Is Tuition Insurance Worth It?
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Learn more about how much college could cost — and, how to afford it:
The total price tag: Cost of attendance
What’s in your budget: Find an affordable college choice
Funding options: Federal vs. private student loans
What you’ll pay after graduation: Calculate monthly student loan payments
Tuition insurance, which pays out if you need to leave school, can be worth the cost if your college does not have a sufficient refund or medical withdrawal policy.
Schools typically have guidelines around who is eligible for a refund and under which circumstances, but those rules can be hard to find and are often ambiguous.
Some colleges allow students to withdraw for medical reasons and finish their coursework after they recover for no additional charge. Others are much less flexible. Before buying tuition insurance, verify your school’s refund and medical withdrawal policies.
Ask your school’s registrar’s office about its policies. If it doesn't have the information you’re looking for, ask a representative to direct you to the right office. If you’re uncomfortable with what you find, tuition insurance can provide peace of mind and a refund if you have to leave school.
Tuition insurance costs
Tuition insurance costs can vary depending on school costs, but plans are often available for under $200 per semester. Fees are generally lower (about 1% of college costs) if your school provides its own tuition insurance or partners with a third-party provider. Expect higher fees (about 2% of costs) if you purchase insurance directly from a third party.
Read the details of any tuition insurance policy to make sure its coverage is adequate for you. Not all policies offer the same coverage levels. For example, some don’t cover claims based on COVID-19 or other outbreaks.
Tuition insurance coverage
Tuition insurance reimburses you for lost college costs if you leave school for a qualified reason. It typically covers nonrefunded money for tuition, fees, room and board.
Qualified reasons are normally health-related and can include unexpected injury and illness, ongoing or chronic illness, and mental health conditions.
You can typically buy tuition insurance up to the day of your first class. Some colleges also allow you to buy insurance as part of the tuition payment process, which makes it easy to use your student loans and other aid to cover the costs. Your school might even include tuition insurance as part of its cost of attendance.
COVID-19 coverage
Some insurance policies may include COVID-19 or pandemics in general, but that is not standard across the industry.
If your plan does include COVID-19, verify the details of that coverage. Generally, the plan will pay out only if you contract the disease. You likely won’t receive any benefit if you withdraw because of fear of getting COVID-19 or if you withdraw because your school changed its instruction method due to the pandemic. And just because an insurer covers COVID-19 for the fall semester doesn’t mean it would continue to provide that coverage in the future.
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