Safeguarding Your Investment: Understanding the Benefits of Tuition Protection Plans

The cost of education represents a significant investment, potentially the second largest after purchasing a home. Protecting this investment is crucial, and tuition protection plans offer a way to do just that. This article explores the benefits of tuition protection plans, how they work, and what you need to consider before purchasing one.

What is a Tuition Protection Plan?

A tuition protection plan, also known as tuition insurance, is designed to reimburse non-refundable school expenses if a student has to withdraw from their classes due to unforeseen circumstances. These circumstances often include covered illnesses, injuries, or mental health conditions. Think of the Tuition Protection plan as an extension of a college's refund policy.

Key Benefits of Tuition Protection Plans

Financial Reimbursement: The primary benefit is the potential reimbursement of up to 100 percent of non-refundable school costs, including tuition, housing, and other education expenses. This reimbursement applies after a complete withdrawal from all classes due to a covered reason.
Risk Mitigation: Tuition protection alleviates financial loss if a student cannot complete a term due to unexpected events. While colleges often provide partial refunds for withdrawals, these are usually limited and only effective early in the term.
Peace of Mind: Knowing that a tuition protection plan is in place can provide peace of mind for both students and their families. At Emory University, they want families to have peace of mind during their entire time with them.
Student Life Assistance: Many plans include Student Life Assistance, offering a 24/7 hotline to help students stay safe both on and off campus.

How Tuition Protection Plans Work

Coverage Period: Coverage extends through the end of the semester.
Complete Withdrawal Requirement: Protection typically requires a “complete withdrawal” from the college, meaning the student has given written notice that they will not receive any academic credit due to injury or sickness.
Term-Based Coverage: Coverage refunds on a term basis only.
Claims Process: Claims should be reported within 30 days from occurrence or as soon as it is reasonably possible. The completion of a claim form is usually required.
Benefit Payment: In some cases, benefit payment is made to the university to be credited to the student’s account, with any remaining funds refunded to the student. At High Point University, benefit payment is made to High Point University to be credited to the student’s account. Benefits not required to settle your account with High Point University will be refunded to you through High Point University.

Factors to Consider Before Purchasing a Plan

Individual Net Cost and Risk Appetite: Whether to purchase tuition insurance, and at what coverage amount, depends on individual net cost and personal risk appetite.
Terms, Conditions, and Exclusions: Terms, conditions, and exclusions apply, including for pre-existing conditions.
State Availability: Plans may not be available to residents of all states. For example, Best Co. Plans may not be available to residents of all states.
Policy Details: The insurance agreement is between you and the insurance provider. For example, at The University of Alabama, the insurance agreement is between you and GradGuard; The University of Alabama is not a party to the agreement.

Key Providers and Administrators

AGA Service Company: AGA Service Company is the licensed producer and administrator of some plans and an affiliate of Jefferson Insurance Company. AGA Service Company also provides non-insurance benefits/products.
Allianz Global Assistance: Allianz Global Assistance is a mark of AGA Service Company or its affiliates and administers claims for some plans.
GradGuard: GradGuard, a service of Next Generation Insurance Group, LLC (NGI), is the licensed agent for all insurance programs and is compensated by AGA Service Company for marketing, distribution, and administration of products.
A.W.G. Dewar Insurance Agency: A.W.G. Dewar Insurance Agency administers The Tuition Refund Plan.
Atlantic Specialty Insurance Company: The Tuition Refund Policy is underwritten by Atlantic Specialty Insurance Company, New York, NY, a member company of the OneBeacon Insurance Group, for A.W.G. Dewar Insurance Agency.

Scenarios Where Tuition Protection Can Help

Illness or Injury: If a student becomes ill or injured and cannot complete the term, the plan can return tuition and allow the student to re-enter college when the term must be repeated.
Mental Health Condition: Unexpected complete withdrawal of all classes (at any time during the covered semester) due to a mental health condition.
Unforeseen Circumstances: If you are hurt or become ill and cannot complete the term, you stand to lose thousands of dollars. The Tuition Refund Plan will alleviate if not eliminate your financial loss.

Important Considerations

Optional Nature: Tuition insurance is completely optional.
Purchase Timing: Insurance must be purchased prior to the first day of classes. No applications can be accepted if received after you start classes.
Non-Insurance Benefits: Non-insurance benefits/products are provided and serviced by AGA Service Company.
Consumer Responsibility: Consumers may be responsible for charges incurred from outside vendors for assistance or concierge services, except as expressly provided for under the plan.

The Tuition Refund Plan: A Historical Perspective

The Tuition Refund Plan was originated in 1930 to protect the financial investment of students and parents in education. Today, over 1200 leading independent schools throughout North America offer the Plan. The Plan described above has been specifically designed for the needs of college students and parents.