tuition insurance private school

tuition insurance private school

Tuition insurance private school

Tuition refund insurance, also referred to as tuition insurance, provides coverage in case a child is forced to withdraw from college for medical or other reasons. A handful of colleges and private secondary schools offer tuition refund insurance through a third party. (See also loan repayment protection.)

Tuition refund insurance is generally not recommended for college students except when the student has a serious illness that may force the student to withdraw from school. However, tuition refund insurance plans may include a preexisting condition exclusion of 6 months to a year that can preclude coverage in such situations. Some plans will waive the preexisting condition exclusion after 6-12 months of coverage. Since most 17-20 year olds are healthy, tuition insurance is often not financially worthwhile, but does provide peace of mind.

Because of the peace of mind benefit, tuition refund insurance is more likely to be of interest to parents whose children are attending more expensive colleges and who are paying most of the cost out of pocket.

College Refund Policies and R2T4

Before deciding whether to get tuition refund insurance, it is a good idea to review the college's refund policy.

The federal regulations in 34 CFR 668.22 concerning the return of "unearned" federal student aid, nicknamed R2T4, are rather complicated. The gist is that federal student aid that was or could have been disbursed is earned pro-rate based on the percentage of the period of enrollment that was completed through the date of withdrawal. If the percentage is more than 60% the student is considered as having earned 100% of the aid. Any unearned aid must be returned to the government (in the case of grants) or the lender (in the case of loans). There is a preference order for the return of the student aid that generally returns loan funds before grants.

Many colleges have refund policies that parallel the R2T4 regulations, but not all colleges provide such generous refund policies since there are no statutory or regulatory requirements for refund policies. Some colleges limit the availability and amount of refunds after 30 days into the school year. Refund policies may differ depending on whether the student is receiving financial aid. If a college does not permit refunds and a student withdraws before the 60% threshold, it is possible that the student could end up owing money to the school. For-profit colleges are more likely than nonprofit and public colleges to have refund policies that differ from the R2T4 regulations, but it is best to check each college's refund policy. Aside from such differences between a college's refund policy and the R2T4 regulations, the other main risk is for the family's portion of college costs. This includes amounts paid out of pocket and amounts paid with non-need-based loans such as unsubsidized Stafford, PLUS and private student loans.

Colleges that offer college-specific tuition refund insurance are less likely to have generous refund policies. It is unclear which is the cause and which is the effect. At these colleges the tuition refund insurance may be as much for the benefit of the college as for the benefit of the student.

Also potentially relevant are the discharge provisions on education loans. Federal student loans provide for a discharge of the debt in the event of the death or total and permanent disability of the student or if the school closes before the student graduates. Most private student loans do not have such discharges.

Most tuition refund insurance programs will provide coverage for medically necessary withdrawals due to illness or injury, death of the student or death of the parent or guardian. Some will provide coverage for involuntary job loss or relocation, mental health withdrawals, voluntary withdrawal and dismissal or suspension for academic or disciplinary reasons.

Be sure to ask whether the coverage is full or partial. The coverage may involve coinsurance where the tuition refund will be reduced by a percentage, typically 10% to 40%. In most cases coverage for death or medically necessary withdrawals is 100% (mental health is 60%). But in all cases the benefit is reduced by the amount of any refund from the school.

Also ask about exclusions. Many plans exclude suicide or intentional self-injury, injuries from participation in protests and demonstrations, and withdrawals due to the use of controlled substances or alcohol abuse.

Tuition refund insurance typically costs 1% to 5% of the face value of the coverage per year, ranging from $100 to $1,000 depending on the college's costs and claim history.

Companies offering Tuition Refund Insurance

Tuition refund insurance policies are offered either through selected colleges or through group plans. The group plans are available for use at any accredited college.

Only one company offers a group policy. GradGuard Tuition Insurance is a group tuition refund insurance policy offered in conjunction with membership in College Parents of America. Families can enroll at any time (not just at the beginning of the academic year) and can pick the amount of annual coverage from $5,000 to $50,000 in $5,000 increments. (Coverage for each term is half the annual coverage.) $5,000 in coverage is automatically provided with membership in College Parents of America. Families who purchase at least $15,000 in coverage also receive the "Student Protection Plan" which includes emergency medical evacuation insurance, small gadget theft insurance, five-year warranty extension protection, and computer repair for physical damage and virus damage. All policy levels include identity protection and resolution services. The policy provides 100% coverage for medical disability withdrawal or for death of the tuition payer or student, and 75% coverage for withdrawal due to emotional, nervous or mental disorders, up to the coverage limits. The policy is underwritten by Markel Insurance.

Three companies offer tuition refund insurance through colleges:

A.W.G. Dewar's Tuition Refund Plan provides up to 100% coverage for medically necessary withdrawals at more than 180 colleges and 1,000 private elementary and secondary schools.

EIP's Tuition Guardian product provides $5,000 to $25,000 of coverage per semester.

Should You Have Tuition Refund Insurance?

Paying for private pre-K to 12 schooling or a college education is tough enough – but what if your child or student has to suddenly withdraw, costing you thousands of dollars in unused tuition funds?

