a change in how classes are delivered.”

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Image via Pexels

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 thoroughly 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 insurance is complicated, considering tuition insurance can give you peace of mind depending on your situation!

It’s no secret that college costs a lot of money. Make sure your investment in higher education is protected with GradGuard. Our affordable tuition insurance and renters insurance plans are specifically designed for college students. Customizable plans make it easy to protect your tuition, room and board, laptop, bike, and so much more.

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