The Hechinger Report - Tuition insurance for Covid-19

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By Delece Smith-Barrow

During the coronavirus pandemic, it’s difficult to go to college on campus, where masks, hand sanitizer and social distancing may not be enough to prevent students from catching the deadly illness. In planning for the worst, some students and families may take advantage of a new product: tuition insurance that includes Covid-19 protection. And while it might be a strain for some to add yet another cost to the already expensive endeavor of attending college, for those who can spare the expense, coverage might not be a bad idea.

“About three weeks ago is the first time we announced that we would be providing coverage for Covid,” said John Fees, cofounder of GradGuard, which provides tuition insurance for students through a partnership with Allianz. “We’re basically treating it like any other illness, and we’re not excluding it from payment.”

Tuition insurance plans have been around for decades, but not all institutions offered them and until recently those that did offer such insurance may not have included Covid-19 as a qualifying illness.

In the last few weeks, about 30 institutions have signed up for GradGuard, he said, making a total of about 350 institutions from coast to coast that offer the company’s tuition insurance plan. The details vary from school to school, but the average cost is $106 for $10,000 worth of coverage. And it’s not just tuition. GradGuard insurance also covers housing, academic fees and books.

In July, Georgetown University sent students a letter about its College Tuition Refund Plan, which is offered through A.W.G. Dewar Inc., a company that has offered tuition insurance to students since the 1930s. While Georgetown will refund students a portion of their educational costs up to the ninth week of the semester, a Dewar plan covers 100 percent of tuition, fees, room and board charges. (Disclosure: I teach journalism classes in Georgetown’s master’s degree program.)

Fordham University has had a partnership with Dewar for 14 years, but it wasn’t well-known to students, according to a campus student publication, The Observer. In July, however, Fordham emailed students about the Dewar Tuition Refund Plan, which covers students who need to leave school for medical reasons.

Dewar plans vary based on the institution. At Bowdoin College in Maine, for example, the premium for the fall semester ranges from $237 to $288. For Loyola University Chicago, students pay an annual premium of $278 that covers tuition, fees, and on-campus room and board.

While tuition insurance plans provide a financial safety net for students who must drop out of school because of coronavirus or other illnesses, buyers should not expect coverage if a campus has to shut down suddenly, as many did in the spring.

“That’s not covered,” Fees said. “That’s a business interruption or that’s a change in quality or type of education, not an actual financial loss.”

Teens and young adults have had fewer Covid-19 associated hospitalizations than other age groups, but they are still at a relatively high risk of getting ill from the disease. Between March 1 and August 1, the cumulative rate of hospitalization was 55.9 per 100,000 people for those between 18 and 29 years of age, according to the Centers for Disease Control and Prevention.

Tuition insurance can certainly be a benefit if there’s an emergency, said Sandy Baum, a non-resident senior fellow in the Center for Education, Data and Policy at the Urban Institute who has used tuition insurance. But each family will have to weigh the cost-benefit analysis and think about how realistic it is that a student would become so ill that they’d be unable to finish the semester, she said.

“Even in the absence of Covid, it’s a sensible thing if it’s well priced,” she said. “Clearly, for any student the probability of becoming ill and having to withdraw is higher than it would be in normal times, but not that much higher. It’s going to depend on how it’s priced.”

Will you purchase tuition insurance this school year? How can students and families protect their investment in higher education? Email or tweet me your thoughts.

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The Hechinger Report - Tuition insurance for Covid-19

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