One of the things we've learned is that
the students that we pay tuition
insurance claims for -
over 52%, actually, increase in this
year's last data -
actually return to that same campus.
Welcome to Focus!
A podcast dedicated to the business of
higher education.
I'm your host Heather Richmond, and we
will be exploring the challenges
and opportunities facing today's higher
learning institutions.
Today I'm excited to have John Fees join
me. John is the founder of GradGuard,
a tuition protection program that
supports students through unexpected
events.
He helps me understand the growing need
for students and schools
to be protected should the unthinkable
happen, including
COVID-19. Hey John! Glad to have you on
the show today.
Thank you, Heather. It's my pleasure, I
am an avid listener and I'm really
looking forward to our conversation
today.
Well that's great. You know we've been
talking for years about the need to
protect the investment in higher
education that families make,
but this has sure become a hot topic
lately in this new world, right?
Absolutely! COVID has changed everything
as we know in our own daily lives, but also
especially in our campus work
and work with families. And I think that
we started GradGuard a decade ago with
the goal of helping schools protect the
students and families they serve from
the risks of college life.
We at the time we never expected COVID,
but as we're going to talk about
today,
COVID has really brought to light for
families and school administrators the risks that
are really facing families as they
choose to send their students to school.
And it's just great that our
partnership is really helping
schools make it easy to really
protect them.
Right, so what about, what are some of
those risks that students experience -
I'll say maybe
pre-COVID and now post-COVID?
You know, it's interesting
I'm such a huge advocate for higher
education. You know, I used to work at
Arizona State University back in the '90s.
Just absolutely so vital to
have students really focused on
completing college.
And what I did about when I 
started the company is really the focus
on - what are the things that get in the
way of graduating?
What are the things that get in the way
of student success? And the top two
reasons
are really pretty obvious either
academic readiness, or the capacity to
pay.
But really the the big third category is
other risks -
other things that life just got in the
way. Maybe a parent loses their job, a
parent becomes ill or dies,
a mental health crisis, a physical
illness,
even a fire in a campus dorm can really
disrupt a student's education.
Their backpack gets stolen, any number of
those types of risks.
And there was actually an academic study
that we kind of based our business on
out of Michigan State that really
looked at these types of
traumas. Some of them are really not
severe traumas in adults' lives,
but when you're living away from home
for the first time,
being a victim of theft, or having your
backpack stolen with all your books and
your computer, and not having the money to
repay to replace it,
having a condition of mono, or
an outbreak of a mental health condition,
or having a concussion.
All those types of things disrupt
students'
academic progress, and we really focused
on building
insurance programs that would help
schools
provide refunds to those students when
bad things happen.
And really, to really help schools
prevent
financial losses to both themselves -
so the school's not responsible
for providing a refund or replacing
stolen or damaged property -
and really just try to help schools
give students a chance to move on, and
focus back on
their academic progress.
Yeah like you
said, there's so many things that
don't get talked about, maybe? You don't
think about all the repercussions. And,
you know, thinking about COVID even, or
like you said a potential fire,
you have to really account for all
these things that happen when a
student leaves campus. So, you know, like
what happens to their belongings
if something like that happens?
That's right. Well so,
you know, I think the, for our
conversation today, one of the really
interesting things about your listeners,
and our colleagues, and our joint
customers is,
you know, student financial service
professionals, and CFOs,
and bursars - I mean they know the truth
of what's going on, right Heather? I mean,
we see them at conferences and
they're a long time
colleagues of ours, and friends. And they
know what the truth is.
They know when students are suffering
from mental health issues and leaving
school,
they know when a student can't pay for
the damage they caused in a dorm.
Because frequently their office is
responsible for either providing a
refund,
or collecting from a student that may or
may not be able to pay. And so
a lot of these risks
are actually best known, and best
discovered, I always like to say the
"truth tellers" on campus are frequently
in student financial services.
They know whether or not the admissions
office has admitted students that
can really afford to pay for that school,
or if it's some other
vulnerability that
a university may have related to
enrollment numbers. And
as we've seen with COVID, every student
and their progress, and their retention,
matters to the financial well-being of
the institution.
Absolutely.
So I think these programs that
GradGuard's created -
we're the leading provider of
insurance to college/university students
now in the country.
More than 700,000 students have been
protected through our programs.
And I think through our partnership with
TouchNet, it's just going to accelerate, I
think.
We have over 350 universities today
that rely on us, and
you have even twice that number. And
so
I think we're just gonna make it
easier than ever before for schools - at
no cost to them - to
really help protect their students.
Yeah, and part of that protection is
really - like you said before - you're
really
making sure that they can continue their
studies. And so if,
let's say they have to leave for a
medical condition, or one of these other
reasons, you're really helping them to
get back on campus. So let's talk a
little bit about that and
what's happening when they come back to
campus. Are they coming back to the
campus where they started their
education, are they switching?
