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What to know about tuition insurance

Experts suggest looking at the school's withdrawal policy. Dates are mapped out explaining how much money you can get back by when.

INDIANAPOLIS — We insure pricey purchases every day from homes to wedding rings.

For some, college tuition is no different.

But like all insurance products, make sure it covers what you are concerned about.

Cecilia Clark with NerdWallet said tuition insurance usually covers money for tuition, housing including room and board, and any other fees associated with your college.

Policies, Clark added, do not typically cover a family member's illness or if the student wants to withdraw because of remote learning.

"Generally, it's sickness and if you have a mental issue that you have to take care of," Clark said, "but it really depends on the insurers."

As for the cost, that is based on your tuition costs.

"It's typically a percentage of your tuition, generally between .5% and 2% of the coverage amount," Clark said.

Before you buy anything, first, talk to the school.

"Ask them how flexible they are with getting an incomplete. Some institutions allow you to work until you have to withdraw, take an incomplete as a grade, and then come back and finish your coursework with no money loss," Clark said.

Also, look at the school's withdrawal policy. Dates are mapped out explaining how much money you can get back by when.

"How soon do you need to withdraw to get a 100% refund, where does the 80% kick in and so forth," Clark said.

A spokesperson for tuition insurance company GradGuard said they've been growing each year since their founding in 2009.

They added the number of policies sold double each year since the start of the pandemic, with a 400% increase in policies since 2019.

As for local schools, they said in a statement that "Butler, Purdue, Saint Mary's and the University of Indianapolis to offer tuition insurance that's embedded through the billing portals. These partnerships enable students and families to purchase tuition insurance directly through the school rather than on our website, which provides them with more comprehensive coverage at a better rate. Students attending schools we don't currently partner with can still purchase policies through our website, but the cost is closer to 2% versus as low as 1.06% the cost of tuition, room and board, and academic fees."