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How much tuition should you pay if the student is away?

As the new school year is scheduled to begin in a matter of days, there are still a lot of families wondering how it will look. I doubt the vast majority of parents want a repeat of last year. 

Each school district has its own set of challenges regarding health and safety protocols. But it’s virtually impossible to get administrators, educators and parents to all agree on the best approach to take. Making changes along the way will be akin to rocking a boat that’s already in rough water.

It’s a real dilemma. There are so many variables with this seemingly never-ending pandemic, who can say for sure what’s the best and safest way for our schools to operate? It’s especially difficult for parents. Their most treasured assets are their children and they obviously want them to get a good education in a safe environment.

The same holds true for parents of college age kids. I know a number of parents who were stuck with apartment leases last year, even after classes went remote and students returned home. In normal times, when students change their minds or circumstances change, their apartments can usually be sublet. That can’t happen when the entire college town goes home and the campus becomes a ghost town. But the lease obligations still need to be met.

In addition, tuition costs didn’t decrease as classes went from lecture halls to online. Which means parents of college students were paying in person prices for remote instruction.

That’s why tuition insurance might be a good idea for some. You may not be aware it exists, but it’s offered by many universities and third-party insurance companies. Plans provide for anywhere from a full to partial tuition reimbursement, depending on the circumstances.

If a university changed its policy and decided to go to remote learning and a student just up and left, it’s not likely that you’d be able to collect.

However, if you have tuition insurance and a student became ill and needed to withdraw, your chances of receiving a full or pro-rated tuition refund are excellent. That includes any unforeseen medical condition or accident that made withdrawal necessary. Some plans cover death of the student and tuition providers, usually the parents. Timing of the withdrawal, of course, is a factor.

If you do choose to get tuition insurance be sure to carefully scrutinize the terms and conditions of the policy. Don’t just shop for the cheapest premium. Also be sure to review the contract language because some programs even insure college expenses beyond tuition.  And finally, look at the financial strength of the insurance company you’re considering.

I feel badly for the families that have saved and invested for their children’s college education for years. There’s still no certainty regarding what the campus experience will be this fall.  It may not be what parents thought they were paying for. 

From kindergarten to grad school, these are difficult times for both educators and parents alike. Everybody wants to do the right thing, but there’s no consensus what that may be.

Policies can change quickly in this pandemic environment, but the bills keep coming. It might be worth your while to explore the availability of tuition insurance. Especially if you’re shelling out tens of thousands for tuition.

Know Someone?

Do you know someone who would like to meet with a financial advisor?

Ken Morris 248.952.1744

E-mail your questions to kenmorris@lifetimeplanning.com

 Ken is a registered representative of LPL Financial. Securities and financial planning offered through LPL, a Registered Investment Advisor, member FINRA/SIPC. Ken is Vice-President of the Society for Lifetime Planning in Troy. All opinions expressed are those of Ken Morris. LPL and Society for Lifetime Planning are independent companies. Investing involves risk including loss of principal. No strategy assures success or protects against loss.