Well that's great, a great point. One of
the things we've learned is that the
students that we pay tuition insurance
claims for,
over 52 percent - actually increased in
this year's last data -
actually return to that same campus. A
lot of universities don't track
what happens when a student leaves
school. Many students who don't persist, they
never withdraw officially, they just stop.
And I think what we've learned is the
students that we pay claims to
tend to return to that campus - over half
of them. And then some portion of them go
on to complete their degree at another
institution, but right now the goal is to
help those students get a do-over for
the semester
that they just lost, so they can return
to complete their degree at that
institution.
So, you know, I think the big
thing, Heather,
is such a unique time due to COVID, is
that
even before COVID, it was a real
problem for institutions.
Student withdrawals due to medical
reasons have
nationally been reported to have grown
over 70 percent in the last few years.
And that's largely due to the underlying
health conditions, and risks, and
vulnerabilities that students have
to ordinary illnesses like mono, or
pneumonia, or flu.
And now you add COVID to the mix and
it's really a
substantial number of students that
could be impacted annually.
Yeah, that's amazing that that huge
percentage, but I'm also really amazed at
really, what's really a retention story
of being able to get those students to
come
back. That's really incredible.
Well, I think, you know, the student
financial services
office is a really key partner in
helping students
succeed. I like the term student
financial success.
And they're really helping
students to protect themselves from
those unpredictable, unexpected things.
People, when they enroll in a college,
they're expecting
pretty much it to go as planned, right?
They're
going to show up to their classes, do
their best,
perform academically. Most families,
and schools, and students are
expecting that
smooth sailing, right? And the schools do
a really good job of making that happen.
What's unexpected is if a student gets
COVID and has to withdraw for medical
reasons.
If a student has a concussion, it's so
severe they can't concentrate and
continue in their academic
progress. And any number of the other
illnesses and accidents we all know
happen.
And I think that, you know, our
pursuit has been all about supporting
universities
in their mission to help students
complete their degrees,
you know? I think nationally last year -
and Heather, you know i've talked about
this -
I think last year the national
clearinghouse,
the national student clearinghouse,
produced the best data they've ever done
related to student persistence. And the
data was
finally segmented not just saying
that,
you know, only 60% of students enroll
in colleges
complete in six years, right? That's kind
of the national headline.
That's not the headline that we
really all
understand when we work with students,
and we work on campus every day.
Because we see really high success rates.
We don't see the students that don't
complete their degrees often.
And I think what the bursar's office
understands is those students that leave
school for
some unexpected reason, or those students
who don't persist,
they also frequently have an account
balance. They may owe the
institution money.
And it's really hard for that student to
get back on track without
cleaning that up, because they can't
transfer those credits without doing -
without making certain that that account
balance is paid for. And tuition
insurance
is one of the ways that, it's not
obvious but we actually
help do that. We actually pay the school
for any balance prior to remitting
the balance to the
the insured student. And so it's really
also about just giving a student the
ability to get back on track.
Both to the institution, if they owe the
school money, and also
with their own personal lives. It's
really about that unpredictable risk. Helping both
schools and families
manage through that. Because it's a
little bit unrealistic, I think, for
families right now to expect schools to
provide refunds. I mean, schools
have to operate no matter what, right?
They've got fixed costs that are
absolutely
required. In fact, their costs to
operate with COVID
have increased. They've got more expenses
to make certain the environment safe.
And so I think it's an unnatural
expectation of families to expect
refunds from schools. And
I think that- the misnomer is -
and you know I've joked about it - tuition
insurance is the worst named product ever
because
it covers more than tuition.
You know, our program covers
academic fees,
deposits, as well as housing.
And we also provide a thousand dollars
for other academic expenses, like books.
So it really does help give
a family a do-over
when they suffer a financial loss due to
their student having to withdraw.
Now, John, I know we've talked that part of
the problem in the past
has not been the students or families
were not interested in tuition
protection programs,
but it was just hard to know that such a
thing existed, and how to sign up.
Which is what led us to partnering
together.
Absolutely, Heather. I mean, I
think that
this partnership has been, just
years in the making, but really
it was kind of a perfect marriage in a
lot of ways because your
alignment with helping schools not only
operate with greater transparency
and in full compliance - whether it be PCI
compliance or other federal regs -
was really a kind of an essential
ingredient to
making it easy for schools to easily
integrate
a tuition insurance program. And so,
you know, our goal as we've been talking
over the years, was to make it as easy
for a family to purchase a protection
for thirty thousand dollars of tuition
and fees
as it is to be able to purchase a
three hundred dollar airline ticket.
