You’ve likely finished shopping for everything your child needs as they head off to college. But there might be one more thing to get — tuition insurance. Yes, there is such a thing.
Tuition insurance covers a student who unexpectedly has to withdraw from school, beyond the period when the school would offer reimbursement. You are reimbursed for what you paid for the semester.
It’s tempting for parents. According to the College Board, the average cost of tuition and fees for the 2017—2018 school year was $34,740 at private colleges, $9,970 for state residents at public colleges and $25,620 for out-of-state residents attending public universities. Typically, policies run about 1 percent of the costs paid to the school. Companies like Liberty Mutual, GradGuard and Allianz offer policies.
What’s covered? Mostly, an injury, or a mental or physical illness, even a pre-existing one. But if Junior decides he just doesn’t want to do the college thing after all, that’s between you two.
Is this another college-related product you don’t need?
If your child has a chronic medical condition, or mental health issues, it might be worth it. Do a little digging. What’s your school’s reimbursement policy? While you can’t time everything, often there is a 30- to 60-day grace period in which you can get a full or partial refund from the school. Bailing earlier is better than deeper into the semester.
Says Doug Mitchell, owner of Ogletree Financial Services in Auburn, Alabama, “Tuition insurance can save families a fortune in forfeited tuition and fees. Tuition insurance is inexpensive. Just know that not all schools are covered. Read and understand the policy before you buy it."