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How do college refunds work? Learn how to protect your investment

(BPT) - It's graduation season! If you have a high school senior, you're probably busy planning a party or vacation to celebrate the end of their high school years. Last year, more than 20 million students enrolled in undergraduate and graduate programs across the U.S. If your child is one of the millions of students attending college this year, you also have a lot to do before the fall. However, it's important to set aside time, even now, to plan for your college student's freshman year and have tough conversations about what you'll do in case they need to withdraw.

After all the effort going into choosing the ideal college experience, families don't often consider what might happen if their child may need to leave school during their educational journey. But it's a common enough occurrence that it's best to be prepared. The National Student Clearinghouse found that one in four first-year college students don't return for the second year. Often, leaving school is a tough decision for students and parents. It's even more stressful when families can't recoup the loss of tuition, housing and fees if their school doesn't offer a refund.

Families are smart to not be surprised. Read on to see how you can protect your financial investment in your child's education and receive a refund if they are forced to withdraw midterm due to legitimate reasons including accidents, injuries, or physical or mental health conditions.

1. Learn why students withdraw

Many students have to withdraw for medical reasons, including anxiety, depression, stress, mono, flu and concussions, just to name a few. Even for those who don't withdraw, nearly half (41%) of students have considered withdrawing in the past year, with 55% citing emotional stress, according to the 2023 Lumina Foundation Gallup State of Higher Education Report.

Even if they feel that they need to withdraw, many students push themselves to the breaking point for fear of placing undue financial burden on themselves and their families. That's why it's important to talk with your child about how they're feeling leading up to their fall semester and to check in with them as the term progresses.

2. Understand your school's refund policy

Not knowing why and when your student can withdraw from classes can leave you scrambling should your student need a leave of absence. According to the 2022 College Confidence Index, 74% of students and 66% of parents are unfamiliar with their school's tuition refund policy. Before taking your student to freshman orientation, make sure to review their school's refund policy.

Most colleges don't offer tuition refunds after the first few weeks of school and virtually no schools provide refunds for the cost of housing or academic fees, so it's vital to know important withdrawal dates. Otherwise, you risk losing tens of thousands of dollars if your child is forced to withdraw midterm.

3. Determine if you could afford the cost of an extra semester

If your child's school doesn't offer a tuition refund or you want to be prepared in case your student needs to withdraw after the refund period, you'll need to see if you can afford an extra semester. If you can't, you're not alone. More than half of parents (52%) reported it would be difficult for them to pay for the cost of an extra semester, according to the College Confidence Index. As college costs continue to rise, families have difficulty paying for a regular four-year degree, let alone tens of thousands of dollars for an extra semester.

4. Find out if your school offers tuition insurance

Many colleges and universities offer tuition insurance that provides a tuition refund if your student is forced to withdraw midterm. Your school may partner with an insurance provider like GradGuard, the only company in the country that provides up to 100% refunds for students who withdraw for a covered reason during the insured term.

While hundreds of schools from Auburn, Duke, Harvard, NYU, Purdue, Tennessee, and Vanderbilt provide their students with tuition insurance, some schools may not and it is useful for families to ask them for protection. The only alternative to an official school program is GradGuard, which offers plans to any student attending a four-year private or public nonprofit institution in the U.S. To learn more, visit

5. Know what tuition insurance covers

Not all tuition insurance plans offer the same coverage. Make sure you sign up for a plan that covers a variety of situations that could cause your student to withdraw from classes. Tuition insurance can reimburse the cost of a covered term, including tuition, housing and fees, in case of a covered medical withdrawal.

GradGuard's Tuition Insurance plans can cover ordinary but serious medical conditions like mono and concussions. It also covers mental health conditions that can lead to unexpected withdrawals, including anxiety and depression.

Students who are struggling should not be burdened with feeling the need to stay in school for financial reasons alone. By being proactive, knowing your school's refund policy and purchasing tuition insurance prior to the start of school, your family can have confidence that if your student needs to leave school for a legitimate reason, they can do so. Students can focus on their health and return to school when they are well again.

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