And protect that from risk,
right? And so, you know, our integration
ultimately
requires no cost to the university and
it frankly
takes less than 30 minutes for a school
to turn it on. And a school like
Auburn,
who we've been working with for seven
or eight years,
you know, as a result of our
integration, we've seen a tenfold
increase in participation.
Wow!
And so when it's easy, we know the
product is so affordable that families
are gonna say, "yes," right?
Through our integration, it's the lowest
cost possible for families to protect
themselves. It's $106
for ten thousand dollars of coverage, and
at that price we
we can't advertise it. We're not Geico.
The only way to really
think of our partnership is really a
student benefit.
That when it's turned on, we know it will
transfer the risk to an insurance
company who's willing to take it.
So that families and schools really
are in a position where they're not at
at risk of
having to lose their investment. And I think it's
just, it's gonna be really promising. And
the conversation we're having today,
though, is
is so much bigger than, you know,
protecting students. It's really about
doing it in a way that helps educate
families.
In a way that helps universities fully
disclose their policies. Today I think
with COVID,
we see so many families, you know, really
concerned about their investment, but
also skeptical about
whether or not their school really sincerely cares about
them.
And I think this is an easy no-cost
way for schools to demonstrate that they
do care,
and really help families have confidence
that they've chosen a good school that
will
protect them in case something
unexpected happens to their students.
Yeah I really like the way that you said
that being a student benefit. Again,
probably
don't think of it in that way, but it
but it absolutely is. It's like again,
it's helping to alleviate any risks that
I may have and have to worry about
what's coming.
Especially now in this post-COVID world
that
you don't know what's possible, or what's
next.
Yeah, you know, I think the
other great thing is, about our
partnership, is that the reason
GraGuard is the only one that can provide
coverage for COVID currently,
is that we work with schools in almost
every state in the country, just like
TouchNet.
And that the traditional way
tuition insurance was created, it was
by school. We created a national program
that spreads the risk across the country.
So we don't have the concentration of
risk of
if there's an outbreak of COVID in
Boston or New York,
that is going to overwhelm the program
with losses.
We've got students from Iowa, to Purdue,
to Oklahoma,
to the whole country. And that spread of
risk is what gives Alliance, our
underwriter,
the confidence that we're able to pay
claims during this
pandemic. Traditionally, insurance
companies always exclude pandemics and,
in fact,
our policy language does still do that.
The difference is, we've agreed to
pay for claims
during this COVID crisis. When
students
do get sick and diagnosed with COVID and
have to withdraw from school.
It's just really a testament to
the way insurance works best is, when
more schools
do the same thing, the better spread of
risk, and then the more affordable it
becomes for everybody. We're really all
in this together as universities
and as a higher education community. We
just need to start thinking of it that
way.
Many of the investments of your
technology, you know, no one school could
afford the type of technology you guys
have built.
You get to spread it across all of your
schools, so that they have access to, kind
of,
the most advanced payment technologies
today. And that's not something they
could easily do on their own.
Yeah I think that's great. And being able
to have that national program. And a
couple things that you said, I just want
to make sure that
our listeners heard that - that you are
covering
COVID-19. That is so amazing and really
is a testament to how
this is different than any other
insurance program.
This is tailored for higher education
and you understood the need for that.
Yeah, I appreciate you highlighting it.
It's widely being discussed. And how
do we get to do this? And I would
say
first of all, Alliance has been a
partner of ours for
several years. We've already
been working with and ensuring hundreds
of thousands of
families. And I think it's that track
record that gives us confidence. But I
will tell you
that it's only because we work with
universities
that it makes it possible. And it's only
because we've had success
with your integration and others that
give
the insurance company the confidence
that we're spreading the risk adequately.
If we just put this up on the internet
and invited everybody to buy it,
not only would we have every selection,
but it would actually probably
kill the program. Only the
people that needed it would buy it,
and the truth is everybody has a
need, we just don't know
which student is going to become
seriously ill with
mono, or seriously ill with COVID,
or suffer a mental health crisis, or
become an addict.
I think that's the important pieces.
You know,
I'm not an insurance guy - you know that,
Heather. I've spent my life
working with colleges and universities. I
view these
university partners as colleagues and
friends.
You know, what we went to is we were
trying to find a way to transfer the
risk from families and schools,
to a willing insurance company. And it
required a lot of cooperation with
companies like TouchNet, but also schools
that would share their loss data, and
share
their experience. And really, this program
is a result of
a decade of work of trying to build
something that really
works for everybody. And I'll tell you a
lot of times when I do tv interviews,
the issue is, "Well, I'm skeptical. I don't
trust insurance companies." And I would
say, "I agree."
But when you work with 350 universities
there can be no gotchas.
This program has to work exactly as
advertised.
And whether it be Harvard, or NYU, or
Auburn, or Oklahoma State, or
Purdue - whatever school it might be, we
know we're
representing them, and working to make
them look good
as they serve their students. And our
partnership makes that
even more possible. And frankly, the
good thing is we don't consider this
marketing.
