While attending college can be a worthy investment, there’s also some risk that life might interfere with your ability to complete your degree. Given the cost of college, this risk can be unsettling.
Enter: tuition insurance. This unique coverage could help mitigate some of that risk and provide valuable peace of mind. But what does it cover? And is it worth the cost?
Here’s what to know.
What Is Tuition Insurance?
Tuition insurance offers financial protection if you can’t complete your degree program for a reason covered by your policy. For instance, if you develop a severe illness requiring hospitalization for several months, your tuition insurance might kick in. Likewise, if you experience a mental health crisis that interferes with your ability to attend college, you could get reimbursed for tuition and fees (assuming your policy covers mental health conditions).
Tuition insurance policies have differing exclusions, so it’s essential to compare policies and note what’s covered and what isn’t. You can compare options through your school and third-party providers to find the best coverage, then choose the right policy for your situation
The Pros and Cons of Tuition Insurance
Pros:
- May provide reimbursement for tuition and fees if you need to leave school for a covered reason.
- It could help you avoid taking on additional debt to repay your college loans.
- It can offer some financial security if you’re unable to complete your education due to a covered issue.
Cons:
- Tuition insurance isn’t free and may be cost-prohibitive, depending on your degree program’s cost.
- It may only cover tuition and specific fees, not all expenses associated with school.
- Pre-existing conditions are likely excluded from tuition insurance policies.
FAQs About Tuition Insurance
How much does tuition insurance cost?
Tuition insurance isn’t free; costs can vary depending on your degree program and insurer. In general, Generally, the cost amounts to around 1% of your tuition. So, if you pay $18,000 in tuition and fees each semester, your tuition insurance may cost around $180.
But again, costs vary, and you might also pay more for coverage if your school doesn’t offer tuition insurance.
What is or isn’t covered with tuition insurance?
Tuition insurance often protects you if you withdraw from school due to medical issues not associated with a pre-existing condition. For example, if you get mononucleosis or you’re severely injured in an accident, you might be eligible for reimbursement under your tuition insurance policy.
But if you decide college isn’t for you or drop out because you’re struggling to keep your grades up, your tuition insurance policy probably won’t do you much good. Your policy is unlikely to cover these actions.
In what cases should I consider tuition insurance?
Before exploring tuition insurance, look into your college’s withdrawal policies. Your school might reimburse you for tuition and fees—or a portion of them—if you withdraw due to a medical issue. But tuition insurance could be worth considering if your school doesn’t offer decent reimbursement for unexpected withdrawals due to medical difficulties.
If you’re a generally healthy person with no history of medical issues, tuition insurance may not make sense at all. It’s a judgment call. Whether it’s a good option depends on your attitude towards risk, overall health, and other factors.
Where can I get tuition insurance coverage?
If you’re thinking about getting tuition insurance, your school’s financial services office is an excellent place to start. Some colleges and universities partner with third-party insurers to provide tuition insurance coverage, often at reduced rates.
But some companies specialize in these policies if your college or university doesn’t offer a tuition insurance option. For instance, GradGuard is a popular choice for tuition insurance.
Final Considerations
Whether tuition insurance makes sense for you depends on your situation, and you’ll need to weigh the pros and cons and review your budget before deciding. If you’re worried about unexpected medical issues, tuition insurance may provide peace of mind. But it might not be worth the cost if you’re in excellent health overall and don’t expect any future issues.
