How College Tuition and Renters Insurance Help Families Plan for the Unexpected

How College Tuition and Renters Insurance Help Families Plan for the Unexpected

(Interviews are edited for clarity and flow.)

Low-cost tuition expenses and comforting myths about “college as a protective bubble” belong to prior generations. The Coronavirus crisis and the surging Delta variant — not to mention rising mental health crises among young people — have brought new attention to the risks of college life.

With the high total cost of college — $54,880 for full-time undergraduates at private, non-profit colleges — losing anywhere from a semester to a full year of tuition because of an unexpected medical withdrawal is more than most families, or college refund policies, can financially bear.

Fortunately, many of the reasons for these withdrawals are easy to plan for with tuition and renters insurance. With these plans, setbacks such as an injury or illness, mental health crisis, theft, or flood do not have to lead to long-term financial losses.

 

Top Medical Reasons College Students Have to Drop Out

Several common medical conditions, not just COVID-19, create financial losses each year for students and schools.

According to 2019 data from the American College Health Association (ACHA), based on over eight million full-time undergraduate students attending four-year non-profit institutions, these are the four most common student illnesses that can delay the completion of a degree:

●  Concussion

●  Mono

●  Pneumonia

●  Flu

GradGuard co-founder, John Fees, says that living in such close proximity (such as on a college campus) increases the likelihood of certain illnesses. “For the last decade, two percent of college kids get mono a year. Two percent of eight million students is a lot,” he said. In fact, Fees notes that because of flu, mono, pneumonia, and concussions, about 100,000 students withdraw per year for legitimate medical reasons.

According to the ACHA data, other issues that delay degree completion include stress, death of a friend or family member, and cold or virus symptoms.

 

Mental Health Alert

National research also shows a dramatic increase in anxiety, depression, and mental health conditions among young people.

A study published by the Journal of Adolescent Health showed that rates of anxiety increased among college students from 18% to 34%, and depression from 23% to 41%, over the last few years. Other mental health conditions that resulted in semester disruptions –and that have significantly increased over the same period:

  • PTSD
  • Bipolar Disorder
  • Eating Disorders

More students go to college with pre-existing health and mental health conditions than ever before, according to Fees. In addition, the stress of COVID-19 and its ramifications can make certain mental health conditions worse. When a pre-existing mental health condition becomes an acute crisis, it may well force a student to leave school for a while.

 

Do Colleges Refund Tuition for Medical Withdrawals?

According to a 2019 survey conducted by HigherEd Study, only six percent of schools offer 100 percent tuition refunds to students who completed a medical withdrawal — down from 23 percent in 2015.

The majority of the schools don’t provide any refund for room and board or academic fees.

Colleges and universities are required to give information on their websites about their refund policies. GradGuard says that the over 400 schools they work with do, but many other institutions do not.

Families should check with the school’s parent association to get the real scoop on refunds, or ask the school directly about their policies. When a student leaves college after attending the first five weeks, the school has to give their student and federal loan money back to the Department of Education. As a result, most higher education institutions only provide prorated refunds for tuition during the first five weeks of a semester, and virtually no schools provide refunds for academic fees or housing. There are typically no refunds provided beyond this point.

 

What Is a Tuition Insurance Plan?

If your student needs to withdraw for a covered injury or illness, a tuition insurance plan may provide a refund for tuition, room and board, and academic fees. Rule of thumb: If you can’t afford the cost of an extra college semester, then consider purchasing tuition insurance coverage before the beginning of classes.

GradGuard, in partnership with Allianz Global Assistance, is the only major provider to cover withdrawals due to becoming ill with COVID-19. It’s also the only program that covers mental health as a medical condition.

 

How Does Tuition Refund Insurance Work?

A Personal Story

GradGuard’s Director of Marketing, Natalie Tarangioli, has talked to many parents and students who have filed a claim for tuition insurance. She says she often hears from members that having a financial “safety net” helps prevent a mental health crisis from derailing college entirely. Tarangioli describes the case of one student who entered college with a pre-existing condition of anxiety and depression: “Her mom bought her a tuition insurance policy, just in case. And as you know, last year was really tough…and things started to take a turn for the worse. The student’s doctor evaluated her condition and decided it was best for her to withdraw.”

After she filed a claim, the family was repaid $25,000 — the entirety of what they had insured with GradGuard. “She’s going back to school [this fall], in just a few weeks,” says Tarangioli. “That time she [was able to take] to recover sets her up for more success.”

 

How to Purchase Tuition Insurance

If your college offers it, obtaining tuition insurance directly through them is the most economical way to get coverage. Plans cost 1.06-2% of the cost of tuition and other fees families want to insure. The average cost that families insure is $10,000 per term, GradGuard says. If your school doesn’t offer tuition insurance, you can purchase it directly from private companies such as GradGuard.com.

 

Other Types of Insurance

Health

Many colleges offer health insurance plans to students and require them to purchase or opt-out by showing proof of alternative insurance.

A college health insurance plan may make sense for some students. Know that if you have family health insurance, your college student can remain on a parent’s plan until the age of 26. Depending on your plan, you’ll want to confirm the requirements to use your student campus health clinic.

If you choose to opt-out of health insurance offered by your student’s college, make sure you notify the college of your choice since many schools automatically include this fee on college bills.

Renters

Students living away from home for the first time may not be aware of the kinds of incidents that may happen on campus, and the school’s policies regarding them, including:

1. Colleges and universities are unlikely to replace stolen or damaged student property– 98 percent of schools don’t. (HigherEd Study)

2. Nearly 2,000 fires are reported within on-campus student housing annually, according to Clery Act safety reports.

3. In 2018, 34 percent of crimes committed on campus were burglaries. (Criminal Incidents at Postsecondary Institutions)

Bottom line: The unexpected happens! Your homeowner’s insurance policy likely does not automatically provide coverage for your student living away from home and on campus. Make sure you know any terms, limitations, and exclusions that may apply.

Home insurance policies are also often subject to high deductibles, and may increase the cost of your insurance if you file a small claim for a stolen bike or backpack, for example. The chances of needing renters insurance for college can seem low until something happens and it’s too late to add it.

Tarangioli cites the case of a student at Morehouse College. When COVID-19 prompted campus shutdowns in March 2020, he took a few of his belongings home, but left shoes, clothes, and other small items in his dorm room. When he returned in May 2020 to clean out his room, it had been ransacked and his most valuable items were taken. Renters insurance covered this.

When Faith started at Virginia Commonwealth University, a school that recommends renters insurance, her father had to convince her to get it. According to a GradGuard testimonial, she’d just returned from spring break when she discovered that a pipe had burst in her dorm room, creating one big mess. “The whole wall was torn off,” she remembers. “There was a film over the entire room.” Industrial heaters used to dry out the room actually made it worse — they had melted some of her things. This incident was also covered by renters insurance.

Faith says she was grateful she had insurance and that it was easy to file a claim and get reimbursed for the damage.

 

Is Insurance Included in Tuition?

It depends on the type of insurance. Check with your school for details regarding renters, health, and tuition coverage.

 

What Type of Insurance Should You Get?

Insurance can help mitigate financial losses that come unexpectedly. In the end, deciding what type of insurance you need is based on your family’s financial situation, any medical conditions your student may have, the refund policy of the college, and current family insurance policies.

For more information about insurance for college students, watch our Facebook Live.

This article was sponsored by GradGuard.

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Karen Sosnoski

Karen Sosnoski is a mother of teens and a writer based in northern Virginia. Her writing has appeared in literary and mainstream publications, including, most recently The New York Times, Healthline, and The Temper She loves telling (and reading) stories about resilience found through facing limitations.
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