Investing in a college education doesn’t come cheap. However, there are some ways to protect students and parents from losing a lot of money when the unexpected comes up.
The cost of college continues to rise. According to Forbes, for the Class of 2018, 69% of students took out loans, graduating with an average debt of $29,800. We take a look at one option students and parents have to protect that investment.
One way is through Tuition Insurance.
This optional route works like most insurance coverage, where you pay a premium to get coverage for students who drop out of school for a reason, such as health issues.
“Also, sometimes it can cover things like if the student has job loss or their parent. Mental health withdrawal, or if the student is academically dismissed,” said Karrie Morgan, USF Director of Financial Aid.
Karrie Morgan, USF Director of Financial Aid, says they don’t promote this type of coverage because they do have options for students to get some money back if they drop-out or have to leave school. However, not all schools are so generous.
“The family may lose out on that money if they don’t otherwise have it. Depending on the school’s tuition refund policy,” said Morgan.
Morgan says do your homework before you sign up for Tuition Insurance, because not all policies are created equal. Some may cover health issues, while others may not cover pre-existing conditions.
Her best advice with any college investment is to do your homework first.
“I think just making sure you understand what the costs are. What the aid is. The free money that doesn’t have to be repaid, like scholarships and grants. And then knowing what loans are and which loans have to be repaid when you’re done with school. I think it’s the best thing to be educated with the cost,” said Morgan.
Tuition insurance typically costs 1-percent of your tuition costs. That varies depending on the company you use, and the school you attend.