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Tuition refunds are rare. In fact, many colleges require you to withdraw before classes begin in order to receive a refund.
The average tuition at a four-year public school is about $9,375. The total cost for the school year (including room and board) was $21,337.
Given that annual tuition fees are as high as those for an entry-level sedan, it's not surprising that students and parents (who may be footing the bill) want to insure their purchase against disaster.
While some colleges offer tuition refunds if you drop out before classes start, the “sliding scales” of tuition refunds often mean that students are unable to receive a significant refund after a month of study.
In partnership with GradGuard, we explain how college refunds work and how tuition insurance can reduce the risk of dropping out of school. GradGuard offers tuition insurance that helps you insure your college tuition against risks like dropping out of school.
Here are the most important things you should know about college tuition refunds before you drop out.
How college refunds work
As mentioned above, most schools offer tuition refunds on a sliding scale. If you withdraw from courses before the semester begins, you can usually expect a full refund of your tuition, minus any deposits or tuition fees. These fees are usually small relative to the total cost of your tuition.
Please note: If you de-register before the start of the semester, you are not entitled to receive any funds from public grants or scholarships from your university.
Once the semester starts, potential refunds start to decrease. After one week, your school might offer a 75-80% refund. A week later, the refund drops to 40-50%. This decreasing refund rate continues for four to six weeks until schools no longer allow refunds for withdrawals, even for medical reasons.
Because tuition refunds drop so quickly, the best time to withdraw from courses is before you start college. If you don't withdraw early enough, you may be left with an entire semester's worth of tuition without any credits to show for it.
Do colleges offer exceptions for military or medical reasons?
Policies for refund exceptions vary from school to school. Some schools have policies that provide a full refund for reservists called to active military duty. Others consider exceptions through a standard appeals process, regardless of the reason. In most cases, you must withdraw from courses before you can begin the process of requesting a tuition refund.
It is important to note that many schools describe tuition refunds (via the appeals process) as exceptional, extenuating, or rare. Unless your school has a refund policy, you should not expect to receive a refund from your school.
For example, during the early stages of the Covid-19 pandemic, more than 200 colleges and universities suspended in-person classes for part of a semester (or longer). By and large, these schools did not offer full or partial refunds to students who dropped out (there were nationwide programs that offered some form of assistance). If a global pandemic does not warrant refunds, it is hard to imagine how other serious illnesses could warrant refunds.
Will I get a refund for my accommodation and meals?
Generally, you cannot receive a refund for room and board (along with tuition or activity fees) after your move-in date. Although policies may vary by school, you should not expect your school to refund your housing fees. If you are unsure whether you absolutely need to attend school during a particular semester, consider living at home or off campus during that time.
Tuition insurance and college refunds
If the strict requirements for tuition reimbursement worry you, tuition insurance may be a worthwhile product. Tuition insurance can reimburse up to 100% of your tuition for the semester if you have to drop out for a covered reason. Covered reasons may include personal illness or injury, mental illness, or flare-up of a chronic condition (if it is covered by the policy).
While student insurance can cover tuition, some plans may cover the entire cost of college. GradGuard, for example, offers protection for tuition, room and board, and academic fees for covered medical withdrawals.
Plus, tuition insurance is usually very affordable considering the risk. To check prices, go to GradGuard and get a quote >>
Tuition fee insurance also does not offer any tuition fee guarantees
While tuition insurance can cover a variety of medical and other coverages, it does not provide guaranteed reimbursement for all dropouts. For example, students who drop out to care for family members or due to other family difficulties may not be covered by tuition insurance. Nor are dropouts covered simply because “the college isn't a good fit.”
You must understand the terms of the insurance product before you sign up. Do not rely on getting a “free education card” if you are not satisfied with your studies for reasons not covered by the policy.
Tuition insurance offers a certain level of security, but you need to understand what the policy covers. If you take it out hoping it will cover certain scenarios, you may be sorely disappointed when you're stuck with tuition. Most plans can cover withdrawals due to serious health issues, the death of a tuition payer, or other covered reasons.
Final thoughts
College is an investment – you're spending money to increase your future income. That investment (in the form of tuition, room and board, books, supplies, and more) can be very expensive. And if something happens, you may not get a refund from your college.
Before making a final commitment, make sure you understand the college's refund policies, and consider purchasing tuition insurance (and possibly insurance for your dorm room tenants) to ensure you're covered against some of the biggest risks of college life.
If you decide to get tuition insurance, you can get started with GradGuard here>>.
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