How to Calculate the Appropriate Amount of Tuition Insurance

How to calculate the amount of tuition insurance needed varies based on two factors. Tuition and fees make up a large portion of the total expense and essentially pay for the education that is acquired. Along with these costs, you must also factor in other expenses of living that students will incur while attending college. By combining tuition and fees with the other living expenses, an estimated total cost of college can be calculated.

A recent survey conducted by College Parents of America, focused on two major sectors of U.S. higher education, 4-year colleges and universities with large enrollments and 4-year colleges and universities ranked among the most expensive by total cost of attendance. The two reports on college tuition reimbursement for medical withdrawal were completed and released in February 2010. Each sector sampled 100 colleges and universities, totaling to 178 schools due to some institutions appearing on both lists.

4-year colleges and universities with large enrollments
Of the 100 schools surveyed, 97 have clearly listed tuition and fee refund schedules, while three provide only information regarding a tuition and fee refund appeal process. The amount of refunds received after the 5th week of classes varied between the 97 schools with listed refund schedules.
• At 61 schools, 0% of tuition and refundable fees
• At 14 schools, less than 50% of tuition and refundable fees
• At 7 schools, exactly 50% of tuition and refundable fees
• At 15 schools, over 50% (includes schools that refund pro-rata)
Therefore, out of the 97 4-year universities examined, after the 5th week of classes in a given term:
• 63% do not refund any tuition or refundable fees for medical withdrawal
• 85% refund 50% or less for medical withdrawal

The most expensive 4-year colleges and universities
Out of the 100 surveyed, only 97 schools have clearly listed tuition and fee refund schedules, the remaining 3 provided no information regarding refund schedules. The approximate total cost of attendance for this sample group ranges from $46,000 to $54,000 per year. The amount of refunds received after the 5th week of classes in a given term due to medical withdrawal can be broken down like so:
• At 45 schools, 0% of tuition and refundable fees
• At 19 schools, less than 50% of tuition and refundable fees
• At 10 schools, exactly 50% of tuition and refundable fees
• At 23 schools, over 50% (includes school that refund pro-rata)

Therefore, after the 5th week of classes in a given term,
• 46.4% do no refund any tuition or refundable fees for medical withdrawal
• 76.3% refund 50% or less for medical withdrawal

As shown from the statistics of the study, without tuition insurance, a full refund is not attainable in the event of medical withdrawal at the surveyed institutions. With tuition insurance, students can receive up to $50,000 of annual coverage, depending on which level of coverage is purchased.

While large sums of coverage are attainable, cost of coverage is very minimal. Depending on the needs of each student, the correct amount of coverage can be purchased for 1.2% – 2.4% of the total coverage. By combining the cost of tuition with other incurred costs of living, the correct coverage amount can be calculated.