In 2020-2021 the average cost of tuition at a 4-year public school was $9,375. The total cost of attendance for the year (including room and board) was $21,337.

With annual college tuition costing as much as an entry-level sedan, it comes as no shock that students and parents (who may be footing the bill) want to insure their purchase against calamity.

While some colleges offer tuition refunds when you withdraw before classes start, the “sliding scales” of tuition reimbursement mean that students often can’t get meaningful reimbursements after school has been in session for a month.

In partnership with GradGuard, we’re explaining how college refunds work, and how tuition insurance can reduce the risk of an early withdrawal from school. GradGuard offers tuition insurance that can help you insure your college tuition investment against risks like leaving school.

Before you withdraw from school, here are the key things you should know about college refunds.

How College Refunds Work

As mentioned, most schools offer tuition refunds on a sliding scale. If you withdraw from classes before the semester begins, you can usually expect a full refund of your tuition minus deposits or academic fees. Those fees are typically minor relative to the total cost of your tuition.

It's important to note that if you withdraw before the start of the semester, you will not be eligible to receive the funds from public grants or scholarships given through your school.

Once the semester begins, potential refunds begin to shrink. After one week, your school may offer a 75-80% refund. A week later, the refund shrinks to 40-50%. This shrinking refund lasts for four to six weeks until schools no longer allow any refunds for withdrawals, even for medical reasons.

Because tuition refunds decline so quickly, the best time to withdraw from classes is before school starts. If you don’t withdraw early enough you may be left with student debt for an entire semester’s worth of tuition with no credits to show for it.

Do Colleges Offer Exceptions For Military Or Medical Reasons?

The policy on refund exceptions varies from school to school. Several schools have policies that cover full refunds for reservists that are called up to active duty military. Others consider exceptions through a standard appeals process regardless of the reason. Most of the time, you will need to withdraw from classes before you can begin the process of appealing for tuition refunds.

It’s important to note that many schools describe tuition refunds (via the appeals process) as exception-based, extenuating, or rare. Unless your school has provisions for the refunds, you should not count on getting a refund through your school.

For example, during the early stages of the Covid-19 pandemic, more than 200 colleges and universities shut down in-person learning for part of a semester (or more). By and large, these schools did not offer full or partial refunds for students who withdrew (there were nationwide programs offering forms of relief). If a global pandemic doesn’t warrant refunds, it’s tough to see how other serious illnesses might lead to a refund.

Can I Get A Refund On My Room & Board?

In general, you can’t get a refund for room and board (along with academic or activities fees) after your move-in date. Though the policy may vary by school, you shouldn’t count on your school refunding your residential fees. If you’re not sure whether you are committed to attending school in a given semester, you may want to consider living at home or off-campus during that time.

Tuition Insurance And College Refunds

If the stringent requirements around tuition refunds make you nervous, tuition insurance may be a product worth buying. Tuition insurance can reimburse up to 100% of your tuition costs for the semester if you have to withdraw for a covered reason. Covered reasons can include personal illness or injury, mental health conditions, or a flare-up of a chronic health condition (provided that it's covered by the policy).

While tuition insurance can cover the cost of tuition, some plans may cover the entire cost of college. For example, GradGuard provides protection for tuition and room and board, and academic fees for covered medical withdrawals.

Plus, tuition insurance is typically very reasonably priced when you consider the risk. To check out rates, head over to GradGuard and get a quote >>

Even Tuition Insurance Doesn’t Offer Tuition Guarantees

While tuition insurance can cover a range of medical and other cover events, it doesn’t offer a guaranteed refund for all withdrawals. For example, students who withdraw to care for family members or due to other family hardships may not be covered by tuition insurance. Likewise, withdrawals simply because “college isn’t a fit” won’t qualify.

You need to understand the terms of the insurance product before you sign up. Don’t count on having a “get out of college free” card if school isn’t working out for you for reasons that aren’t covered by the policy.

Tuition insurance offers some peace of mind, but it's up to you to understand what the policy covers. If you buy it in the hopes that it will cover certain scenarios, you may be sorely disappointed when you’re left holding the bag for tuition costs. Most plans can cover withdrawals due to serious health conditions, the death of a tuition payer, or other covered reason.