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Can you afford an extra semester? How tuition insurance can help

(BPT) - Given the current economic climate, social issues, and rising college tuition, completing a higher education degree has become quite difficult.

While some students are still overcoming the 2024 FAFSA difficulties, consumers are smart to evaluate their investment in a college education the same way any large purchase is made. Understanding the terms and conditions, and particularly the refund policies of the school you attend is vital.

The essential fact is that, according to the National Student Clearinghouse, nearly 76% of the 2.4 million students who started college in fall 2021 returned for their second year. In addition, the same source has reported that 113,000 students withdrew from college in 2021 for legitimate reasons, including medical conditions.

For these students and families, it is important to ask what will happen if your student is forced to withdraw due to an unexpected reason such as an accident, illness, injury, or even job loss. Most schools report only providing a prorated refund through the first weeks of class and nothing thereafter.

According to the College Board, in 2023-24, average estimated budgets (tuition and fees, housing and food, and allowances for books and supplies, transportation and other personal expenses) for full-time undergraduate students range from $19,860 for public two-year in-district students and $28,840 for public four-year in-state students to $46,730 for public four-year out-of-state students and $60,420 for private nonprofit four-year students.

Given this risk and the billions of dollars families invest, it's smart to learn more about college tuition insurance. The idea is fairly simple: Should a student have to leave college for a legitimate reason covered by the plan, tuition insurance can provide a refund to cover the financial loss. If you cannot afford the cost of an extra semester, then families are smart to evaluate tuition insurance providers like GradGuard, which offer plans that can protect up to 100% of the cost of college from $1,500 to $50,000 per term.

Not convinced it's worth the investment? Check out these seven reasons why tuition insurance is worth asking for from your school.

1. Tuition refund

Life's stressors and unforeseen circumstances can lead students to withdraw from college. It's more common than you think. A 2024 study by Gallup and Lumina Foundation found that more than a third of college students pursuing a bachelor's degree considered withdrawing from their program for a semester or more.

Should you withdraw, recouping tuition expenses may not be possible. Tuition refunds vary by institution, but according to a 2019 study by HigherEd Study, very few schools offer full or partial refunds.

However, with college tuition insurance, you may be able to receive a partial or full tuition refund should you withdraw for a reason covered by your plan. This safety net can provide much-needed financial relief in an otherwise stressful situation.

2. Return to school

Many students who withdraw from their programs do eventually decide to re-enroll. That said, returning to school after an unexpected withdrawal is easier said than done. If you withdraw and decide to return to school, you may owe additional expenses that can prevent you from enrolling.

Tuition insurance can pay those account balances and help students return to classes when they are well enough to do so. In fact, according to a 2023 survey by GradGuard, 75% of students with paid claims returned or planned to return to school.

3. Reducing financial stress and negative mental health impacts

Mental health can tremendously impact a student's ability to succeed academically. Sometimes, mental health issues force students and their families to make a hard decision between pursuing mental health support or withdrawing from their studies.

Disruption to your education because of mental health issues doesn't have to add to your family's stress. Depending on your plan, college tuition insurance can cover mental health-related withdrawals, ensuring your student gets the help they need without worrying about tuition costs. In fact, according to the 2024 Gallup-Lumina Foundation study, 64% of students who considered stopping out say emotional stress or mental health concerns are significant reasons.

4. Housing and fees

In addition to the lack of tuition refunds, virtually no institutions offer refunds for housing costs and fees. Most national forms of tuition insurance, like GradGuard, can provide refunds for housing expenses and academic fees associated with attending college should you leave for a reason covered by your plan.

5. Accidents, illnesses, and injuries

Accidents, illnesses, and injuries happen. Depending on the severity, a student may have to withdraw from college to take care of their physical health. Focusing on healing is hard enough and only more difficult if a student also has to contend with financial loss because of an academic withdrawal.

College tuition insurance can protect you financially if you have to withdraw due to an unexpected medical reason. If you must withdraw for medical reasons covered by your plan, you can focus on recovery without worrying about tuition costs.

6. Loss of employment

Many students depend on the financial support of their families. If a parent should lose their job, it could impact the ability for a student to complete a term. A new feature some tuition insurance companies like GradGuard now provide coverage for is the involuntary loss of employment of a tuition payer, depending on the plan. This added financial protection can help students overcome a loss if they cannot complete the term.

7. Peace of mind

Overall, the reason college tuition insurance is worth the investment is the peace of mind it can provide students and families. You can rest easy knowing your financial costs can be protected for various reasons. This security can help a student pursue higher education more confidently.

Consider these seven reasons why college tuition insurance is worth the cost. To learn more about the types of plans and range of benefits, visit

Terms, conditions, and exclusions apply, including for pre-existing conditions. Plans only available to U.S. residents and may not be available in all jurisdictions. Recommended and provided by Grad Guard, a service of Next Generation Insurance Group, LLC (NGI), the licensed agent for all insurance programs. AGA Service Company, dba Allianz Global Assistance (AGA), compensates GradGuard, their national program management partner, for the marketing, distribution and administration of the products. Insurance plans include insurance benefits and assistance services. Pricing may vary by state. Insurance benefits are underwritten by Jefferson Insurance Company (NY, Administrative Office 9950 Mayland Drive, Richmond, VA 23233) rated 'A+' (Superior) by A.M. Best Co., A+ (Superior) is the 2nd highest standard of A.M. Best's 13 Financial Strength Ratings. Non-insurance benefits/services are provided by AGA Service Company. Claims are administered by Allianz Global Assistance (AGA). Allianz Global Assistance is a mark of AGA Service Company or its affiliates. AGA Service Company is an affiliate of Jefferson Insurance Company. Plans include insurance benefits and assistance services. Except as expressly provided for under the plan, consumer is responsible for charges incurred from outside vendors. Contact AGA Service Company at 888-427-5045 or 9950 Mayland Dr., Richmond, VA 23233 or Schools do not receive compensation for purchase.

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