One possible solution is tuition refund insurance. Tuition refund insurance, also known simply as tuition insurance, reduces or eliminates your losses in the event of a medical emergency or certain other setbacks resulting in early withdrawal from school. For more on the cost of college see: Pay for College Without Selling a Kidney.

This insurance generally allows you to get some or all of your money back if your child leaves school partway through the year. There are two different types of plans with different rules for each.

One plan covers reimbursement of tuition and other costs for your child attending a private pre-K to 12 school and the other is for students at public or private colleges. Both plans are typically offered by third-party insurers.

This type of plan provides for a full or partial refund if your child who attends a private elementary or secondary school withdraws before the end of the school. Conditions covered, depending on the policy, can include illness, death, job loss, relocation or even expulsion.

Many private schools require that you purchase tuition refund insurance unless you pay for the entire year in advance. Even then, you may elect to purchase insurance to provide peace of mind in the event catastrophe occurs.

The cost of private school tuition insurance depends on the amount of coverage you select, but can be up to about 1% of the face value of education charges (typically tuition and room and board) for the period selected.

Although college tuition refund plans are available for just about any circumstance, most provide for refunds for medical or psychological reasons or the death of the student. Flunking out or being dismissed for disciplinary reasons is rarely covered.

You are not required to purchase college tuition refund insurance and policies are often written a semester at a time instead of for the entire year as is the case with pre-K to 12 policies.

As with private elementary and secondary school policies, costs vary based on coverage and the cost of attending the particular institution but can be up to 6% of covered tuition and related costs.

All tuition refund policies are filed with the state's insurance department in order to provide parents, schools and colleges with complete consumer protection.

Is Tuition Refund Insurance Necessary?

Tuition insurance has its benefits. Families gain through peace of mind and protection from unforeseen events. Schools gain by having their revenue stream protected.

The least expensive policies cover only medical emergencies or events that result in your child having to leave school before the end of the year or semester. That coverage is no help if there’s a job loss or other type of family emergency or unexpected relocation.

You should also know that most universities have a refund policy already in place. University refund policies typically only provide partial tuition reimbursement when a student leaves school within a stated time period – often the first 6 weeks of the school year. By contrast, private pre-K to 12 schools rarely offer tuition or room-and=board refunds.

Before you decide to buy tuition refund insurance you should take the following steps:

  • Find out the school’s refund policy and take it into account to avoid paying for coverage you don’t need.
  • Make sure your student has health insurance. It’s rare for a young person to have to drop out of school for illness. It’s much more common for there to be a temporary setback that requires medical treatment.
  • It may not make sense to buy insurance if your student is receiving a large amount of financial aid. For more see: A Quick Guide to How FAFSA Loans Work
  • Obtain a power of attorney for your college-age student so you can take over health and finances if he becomes incapacitated.

For most people, tuition refund insurance isn’t necessary. If you feel the need to protect your tuition investment – or if your child has a history that might make him vulnerable to early withdrawal – such insurance might be worth considering.

Before you buy don’t forget to investigate the school’s existing refund policy. Then, shop around as you would with any other type of insurance for the best coverage at the best rate. As always, read the fine print for coverage limits and exclusions.

Finally an easy, affordable way to protect your most important investment

Allianz Tuition Insurance provides reimbursement for tuition, housing and other fees in the event of a covered withdrawal.

With more and more students forced to hit "pause9quot; on their education, tuition insurance just makes sense.

You receive financial reimbursement for tuition, housing and other fees for withdrawal for any covered reason. Purchase your plan prior to the semester start date for coverage through the end of that term.

Purchase Allianz Tuition Insurance to protect your investment in the event of a serious covered illness, injury, mental health disorder or other covered reason — including pre-existing and chronic medical conditions.

Tuition and fees have risen so much, the average 4-year degree can be as expensive as buying a home. With the cost of education expected to rise even more, tuition insurance is an affordable way to protect your family's financial well-being against the unexpected.

Taking Tuition Insurance to the Next Level

We've spent years listening to parents, students and schools – to perfect our approach and ensure your tuition insurance plan offers unsurpassed peace of mind and value.

Tuition Insurance explained in 27 seconds

Accident. Illness. Stress and anxiety. Even a pre-exisiting condition. There are many reasons why a student may need to consider withdrawing. Tuition Insurance from Allianz Global Assistance covers them all—offering invaluable peace of mind for as little as $29.95 per term.

Why Tuition Insurance is Necessary

Many parents think that tuition insurance is a waste of money or that they really don’t need it. I suppose that if you happen to be fabulously wealthy, losing $30,000 or $40,000 because your child has to withdraw from her private school might not be a big deal. But for the rest of us, that's real money.

This short video explains how tuition refund insurance works. While the speaker is discussing tuition refund insurance for college, it works the same for private schools. With a boarding school education costing $40,000, $50,000 or more, you can easily understand why tuition refund insurance is required.

Fulford Academy’s Pricing and Fees Per Program

Please find below a full listing of fees and tuition for our program offerings:

2017/18 Tuition and Fees

Includes custodian, textbooks, workbooks, medical insurance, initial school supplies, school tie and cardigan, and transportation on official travel dates, meals and accommodation.

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