COVID-19 Cements the Growing Case for Tuition Insurance
Even before the COVID-19 pandemic, tuition insurance was growing in popularity as a way to protect students’ and families’ financial investments in college education. Prior to the pandemic, the majority of 179 institutions surveyed reported an increase in student medical withdrawals.
From ordinary illnesses to mental health conditions and injuries such as concussions, data from the American College Health Association confirms a growing number of college students with significant health conditions and unique challenges that may require them to withdraw.
The growing frequency of medically related withdrawals and the ongoing pandemic create a real need for families to protect their college investment, while the rising cost of college — particularly housing and academic fees — makes it more difficult for institutions to provide refunds. These clashing realities contribute to the growing prevalence of tuition insurance.
What does tuition insurance cover?
Tuition Insurance can provide a refund for deposits, academic fees, housing and tuition when a student completes an unexpected medical withdrawal due to common covered conditions:
- Chronic Illness
- Mental health conditions
- Serious injury or illness
Depending on the policy, other issues and preexisting conditions may be covered. Typically, claims due to known, foreseeable, or expected events, epidemics, cessation of operations by the school, or fear of attending school aren’t normally covered. However, for the fall 2020 semester, TouchNet’s tuition insurance partner, GradGuard, is accommodating claims when an insured student completely withdraws from school for the covered term due to becoming ill with COVID-19.
Benefits to students and families
The pandemic has made it more important for schools to provide students and families with a way to protect their higher education investment. For incoming students, even knowing tuition insurance is available could be a differentiator when choosing which school to attend. Once they’re enrolled, having a safety net in place also can help them stay more focused on learning.
For students close to completing their degree, tuition insurance promotes higher graduation rates by helping families afford the cost of an extra semester. In fact, a national poll from Ipsos for Allianz Global Assistance indicated that 23 percent of parents surveyed couldn’t pay for an additional semester of classes and 51 percent indicated it would be difficult.
Benefits to schools
Tuition insurance can be integrated with school enrollment and billing, which ensures students are aware of availability and minimizes schools’ administrative recordkeeping.
Depending on the carrier, programs such as GradGuard also help reduce financial costs to schools for providing refunds and administering appeals processes. By relying on a third party to review standard medical withdrawals, schools can transfer both the risk and cost to GradGuard.
In addition, schools can reduce difficult collections issues from students who are forced to withdraw. As a named tuition insurance beneficiary, schools can recoup debt or account balances from students who withdraw.
No insurance covers every possible scenario. But by offering fully transparent tuition insurance that's also easy to sign up for, schools can protect themselves while providing students and their families with peace of mind knowing they’ve taken an extra step toward protecting their investment.
To learn more about how TouchNet and GradGuard work together, register to watch our on-demand GradGuard tuition insurance webinar.