Not every student completes the college semester or school year. Students leave for a variety of reasons with some planning to return later while others change schools or do not return at all. If a student leaves early in the semester, there may be a partial refund of the tuition paid but if it gets too late in the semester, there may be no money coming back at all. This can be problematic given the high cost of college these days.
Not surprisingly, the insurance industry has come up with insurance products for this very situation, providing coverage that will refund some or all of that lost tuition. There are significant limitations on this type of coverage – remember we are talking about insurance companies here – and a voluntary departure to go find oneself is not likely to be covered. However, a not insignificant number of students leave each year because of various health issues and this situation typically can be covered by insurance, purchased in advance, of course. While physical health issues, including injury, are the predominant reason for interrupting education, an ever increasing number of students are leaving for mental health reasons. That may make this insurance a good bet for your college bound kids.
Fortunately, the insurance is not terribly expensive – a few hundred dollars to cover a semester’s tuition of, say, $15,000 or so – and might be a good way to provide some protection for that investment. Again, it is important to remember that only certain reasons for a student’s failure to complete a semester will support a reimbursement from the insurance company. Personal choice is probably not insurable and that includes bad acts and, shall we say, stupid ones. However, with the road to the future always pitted with various risks and uncertainties and the cost of tuition going ever higher, this insurance might be a good bet for whoever is funding that tuition payment. This reflects another interesting way how insurance affects many aspects of our lives.