Does tuition insurance provide coverage for COVID-19?

Posted at 6:42 PM, Aug 10, 2020
and last updated 2020-08-10 18:49:49-04

BUFFALO, N.Y. (WKBW) — College is the second biggest expense for many Americans, according to a report from Business Insider, but do you need to insure your tuition, and does it cover students during a pandemic?

John Fees, co-founder of GradGuard, a tuition insurance provider, said the insurance covers students who are forced to leave school for unexpected medical reasons. Pandemics are typically excluded from the policies, but this year the company is making an exception for COVID-19.

“You have to become ill, you have to have a positive diagnosis, and your doctor should recommend you leave school," Fees said.

If a student chooses to withdraw from school voluntarily, they will not get their money back, even if the reason for withdrawing stems from COVID-19.

“It doesn’t cover the change in how classes are taught," Fees said. "It’s not business interruption insurance, and even if you’re quarantined, that’s not a medical withdrawal.”

Fees said the plan refunds tuition, housing, academic fees, and deposits.

Students with pre-existing conditions are eligible for the plan, if they provide a doctor's note stating they're healthy enough to attend class.

He said the cost of GradGuard's insurance is $200 for every $10,000 worth of coverage, but that it's cheaper for schools that offer tuition insurance. Locally, Fees said SUNY schools and Syracuse University are examples of schools that do not offer tuition insurance. He said D'Youville College offers students plans through GradGuard.

He advises those who do purchase the insurance to get a coverage plan for the total out of pocket cost.

Like all insurance policies, there is a cost-benefit factor. Robert Dunn, Vice-President of Counseling at Consumer Credit Counseling Service of Buffalo, and said to read the fine-print of the policy and ask questions regarding your specific scenario.

"Draw up two or three likely scenarios that you might see happening," he said. "I think that would be the case for most people that are exploring it, that they're concerned about one or two things that may arise while they're in school, and so pretty much to run those hypothetical scenarios by the provider of the insurance and get a hard solid response on those and then proceed whether to purchase it or not."

Michael Trivette, co-founder of College Transitions, said it doesn't hurt for families to see what type of tuition insurance is being offered given the unknowns of the upcoming school year.

“Generally speaking, they’re not that popular at least not before COVID-19," Trivette said. "I think over the past few months, we’ve definitely seen a surge in folks who are interested in these types of programs.”

Fees said the first step is taking a close look at your school's refund policy. Experts warn many colleges don't provide refunds after the first few weeks. According to SUNY's website, full tuition refunds are available through the first week of class. By week five, students are responsible for 100% of tuition.

The insurance must be purchased before classes start.