Should You Buy College Tuition Insurance?
July 2018, Consumer Reports
Why Tuition Insurance is Necessary
February 2018, Private School Review
Tuition Insurance: Is it Right for Your Family?
May 2017, U.S. News
An Insurance Policy to Cover College Tuition
August 2015, the Washington Post
Media queries should be directed to the NAIC Communications Division at 816-783-8909 or email@example.com
Shanique ("Nikki") Hall
Last Updated 12/06/18
Issue: Tuition Insurance, also known as tuition refund insurance, is insurance that provides coverage if a student faces circumstances where they need to suddenly withdraw from school, most often for medical or mental health reasons, although there are policies available that offer broader coverage.
Tuition insurance can be obtained from an insurance provider, educational institutions, or even as part of a student loan. These policies will refund some or all of the tuition expenses and typically other incidentals, like room and board, if the student withdrawals from school for a covered reason.
Background: Simply put, tuition insurance offers a way for college students to recover the cost of paid tuition, fees, room, board, and other eligible education expenses in the event the student unexpectedly withdraws from school. A recent College Board report noted a moderate college budget for an in-state public college for the 2017-2018 academic year averaged $25,290. A moderate budget at a private college averaged $50,900. Most universities have their own refund policy on a declining schedule, offering some level of reimbursement if a student withdraws within the first few weeks of the semester. However, if a student drops out late in the semester, they may only get a small fraction of their tuition or nothing at all.
Although the concept of tuition insurance seems straightforward, every tuition refund plan has its own rules and limitations for coverage. Overall reimbursement depends on the type of policy purchased and the reason for withdrawal. Tuition insurance policies typically require the circumstances for withdrawal are unforeseen. Most tuition insurance plans cover students who have a life-changing illness or accident and are unable to continue with their education. According to Allianz, a provider of tuition insurance, depending on the type of plan, students can receive some tuition reimbursement for the following reasons: