What Is Tuition Insurance?

What Is Tuition Insurance?

What Is Tuition Insurance? | brokeGIRLrich

College is expensive, y’all.

I’ve been thinking about heading back to academia and the thing first and foremost in my mind is cost.

Tuition is astronomical and making that investment is a huge decision. Among the many factors I’ve been considering, I wondered, what happens if I need to drop out?

I may decide the program isn’t for me and choose to leave – that’s a possible reality – but sometimes life just happens too. I may get too sick to continue (heaven forbid) or someone back home might get sick and need me to move back and help take care of them (because, hey, it’s happened).

And all of these things are 100 percent my decision. I’m the one deciding to go to school. I’d be the one making any decision to leave. It’s my money that would disappear.

What happens if it’s not? I can imagine that 25 years from now, I might be worried about my own children making decisions like that (because, let’s face it, on the path I’m on right now, my kid might be concerned with me being so old that I’ll need to be taken care of when they’re in college) – and what their decisions while they’re in college could cost me.

Saving for college is a huge responsibility. If you have high school freshman this year, based on this Forbes study, you could be paying just over $38,000/year when they start and $46,000 a year when they finish – assuming they finish in 4 years.

And that’s for a public school. If your kid gets into one of the top universities in the nation, it could be closer to $85,000 a year.

That is a lot of money going down the drain if something unexpected leads to your child needing to take some time away from the classroom.

Let’s also face it – college isn’t for everyone and some people struggle to adjust. You know your kid better than anyone else, so you’ve got a good idea of whether or not college is the best next step or if it’s going to be a real struggle for them.

Interestingly, there’s a new kind of insurance out there- tuition insurance.

If your child does not complete the semester because of a covered illness, injury, psychological/mental disorder, adjustment issues or other reasons, tuition insurance will reimburse your non-refundable tuition payments, fees, and room and board costs up to the amount of coverage you selected.

Allianz Global Assistance is one of these tuition insurance companies and they have three different price points. The Essential Plan starts at $29.99 per term and the other two plans (The Preferred Plan and The Advantage Plan) both have more comprehensive coverage for a little more.

Allianz Global Assistance Coverage Chart

Allianz Global Assistance Coverage Chart

To me, this seems like a brilliant idea for folks who know their child may or may not be college material. Now, I get that that’s a rough assessment to make, but I think you know if your kid is really going to struggle or maybe they’re just not emotionally mature enough to succeed on their own yet.

Additionally, you may have a kid who had a childhood illness that could reappear or who struggled with some psychological issues that could flare up. This insurance could help you ensure the money is still there to help them get back to school once they get better.

For your average kid, the one with good grades, who was happy at sleep away camp and pretty much already manages their life on their own, college will probably be a breeze, and just like any insurance, this kind might not be the best choice for you.

However, if you know the college adjustment might not go so smoothly, looking into tuition insurance could actually save you a lot in the long run.

*DISCLAIMER: This post is sponsored by Allianz Global Assistance (AGA Service Company), but the opinions are mine.

6 thoughts on “What Is Tuition Insurance?

  1. With all due respect, this product is NOT a good idea for most people. With the “affordable” plan, you are betting $29.95 for the chance to “win” $2,500 and you are betting against someone who knows the odds. You throw around those huge figures and talk about wasted money if you have to drop out, but tuition etc is paid one semester at at a time and most kids who drop out do so at the end of a semester, not in the middle. Further, a lot of schools will work with you if illness makes you drop out. In the grand scheme of things, the $2,500 you could gain if something went wrong isn’t going to alter most people’s lifestyles. Subtracting $2500 from a student loan balance isn’t going to change that student’s post-college life. Insurance is for things you can’t afford to have happen; otherwise it is a sucker bet.
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    • I don’t necessarily think it’s a suckers bet for a LOT of kids these days. You know your kid- college isn’t for everyone, but we say it is. So a lot of people who shouldn’t necessarily be there go. I don’t think my parents ever would’ve thought of taking out tuition insurance on me and they would’ve been right. However, I have a younger cousin who has dropped out of school 3 times. 3 TIMES!!! How her parents just keep paying and don’t buy something like this is beyond me.

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