Tuition insurance

Heard a radio ad for a product that provides tuition insurance.  Paying the premium provides coverage for tuition for students who withdraw from their college courses.  That is, if a student drops out, the insurance plan will reimburse the student's tuition.  This might seem like flight or cruise insurance, but in those instances, one is guarding against an unforeseeable circumstance in the relatively distant future that inhibits intended action and for which little recourse exists to recapture the early prepayment.   For tuition, the payment typically is made just before the semester, and there are opportunities to recapture payment in that withdrawals are refunded on a prorated basis.  Also, leaves of absence and incompletes may be issued.

So while schools will refund some or all of the tuition anyway, making this a largely unneeded and unwarranted expenditure, the interesting issue is the insuring against the unforeseen circumstance.  There are certainly a lot of "legitimate" (sickness, etc.) withdrawals, but the majority are made by students trying to avoid a bad grade.  Many years ago we used to see a lot of students towards the end of the term show up in our offices looking for extra credit or breaks of various kinds to suddenly and miraculously improve their grade, replete with dire tales of what would happen if they received a poor grade.  There is still some of that, but these days it is more typical for students to look for assurance that they can simply withdraw without penalty and in essence wipe the slate clean, except for the money they or their parents have flushed away.

In any case, the tuition insurance, to put it kindly, is usually a very poor investment.