Tuition insurance? More families opting for it due to COVID-19
Most parents with a child in college likely have no idea that tuition insurance is even an option, and has been for years.
But the investment has certainly gained popularity over the last several months in New Jersey and nationwide, as parents attempt to ensure the global pandemic won't result in the loss of tens of thousands of dollars put out for college tuition and fees.
The idea of the add-on purchase is to cover the money that's not refunded by an institution when a student withdraws from all classes. Many schools have their own withdrawal policies that offer an increasingly lower percentage of tuition reimbursement as the weeks go by.
"If a student and family rely on refunds from the school itself, this is typically only through the first few weeks of classes," said Natalie Tarangioli, marketing and content specialist for GradGuard.
GradGuard currently partners with nine institutions in the Garden State, including Rutgers University, Princeton University, The College of New Jersey, and Ramapo College of New Jersey. These partnerships offer students access to insurance at cheaper rates than individuals who'd like to purchase insurance on their own.
Purchases must be made before a semester begins.
Up from 10 last fall, Ramapo saw 69 of its 6,000 students purchase a tuition insurance plan heading into the 2020-2021 academic year, according to a college spokesperson. Rutgers contracted 45 plans with GradGuard this fall, compared with 17 enrollments last fall, a spokesperson said.
GradGuard, which has been around for about a decade, is seeing more inquiries and purchases than ever before, Tarangioli said.
That's likely because earlier this year, the company included the COVID-19 health crisis in its policy. If an insured student leaves school due to becoming ill, because a doctor recommends a withdrawal, insurance coverage would apply.
"We are treating claims related to COVID-19 just as we are any other ordinary illness or injury," Tarangioli said. "We're hoping that this helps students and families have some more peace of mind."
A.W.G. Dewar and Liberty Mutual also offer tuition refund plans.