GradGuard for Higher Education

Tuition Payment Plan Protection

Posted by John Fees on Jul 16, 2015 12:06:08 PM

According to the NACUBO SFS report, as of 2013 95% of institutions surveyed offered tuition payment plans.  cover_of_nacubo_report

These payment plans are a valuable way for families to extend their tuition payments into more manageable expenses.  Often, the institutions that offer such payment plans also charge an additional administrative fee.  Schools report that this fee is typically between $50 and $100 per term.  

GradGuard, a service of Next Generation Insurance Group, offers an affordable way for institutions to provide more than just the convenience of extended payments, but also the ability to protect future payments. Payment Plan Protection allows families to fulfill their contractual obligations in the case of an unexpected event.

GradGuard's Payment Plan Protection program, underwritten by Securian, covers future payments in the case of an unexpected death, disability, or involuntary unemployment of a tuition payor.*Contact Next Generations Insurance Group for complete details and restrictions. Not available in all states.

Infrequent but Dramatic Impact:

A study by Balk, Walker and Bakers shows that for every two years of college attended, 1.7% of students can expect a parent to pass away.  At a glance this may look like a low percentage of students; however, at a mid-size school with 10,000 students, 170 students would suffer from death of a parent. That number is not small enough to ignore.

What happens to these 170 students? Two reports indicate that loss of a parent frequently disrupts a student’s education:

  • The ACHA-NCHA’s survey shows that 15.7% of students reported that within the last 12 months the death of a family member or friend had been traumatic or very difficult to handle[ii]
ACHA_Logo_copy

Historic Low Levels of Family Protection:

Unfortunately families may be unprotected. According to LIMRA's 2011 Life Insurance Ownership Studyonly 33% of Americans have individual life insurance coverage[iii].LIMRA_logo_copy Although 56% of all workers have group life insurance through employers, that's still a somewhat dismal number. 

But what do these numbers mean for college students? In the absence of adequate life insurance, the change to EFC (Expected Family Contribution) is frequently too large for a family to absorb. The death of a parent can prevent a student from completing their college education if they are unable to afford the cost of tuition.

 

The Student and the School Pay the Price:

When a student who has lost a parent withdraws from school because they can no longer afford the cost of tuition, the institution suffers the loss of tuition revenue and lower completion rates.

Many schools, to their great credit, attempt to provide institutional aid for students who have lost a parent and would otherwise be forced to.  But this is not always possible and it is never cost free.

Introducing Tuition Payment Plan Protection including important benefits that can increase participation and help families maintain their payments.

  • Provide a benefit to families, who pay the administrative fee to participate in your payment plan program.
  • Retain students who have worked hard to achieve their education goals, but have lost a primary tuition payer and may face difficulties in completing the payment plan contract. 
  • Retain tuition income by assuring payment plan participants will be able to maintain their contracted payments.

Colleges can help protect participants in their tuition payment plan programs by including this affordable benefit within the administrative program fee.   Learn more today.

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[i] Pleskac, T. J., et al. A detection model of college withdrawal. Organizational Behavior and Human Decision Processes (2011),

doi:10.1016/j.obhdp.2010.12.001

[ii]    American College Health Association. American College Health Association-National College Health Assessment II: Reference Group Executive Summary Spring 2013. Hanover, MD: American College Health Association: 2013. (page 15).

[iii]http://www.limra.com/Posts/PR/News_Releases/Ownership_of_Individual_Life_Insurance_Falls_to_50-Year_Low,_LIMRA_Reports.aspx

GradGuard is a service of Next Generation Insurance Group, LLC. Copyright © 2015 - GradGuard. All rights reserved.

The plan administrator is Minnesota Life and the Contractual Liability Policy (CLP) underwriter is Securian Casualty.  Products offered by Securian Casualty Company. 400 Robert Street North, St. Paul, MN 55101-2098 • 651-665-3500 • Securian Financial Group, Inc. 

Topics: student success, Student Life, College Life Protected, Tuition Insurance, life insurance, college parents, college completion

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GradGuard for Higher Education examines how unexpected losses can affect student success, bringing you the latest in best practices and trends for safety on and off campus.

Here you'll learn more about:

  • Risks on and off campus
  • How schools are using benefits programs to protect and attract students
  • Effects of loss on student outcomes

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