Leaving college amid coronavirus? Getting a reimbursement could be difficult

COVID-19 threw a wrench in many students’ plans. Here’s how to get a tuition refund. (iStock)

By nearly all measures, the coronavirus pandemic’s impact on the U.S. economy, and Americans’ wallets, has been catastrophic.

About 12.58 million Americans were collecting unemployment insurance in the week ending September 19, according to the U.S. Department of Labor’s weekly jobless claims report. Meanwhile, 32% of people surveyed by Apartment List said they entered August with unpaid housing bills from the prior month. And, to avoid mortgage foreclosure or eviction, millions of Americans have taken on credit card debt over the past six months to make ends meet.

Student loan borrowers are getting hit hard as well and with U.S. student debt reaching an all-time high of nearly $1.5 trillion in November 2019, the situation is dire.

Furthermore, the coronavirus crisis has upended the way students attend college, with universities across the nation adopting online learning this fall semester. That’s led to a wave of college students opting out of attending school this fall.

This prompts two big questions:

How do these students get their tuition reimbursed?

What happens to loans they’ve taken out for the semester?

It’s a tough spot to be in, considering that students paid, on average, $15,000 at public universities on tuition and fees and $27,000 at private universities last year, according to the College Board. (An online marketplace like Credible can help you find the lowest student loan rates.)

Here’s what students that are seeking tuition reimbursement need to know.

What is the typical school refund policy?

Although tuition reimbursement policies vary by institution, many colleges offer refunds on a sliding scale, depending on when a student withdraws. For example, at the University of California, Los Angeles (UCLA), whose fall quarter began September 23, a student can withdraw through November 11 and receive at least 40% of their tuition back.


What is tuition insurance?

The pandemic has put a spotlight on tuition insurance—an insurance policy that helps students recoup tuition fees in certain situations.

Tuition insurance provides tuition reimbursement, typically 75% to 100% of the fees paid if a student cannot continue their education because of a qualifying medical event, such as a life-changing injury, or a mental health condition, like severe depression. (Many insurance companies require students to provide a statement from a doctor or mental health professional verifying their condition.)

Not all cases are covered by tuition insurance. The definition of a valid medical claim may vary from policy to policy.

Another thing to consider: tuition insurance policies usually exclude epidemics and pandemics from qualifying as valid reasons for insurance claims.

There are exceptions though. GradGuard is a case in point. The insurance provider, which partners with more than 330 colleges and universities, is currently accommodating claims for when an insured student withdraws from school for the covered term due to becoming ill with COVID-19. (If a student chooses to withdraw because they’re afraid to move to campus due to coronavirus concerns, they would not be covered.)

Some schools, like Santa Clara University, automatically enroll their students in a tuition reimbursement plan. At Santa Clara, students diagnosed with Covid-19 who must withdraw are eligible for 80% tuition reimbursement through the school’s Tuition Refund Plan.


Is tuition insurance worth it?

Purchasing tuition insurance is a good idea for many college students, especially those who are paying full freight since it will give them peace of mind knowing they’re protected in the event of a medical emergency.

It’s also relatively affordable. Tuition insurance costs (on average) about 1% of a student's total tuition cost, according to the National Association of Insurance Commissioners (NAIC). So, covering a $30,000 semester could cost as little as $300.

But before purchasing a tuition insurance policy, there are a few steps you should take:

Check if your school already provides tuition insurance. According to a 2018 College Parents of America survey, only a quarter of parents said the child’s college refund policy was disclosed during the enrollment process.

Read the fine print. Some insurance plans offer broader coverage than others. Remember: some insurance plans offer coverage for contracting Covid-19, but many don’t.

Consider your financial footing. If losing a significant portion of your tuition fees would put you in dire straights, tuition insurance is worth purchasing.


Learn about student loan options

Simply put, a college education is expensive. Annual tuition fees at some schools creep into the six digits. Need help figuring out how you’re going to foot the bill?

Turn to Credible. Rates and terms vary from lender to lender, so just a few extra quotes from lenders could save you significantly in the long run. Click here to compare rates now.

Credible's online student loan calculator will help you estimate the total amount you'll have to borrow and identify what your monthly payment would be.