From Sticker Shock to Staying Power: Empowering Students Through Cost Clarity and Protection

By: John Fees

College affordability has been a concern for decades, but a new finding from a Student Voice survey by Inside Higher Ed and Generation Lab underscores how deep the problem really runs: Only 27 percent of students say they have a clear understanding of the full cost of attendance. 

That means nearly three-quarters of students begin or continue their studies without entirely grasping what their education will cost beyond tuition and fees. Even as tuition, housing, and everyday expenses are higher than ever, college families are financially stretched, and students lack a clear understanding of what they’re actually paying for. 

The Cost Knowledge Gap

Students who lack a full understanding of their costs are also the ones most at risk of withdrawing. When asked about their grasp of the total cost of attending college, including tuition, housing, books, transportation, and food, just over a quarter of students report that they can budget appropriately. 

Additionally, 21 percent of students who say they have seriously considered stopping out say they fully understand the costs. This aligns with findings from the 2025 State of Higher Education Report by Gallup and The Lumina Foundation, that nearly one in three students have considered withdrawing from their degree program, with cost being one of the top factors. 

Inside Higher Ed’s Student Voice Survey also finds that 50 percent of students are more stressed about finances than they are about academics, as they balance school work with personal, family, or financial responsibilities, including work. 

Rising Costs, Rising Risks

The price of college continues to climb faster than inflation, and the burden increasingly extends beyond tuition. Housing, course materials, and everyday expenses are higher than ever, leaving students financially stretched. Even small, unexpected costs, in some cases as little as $100, could put a student’s enrollment at risk, according to the Student Voice survey. Unexpected events and expenses happen more often than you might think. Annual Clery Act Reports reveal an average of over 25,000 crime and safety incidents reported annually on college campuses since 2009, leaving student property vulnerable to burglary or theft. Additionally, an average of 2,000 fires occur in on-campus student housing facilities each year.

With roughly one in five students each saying a $500 to $1,000 surprise expense would challenge their ability to stay enrolled, institutions are prudent to implement a program like GradGuard’s Renters Insurance Program, which can cover the cost of stolen or damaged student property, such as a bike, laptop, clothing, and other personal belongings. 

Plus, if a student were to need to withdraw unexpectedly, their family could lose thousands of dollars in tuition, housing, and fees, which could seriously impact their ability to return to school. 

Most schools provide a pro-rated refund through the first weeks of school, and virtually none provide refunds for academic fees or student housing.  GradGuard’s Tuition Insurance can provide up to 100% reimbursement for tuition, housing, and fees for a covered serious illness, injury, mental health condition, or other covered reason, enabling students to return to school when they are well.

With National Clearinghouse data reporting 113,000 students who left school in 2021 for legitimate reasons, including health reasons, the loss is real and estimated to be more than $2 billion. These financial losses affect institutions' tuition revenue and threaten retention.  

Financial Literacy as a Retention Strategy

When students and their families don’t know what to expect or what’s at stake financially, they can’t plan effectively for challenges that may arise. Providing transparency around refund and withdrawal policies, along with offering families an active choice to protect their investment with programs like GradGuard Tuition Insurance or GradGuard Renters Insurance, is smart and promotes student success. When families can plan for costs associated with attending college and understand the risks, they’re more likely to persist and graduate. 

Tuition insurance can protect students and families from the financial impact of an unexpected withdrawal due to a covered reason. Instead of losing the entire term’s tuition, housing, and fees, families can recover these costs, giving them the flexibility to focus on recovery and plan for the student’s return. 

For students, that means the opportunity to get back on track academically, rather than ending up with some college and no degree, which the National Student Clearinghouse estimates to be 11 percent of the population in the U.S. today. For institutions, it means fewer appeals for refunds, a clearer process for families, and a stronger reputation for student-centered care. 

College renters insurance can cover students’ personal property against theft, fire, and other covered incidents, and can provide up to $300,000 in liability coverage for damages caused to school property. Institutions see reduced adversarial collection issues associated with damage residents cause to student housing, and promoting financial literacy by disclosing the limits of liability. 

Offering tuition and renters insurance to students sends a powerful message to families that the institution understands college is a significant investment and is committed to helping families protect it.

Final Thoughts

With college costs as high as they are, minimizing confusion and promoting transparency are even more important for institutions to foster student success. GradGuard partners with nearly 700 institutions nationwide to help families prepare for what would otherwise be financial setbacks. By helping students understand, plan, and protect their investment, institutions can strengthen trust and persistence, promoting overall student success.