The National Association of College and University Business Officers (NACUBO) recently published the first update to its Student Financial Services Policies and Procedures Report since 2007. The report contains particularly useful information regarding the common practices by colleges and universities on topics such as financial literacy and the types of financial services offered to students.
Of particular interest is that 27% of colleges and universities report offering tuition insurance on either a mandatory or optional basis. This is consistent with the 2015 Refund Policy & Disclosure research conducted by GradGuard but it is also useful to consider what the consequences are NACUBO confirming such low participation.
In the context of GradGuard's research that found:
- Only 23% of of schools surveyed provide a 100% refund to students for medical withdrawals.
It may be generous to assume that 23% of schools who provide 100% refunds and 27% who offer tuition refund are truly 50% of the market, but it does seem probable that at least 50% of students likely invest in college without the ability to protect themselves from the financial loss that may result from a medical withdrawal.
Largely Unprotected & Uninformed:
Despite the potential for large financial losses to students, GradGuard's research revealed that 80% of institutions only passively disclose their refund policies simply placing it within the university website or handbook and 58% cannot verify if students have been informed of the policy.
Promising Trend Where Schools Largely Agree that Offering Protection is Prudent:
As a result, schools that do not provide 100% refunds for medical withdrawals will be prudent to provide "notice" of the institutions refund policy and provide the opportunity for their students to receive tuition refund insurance.