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Sallie Mae Now Offering Tuition Insurance For Students

The cost of college tuition has been increasing dramatically over the years — greater than inflation in many instances. Some schools have adopted double digit increases, others try to keep the impact on families at a minimum, while some have taken the Muskingum approach and slashed tuition prices.

Regardless of the various approaches to tuition pricing, the investment in a college education can easily be the most expensive purchase a family can make — with the exception of their home. However, from what I can see with the rising cost of college, it may be possible for that education investment to surpass the purchase price of even a modest home…

Since we insure our homes, would it not make sense for us to want to obtain some sort of protection on our college investment?

Sallie Mae, the nation’s No. 1 financial services company specializing in higher education, believes that a college education is worth insuring. They believe in it so much, they are rolling out a brand new division, Sallie Mae Insurance Services, to offer their services and products to students nationwide.

I recently had the opportunity to sit down with William A. Suneson AAI, Co-Founder and President of Sallie Mae Insurance Services, and learn a little more about the various insurance products they are offering to families.

The following is our Q & A session. I hope you find it helpful as you contemplate protecting your educational investment.

CheapScholar: A lot of families have never heard about Tuition Insurance. Can you provide an explanation of how Tuition Insurance works and why it might be a good option for students/families?

Suneson: After purchasing a home, paying for college is often times the second largest expense for families creating a growing financial risk.  Additionally, many colleges do not provide a refund after the 4th week of classes for medical withdrawals and only provide partial refunds up to that point.  Tuition refund insurance provides families with an option to protect their investment in college should a student be forced to withdraw for medical reasons.  Essentially the coverage provides reimbursement up to the policy limits for tuition, fees, room/board and other related expenses upon the verified medical withdrawal of the student.

CheapScholar: What kind of premium/expense (approx) can a family expect to invest in this type of coverage?

Suneson:
The premium to purchase tuition refund insurance varies by the amount of coverage a student or family selects based on their cost of attendance, out of pocket exposure and risk tolerance.  Through school sponsored plans, our policy premiums range  from $186 for $10,000 of annual coverage up to $486 for $50,000 of annual coverage.

CheapScholar: Tuition Refund Insurance has been in existence on campuses since the 1930’s. What does Sallie Mae bring to the table to help distinguish their newly introduced tuition insurance product from others.

Suneson: Yes, tuition refund insurance has been available for decades but historically only to students attending private institutions or private K-12 schools.  With the growing cost of paying for college, Sallie Mae Insurance Services has launched a modern form of tuition protection that allows students from any accredited college or university to purchase a policy based on their individual needs rather than a single amount offered by select institutions.  In addition to coverage flexibility, our product provides 100% percent reimbursement for mental health related claims rather than the 60% offered in the past by other plans.

Another distinguishing factor and clear advantage of our tuition insurance product is the inclusion of the Student Protection Plan with every policy sold.  This comprehensive bundle of benefits has been specifically designed for college students and includes Identity Theft Protection, Computer Repair Coverage, Emergency Medical Evacuation and Extended Warranty coverage.

CheapScholar: College students have a number of insurance needs during their educational career. Does Sallie Mae plan on rolling out other insurance products and services that may benefit these students in coverage and cost?

Suneson: Yes, Sallie Mae Insurance Services recently launched a suite of products on www.salliemae.com/insurance including renters insurance, travel insurance, student health insurance and other products for young adults post college.  We also have a number of products in development including tuition payment insurance designed to help tuition payers (parents) maintain their payments should something unforeseen happen to them.

CheapScholar: Bill, is there anything I didn’t cover above that you would like to highlight regarding this new venture by Sallie Mae?

Suneson: Doug, Thank you for this opportunity and for bringing awareness to the risks students and their families face during this life stage.  For over 40 years, Sallie Mae has been helping families save and pay for college so protecting that investment is a natural extension of the business.  We are focused on helping students achieve their goals by protecting them against unforeseen risks.

If you enjoyed this conversation and want to discuss the topic further, feel free to leave comments below or you can always reach out to Mr. Suneson on Twitter at BILLSUNESON

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