College Tuition Insurance Gains Attention in Pandemic

Despite the uncertainty around Covid and increased concern about mental health, some colleges say there hasn’t been a rush among families to buy tuition insurance. Reed College in Portland, Ore., which offers coverage through GradGuard’s main competitor, A.W.G. Dewar, said the number of families that bought coverage fluctuated between 5 and 10 percent each year.

“The college has not experienced any significant changes in participation or claim activity as a result of the pandemic,” Mandy Heaton, a Reed spokeswoman, said in an email.

Dewar, which has provided tuition insurance since 1930, offers policies at dozens of institutions of higher education, including marquee names like Columbia and Stanford Universities, as well as private elementary and high schools. Buying the insurance is optional, but some schools automatically enroll students unless they opt out.

The details vary by campus, but typically the Dewar policies reimburse 70 to 80 percent of the cost of tuition, fees, and room and board, according to online policy offerings. Some schools allow students to customize their coverage, for tuition only or to add room and board. Rice University, for instance, offers coverage for both the coming fall and spring terms for $745, or $582 for tuition only, according to its offering through Dewar. Or families can buy a specific amount of coverage, depending on their need.

Stanford has offered tuition insurance for 30 years, said Ernest Miranda, a university spokesman, but “only a very small percentage of students apply for it,” including during the pandemic. In part, he said, that’s because about a third of undergraduates pay no tuition out of pocket, thanks to need-based aid and scholarships, and many more have at least a portion of tuition covered.

Ragan D. Lower, president of Dewar, said in an email that there had been an “uptick” in plan participation in the last year, but that the company did not disclose data about claims.

Dewar’s tuition refund plan does not exclude student withdrawals due to epidemics or pandemics, so withdrawals because of Covid-19 illness “would generally be covered,” he said.

Article source: https://www.nytimes.com/2021/08/06/your-money/college-tuition-insurance.html