Half of College-bound Families Unable to Save for Tuition Despite Seeing Value
Allianz Tuition Insurance College Confidence Index reveals 49 percent of families planning to send children to college are saving $0
A new study from tuition insurance provider Allianz Global Assistance finds that parents of prospective college students believe that college is a key to future success but have struggled to put money away to pay for it. According to the 2017 Allianz Tuition Insurance College Confidence Index, 99 percent of parents see higher education as a valuable investment. Despite this, half (49%) of prospective students and parents report they have saved nothing for tuition and other expenses.
The inaugural Allianz Tuition Insurance College Confidence Index also revealed:
- Families expect college will cost an average of $61,000, but those who have saved have set aside an average of $21,262, revealing a significant gap that will be made up with loans and other funding.
- Nearly half of students surveyed (43%) say they have thought about withdrawing from school (temporarily or permanently) and families peg the anticipated cost of an unexpected withdrawal at $11,000.
- Parents and students often aren’t aware of their school’s refund policy – half indicate no awareness of the policy and just one in eight (16 percent) strongly agree that they understand it.
“With so many families struggling to save money for college, it becomes even more important for higher education institutions to work with families on ways to protect their valuable investment,” said Joe Mason, Chief Marketing Officer for Allianz Global Assistance. “Many families will have more confidence in their ability to pay for college if they know their tuition and fees are protected from unexpected withdrawals.”
One of every 10 prospective students expect to borrow 100 percent of their college costs. To ensure tuition dollars and loans are protected, no matter their source, a survey of financial advisors found that most recommend families consider tuition insurance as a safeguard.
“For even the most prepared and supported student, college can be an unpredictable experience,” said Mason. “Many students are away from home for the first time. A covered unexpected illness, a change in life plans, or simply the inability to adjust can unexpectedly derail a student on their path to graduation, so we provide a range of plans with different benefits and levels of coverage to help families protect their investment.”
Additional survey findings reveal:
- Just 52 percent of students said they’re “very confident” they won’t permanently withdraw from college at some point;
- Nearly 8 in 10 parents (78 percent) say they’d be worried about making student loan payments if their child had to withdraw from their college program.
“Thinking about the toll withdrawal can take on a family, particularly for those struggling to save, colleges and universities can provide tuition insurance as one more tool to help students reach their academic and career goals,” said Mason.
To learn more about Allianz Tuition Insurance, visit www.AllianzTuitionInsurance.com
Methodology: These are some of the findings of an Ipsos poll conducted on behalf of Allianz in May 2017. For the survey, a sample of n=2,004 Americans (college students age 17-25: n=1,001 and parents n=1,003 were interviewed online via Ipsos’s American online panel. The precision of Ipsos online surveys is measured using a Bayesian credibility interval. In this case, with a sample of this size, the results are considered accurate to within ± 2.5 percentage points, 19 times out of 20, of what they would have been had all American college students (prospective and current) and parents been polled. The credibility interval will be larger within sub-groupings of the survey population.
Allianz Global Assistance USA
Allianz Global Assistance USA (AGA Service Company) is a leading consumer specialty insurance and assistance company. We serve 25 million customers annually and are best known for our Allianz Travel Insurance plans. In addition to travel insurance, Allianz Global Assistance USA offers tuition insurance, event ticket protection, registration protection for endurance events and unique travel assistance services such as international medical assistance and concierge services. The company also serves as an outsource provider for in-bound call center services and claims administration for property and casualty insurers and credit card companies.
Allianz Tuition Insurance protects* both in-state and out-of-state non-refundable college tuition in the event that a student withdraws from school for reasons that include illness, injury or psychological/mental disorders. One insurance plan will even provide coverage for almost any unforeseen reason that may cause a student to leave school. Tuition Insurance must be purchased prior to the first day of the semester and three different plans are available, starting at only $29.95 per term. The insurance also includes Allianz Global Assistance’s proprietary Student Life Assistance, a 24/7 service that assists families in the event of an emergency.
*-Terms, conditions, reductions, and exclusions apply. For a complete description of the coverage and specific benefit limits offered under your plan, carefully review your declarations page and insurance policy. Coverage for “unforeseeable reasons” such as “a change in life plans” or “inability to adjust” is only available on the Advantage Plan and is limited to 50% of the covered loss. All plans not available in all states. Plans are only available to U.S. residents. Insurance coverage is underwritten by Jefferson Insurance Company (NY, Administrative Office: Richmond, VA), rated “A+” (Superior) by A.M. Best Co., under Jefferson Form No. 107-P series. Allianz Global Assistance and Allianz Tuition Insurance are brands of AGA Service Company. AGA Service Company is the licensed producer and administrator of this plan and an affiliate of Jefferson Insurance Company. The insured shall not receive any special benefit or advantage because of the affiliation between AGA Service Company and Jefferson Insurance Company. Non-insurance benefits/ products are provided and serviced by AGA Service Company. Consumer may be responsible for charges incurred from outside vendors for assistance or concierge services.
Media Contact: Daniel Durazo