Buying tuition insurance to protect your college investment during the COVID-19 pandemic
INDIANAPOLIS (WISH) — Colleges and universities have been making plans to safely bring students back to campus amid the coronavirus pandemic. Recently the coronavirus in Indiana has hit college-aged people hard. There is a safety net for parents concerned about sending their children and thousands of their hard-earned dollars to campus in the middle of a global pandemic.
“And so if a student withdraws for ordinary illness like mono or injury like a concussion or even in the case of getting sick with COVID-19, our tuition insurance will pay their housing, their tuition, their academic fees and the total financial loss they have experienced,” said GradGuard co-founder John Fees.
Most universities and colleges offer some type of tuition reimbursement if a student leaves campus within the first couple weeks of school.
Indiana University and Purdue University offer 100% reimbursement during the first week of school. The reimbursement rate drops to zero after six weeks.
If you or your college-aged student gets sick or injured, you are responsible for the full tuition. There are three tuition insurance companies that offer some type of policy for tuition reimbursement — Liberty Mutual, Dewars and GradGuard — and there are exceptions in these policies.
“It is not drop-out insurance, it is also not meant to pay a claim in the case of disruption of classes, so if the school decides to send everybody home, tuition insurance doesn’t pay for that,” said Fees.
He also said the policy will not pay if a student is afraid to come back to campus due to the virus.
The cost of the policies vary from school to school, but the rule of thumb is about 1% of the price of tuition.
Many of these policies also cover tuition if a student leaves campus for mental health, substance abuse or injuries that are not self-inflicted. Butler, Notre Dame and Purdue have arrangements with tuition insurance companies. Students at other universities can buy a policy, but the price is going to be higher.
Late Thursday afternoon the Indiana Department of Insurance sent I-Team 8 the following statement concerning tuition reimbursement insurance:
“The Indiana Department of Insurance recently released a consumer alert titled The Indiana Department of Insurance Recommends Making Sure Your College-Bound Student Has the Insurance Coverage Needed While Away at School. The alert included the following information about tuition insurance, as well as information about health coverage options, homeowner’s and renter’s insurance, and auto insurance.
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.
– Make sure you understand what is covered under the plan – 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.
– Epidemics and pandemics are typically excluded from tuition insurance. However, some insurers have been flexible with this policy during the coronavirus pandemic and have covered students who needed to withdraw during the Spring 2020 semester due to contracting the virus.