From 2020 to 2021, average tuition The four-year public school tuition was $9,375. The total cost of attendance for the year (including accommodation and meals) was $21,337.
With an annual college tuition costing as much as an entry-level sedan, it’s no surprise that students and parents (who may be paying for it) want to insure their purchases just in case something goes wrong.
Some universities offer tuition refunds if you withdraw before class begins, but tuition refunds are “sliding,” so students often don’t get a meaningful refund for the first month after classes begin.
We partnered with GradGuard to explain how college refunds work and how tuition insurance can reduce the risk of dropping out. GradGuard offers tuition insurance that can insure your investment in college tuition against risks such as dropout.
Here are some important things to know about college refunds before you drop out of school.
How college refunds work
As mentioned above, most schools have a sliding tuition reimbursement scheme. If you withdraw from classes before the start of the semester, you will usually receive a full refund of the tuition fee minus the deposit and fees. These fees are usually small compared to the total tuition fees.
Please note that if you withdraw before the start of the semester, you will no longer be eligible for any public grants or scholarships offered through the school.
As the semester begins, the chances of a return begin to shrink. After a week, the school may offer her a 75-80% refund. After a week, the refund will be reduced to 40-50%. This reduction in refunds will last 4-6 weeks until the school no longer allows refunds for withdrawals, even for medical reasons.
The best time to withdraw from classes is before school starts, as tuition refunds occur very quickly. If you don’t withdraw early enough, you may be left with student loans for an entire semester of tuition without being able to prove your credit.
Does the university make exceptions for military or medical reasons?
Refund exception policies vary by school. Some schools have policies that cover full refunds for reservists called up for active duty. Some people consider exceptions through the standard appeals process, regardless of the reason. In most cases, you will be required to withdraw from classes before you can begin the process of requesting a refund of your tuition fees.
It is important to note that many schools describe tuition refunds (through appeals procedures) as exception-based, extenuating, or infrequent. Unless the school has a refund policy, you should not expect to receive a refund through the school.
For example, in the early stages of the COVID-19 pandemic, more than 200 universities closed in-person learning for part (or more) of the semester. By and large, these schools did not offer full or partial refunds to expelled students (there were national programs that provided some form of relief). If the global pandemic doesn’t justify refunds, it’s hard to see how other serious illnesses will lead to refunds.
Can I get a refund for my room and board?
In general, room and board fees (including tuition and activity fees) after the move-in date are not refundable. Policies may vary by school, but you should not expect the school to reimburse you for your stay. If you are unsure whether you plan to attend school during a particular semester, consider living at home or off-campus during that period.
Tuition insurance and college reimbursements
If you are unsure of the strict requirements for refunding tuition, tuition insurance may be a worthwhile purchase. Tuition insurance can reimburse up to 100% of your tuition fees for the semester if you have to withdraw for a covered reason. Covered grounds include personal illness or injury, mental health conditions, recurrence of chronic health conditions, etc. (if covered by insurance).
Endowment insurance can cover tuition fees, but some plans can cover the full cost of college. For example, GradGuard protects tuition, room, board, and medically deductible school expenses.
In addition, endowment insurance is usually very affordable considering the risks. To see pricing, visit GradGuard to get a quote >>
Tuition insurance does not cover tuition
While tuition insurance can cover a variety of medical emergencies and other compensatory events, it does not offer guaranteed refunds for all withdrawals. For example, students who drop out due to family caregiving or other family reasons may not be covered by endowment insurance. Similarly, dropping out simply because “university doesn’t suit you” is not eligible.
You should understand the terms of the insurance product before enrolling. If school isn’t doing well for a reason not covered by your policy, don’t count on a ‘college free’ card.
Tuition insurance provides some peace of mind, but it’s up to you to understand what your insurance covers. If you buy it expecting it to cover certain scenarios, you might be terribly disappointed when you’re left with a bag for tuition. Most plans can cover withdrawal due to serious health conditions, death of the tuition payer, or other covered reasons.
final thoughts
College is an investment. Spend money with the goal of increasing your future income. That investment (tuition, room, food, books, supplies, etc.) can be very expensive. Also, if something goes wrong, you may not be able to get a refund from the university.
Before making a final decision, make sure you understand your university’s refund policy and consider looking into tuition insurance (and possibly dorm room renter insurance) to ensure you’re covered against some of the university’s biggest risks.
If you have decided to purchase an endowment insurance policy, you can start GradGuard here >>.