It seems like just yesterday that diapers were your biggest child-related expense. Now you’re getting ready to write that first college tuition check — and wow, is it a big one. Did you know that you can protect your college investment with tuition insurance?
Tuition protection coverage from Allianz Global Assistance can provide a full or partial refund of a semester’s college tuition, fees, and room and board, should a student withdraw for a covered reason. It’s a smart buy for financially savvy parents and students. Here’s why.
1. Tuition insurance protects your most important investment.
You started a 529 plan for your daughter before she could walk. You deferred your retirement savings and your dream vacation so you could save for her college payments. Then, in her junior year, she suffers a serious concussion while playing lacrosse and is forced to withdraw for the spring semester. You hadn’t planned on losing $18,000 in tuition and other costs — how will you make up the loss?
Just as in your other investments, a return on your college tuition payments is not guaranteed. But college remains the most important investment you can make in your child’s future. While you can’t buy insurance for your losses in the stock market, you can protect your college investment by buying tuition insurance. The average annual cost of tuition, fees, room and board ranges from $18,943 at a public four-year university to $42,419 at a private university.1 Compared to losing a semester’s worth of tuition, tuition protection coverage is a miniscule expense.
2. Colleges have strict tuition refund policies.
Your daughter’s just a few weeks into the spring semester at UCLA when she suffers a major anxiety attack and decides to withdraw. You expect to get a substantial refund — the semester just began, after all — but the university reimburses just 25 percent of your daughter’s college costs. Now you’re out $13,000.2
Timing is everything. Universities typically don’t offer full tuition refunds unless a student withdraws on or before classes begin. Instead, they offer a tuition refund schedule in which the amount refunded drops sharply with every week that passes. At UCLA, just to give an example, a student may have 90 percent refunded for withdrawing in the first week, then 50 percent within the next two weeks. After five weeks, no refund is given. (The schedule is slightly more lenient for new students receiving federal aid.)3
If your child suffers a medical or psychological condition that forces her to withdraw from school, you stand to lose a significant portion, if not all, of her tuition, room and board, and other fees. Tuition protection coverage protects your student for the entire semester.
3. Tuition insurance protects students with chronic medical conditions.
Your son does a great job of managing his Crohn’s disease when he’s at home, but you’re worried about what will happen when he goes to college. The stress and the unfamiliar environment may exacerbate his symptoms, and you won’t be there to nag him about taking his meds. What if he suffers a serious flare-up and has to withdraw for a semester?
More than 5 percent of college students live with a chronic illness, according to the American College Health Association.4 Preparation is key. Help your student figure out how he’s going to manage his condition on campus — this checklist from WebMD is a good place to start. And remember that unlike some other tuition protection coverage plans, Allianz Global Assistance tuition insurance covers existing medical conditions. That makes tuition insurance an especially smart buy for parents of students with chronic illnesses, such as diabetes or auto-immune disorders.
4. Tuition protection coverage covers psychological conditions.
You just talked to your daughter on the phone, and you’re worried. In her first semester at Bowdoin College, she sounded happy and excited; now, in her second semester, she seems depressed and anxious. She’s been seeking help from the college’s counseling services, but you think she may need to come home. You’re just not sure you can afford to lose a semester of tuition.
It’s extremely difficult for a student to focus on academics while his or her mental health is suffering. More than 21 percent of college students say anxiety has affected their academic performance, and 13.5 percent say the same about depression.5 A 2010 study from the University of Iowa identified emotional/mental health as the top reason for withdrawal from college. Tuition insurance from Allianz Global Assistance includes a student’s psychological condition as a covered reason for leaving school.
5. Tuition insurance gives parents peace of mind.
Dropping your son off at college is one of the hardest things you’ve ever done. He’s a smart and level-headed kid, but even so, you can’t help imagining all the things that could go wrong. He could get hurt playing soccer. He could get mono. He could be hit by a car. Help!
Parents worry, no matter what. But they can worry just a little less when they know their child is protected with tuition insurance. Tuition protection coverage provides the reassurance that if a student is seriously injured, falls ill or suffers from a psychological condition, he or she can come home without losing a big chunk of college tuition. The Change of Mind plan from Allianz Global Assistance even provides up to 50 percent tuition protection coverage if a student withdraws for any unforeseen reason, such as poor grades or a crisis at home.