Automatic insurance charge comes as surprise

by Bret Hauff / Beacon Staff • October 13, 2016

If you didn’t check your ECmail this summer, you may have missed a few emails that could’ve saved you $130.

In years past, students voluntarily enrolled for tuition insurance to assure they would be refunded 80 percent of their tuition and fees if they left the college mid-semester because of a physical or mental health issue. This year, all undergraduates were automatically charged for the insurance, according to Emerson’s website. Students were given until Sept. 7, the first day of classes, to opt out of the plan.

The college does reimburse a portion of students’ tuition if they drop out for medical reasons, but the amount decreases as the semester progresses. If a student must leave during the first two weeks, Emerson will reimburse 80 percent of their tuition. But if someone leaves after the fifth week, uninsured, the college will give them nothing.

Students with the insurance are guaranteed 80 percent of their tuition if they drop out at any time; insurance covers what the school doesn’t. If someone who is insured leaves in week four, the college will pay 20 percent and the insurance pays 60 percent.

But this coverage is only applicable if a student leaves because of a medical issue. Students must have a doctor's note and verification from the college to certify the health problem, physical or mental. Room and board are not refunded.

Last year, 84 students purchased full-year insurance and 12 more paid to be insured for only the spring semester, according to the Office of Enrollment. Of these students, seven left the college mid-semester, along with another 66 who were not covered.

This year, 2,971 students bought—or did not opt out of— tuition insurance. Although the Office of Enrollment provided these figures, it declined repeated requests for comment.

Addy Rose, a junior writing, literature, and publishing major, said she didn’t know about the insurance.

“The fact that it costs extra, that students weren’t consulted, is a bad thing,” she said. “But it's good that students have that option [to be insured].”

Emerson offers this policy through a partnership with Quincy-based national tuition insurance firm Dewar. Ragan Lower, vice president of the firm, said that nearly a quarter of the about 140 colleges the firm serves enroll students in tuition insurance automatically, like Emerson did this year.

To understand why institutions are doing this, it’s important to know how insurance works. All policyholders at Emerson paid a $130 fee. This money is put into a pool from which all claims are paid.

Say Emerson enrolls 100 students in this policy; the college would have $13,000 to reimburse any one of those 100 students if they dropped out due to medical emergency. That’s hardly enough to cover 80 percent of one student’s semester tuition. But if every undergraduate at Emerson (3,757 people, according to the school’s website) enrolled in the program, the college would have $488,410 to draw from.

More students enrolled in tuition insurance means the college has more money to reimburse if some leave mid-semester.

“What we’ve seen over the past five years is a very large increase in the number of mental health withdraws,” Lower said. “With the increase in activity, it became more difficult to cover the premium for withdraws.”

There are alternatives to automatic enrollment, Lower said. He said institutions could increase the premium for a tuition insurance policy, but raising the price could deter students from enrolling.

Lower said he expects more institutions to make this transition in coming years because many colleges do not have enough students enrolling in tuition insurance to cover the number of claims.

Pablo Escobosa, a senior visual and media arts major, said he didn’t know about the insurance and he doesn’t know if he is insured.

“I’m glad that [Emerson] has it,” Escobosa said, “but they should have done something better to inform us.”