We really view this as as an enrollment
process
that we integrate into the billing
process, to help schools protect their
students.
Yeah, like you said, you have to make it
easy. And so it really sounds like the
biggest challenge
is all about awareness and just knowing
A) for the schools that this kind of
program
is available, and B) for the students and
families to understand that this kind of
protection is available. Which is why it
was so important
for us to integrate that into the
billing cycle.
That's right. I think the
billing cycle is key. I think
the other part of it is that COVID has
basically brought a lot of attention, And
there are actually
a lot of lawsuits - class action lawsuits -
that have come on
the scene this year due to how
schools
managed the refunds, and the change
in the quality,
or the forum, of education. I do want to
point out that
this is not business interruption
insurance. GradGuard's tuition insurance
provides
a payment and a refund when a student
leaves
for medical reasons. It's not for
a change in venue, it's not for closing
the campus.
And although we'd like to be able to
find a way to do that in the future,
that's not what our
plan currently does. The important
part, though, is that families,
I think, are are investing in college
this year more than ever,
with kind of a "buyer beware" attitude.
They're worried about what's going to
happen
because of COVID and, you know, the
the truth is,
I think our integration makes it very
easy for schools to
record that they've disclosed the refund
policy to their students.
They have an electronic button where
they've acknowledged the policy, the
refund policy.
And I think if you don't have that as an
institution, it's really hard to deal
with an upset parent
that says, "Well you didn't tell me the
terms and conditions. You didn't,
you know, show it to me." And what your
technology does is it records it,
and you have an actual date
when that student, or family, or financial
sponsor
acknowledged the refund policy, and then
also accepted or declined
coverage. And so I think being able to
back that up with proof, instead of
saying, "Well it was on the website," or "It's
in the course catalog,"
is so much more powerful for schools 
in an era, I think, where frankly
consumers are
expecting these types of
disclosures. 
Yeah, I think that's
really key. And then
also just kind of going back of you're
really looking to protect the student
campus-wide, so,
beyond tuition, but also you mentioned
housing and these other fees. So
you're really looking for that holistic,
campus-wide protection program.
Yeah, you're so good to bring it up. I
think that
my son, who's a senior at Arizona State,
he
is on a tuition waiver. He's on
scholarship. I'm really happy for him, but
I still have to pay for almost 3,000 of
academic fees
and ten thousand dollars of on-campus
housing expenses.
So I bought thirteen thousand
dollars of tuition insurance last year. I
can buy exactly what
he needs, in case something
happens to him.
This year, he moved off campus. His
housing expenses actually
are up a little bit more. I can buy
coverage that covers his off-campus
housing as well. So if he get sick and
has to
drop out or leave due to medical
reasons,
we're going to be fine. And I
think every student should have that
opportunity, and every family should be
aware that
there's a way to protect yourself when
something bad happens.
You know, I think that we're, you know
our partnership is going to change the
landscape.
And I think that families will be more
informed,
schools will be better protected, and
I think
the real success will be seen in the
claims we pay, and
the the testimonials we get from
families. Really,
you have to, I think families, when you
have a student in crisis due to a health
reason, or any number of things,
you're so focused on the well-being of
your child that you're not
thinking immediately about the financial
loss, or the financial consequences.
And really, when you're insured with
GradGuard,
you also have that kind of peace of mind,
but most of all confidence that you can
worry about that later,
and really focus on the well-being of
your student. And the testimonials we
have from our customers
show that. And it's just great.
It makes me feel good about what we're
doing is the right thing.
Yeah I mean, really the key is fulfilling
your mission of helping students
finish their education regardless of what
happens.
Yes.
Yeah and you know, I think for student
financial services professionals,
this connects the dots for them within
either
the enrollment management office and how
they fit in with admissions. This is, today
the Birmingham news station featured
both Alabama and Auburn
as being the only schools in the
state that offer
tuition insurance that provides
coverage for COVID. That's a big deal.
And it's a benefit for students
that chose to enroll there
versus a school that may not offer it.
And I think that
the enrollment management side of the
house - from both admissions
and the provost's office even -
are gonna be paying attention, more than
ever, about those students that either
persist or don't persist.
And I think it's a win-win-win for
everyone that touches us. And frequently,
I think, one of the only reasons why
schools haven't done this in the past
is that it kind of fell between
the cracks.
When you mention the word insurance,
sometimes they want to get the risk
management office involved, right? And the
insurance office.
So the bursar doesn't want to deal with
it, so it goes to the risk
office. The risk office is more worried
about
HR benefits, and research,
you know, activities, and other
problems on campus, than they are about
tuition insurance or the needs of
students, right? They're kind
of disconnected from that.
And then if you go to the admissions
office or the enrollment office, they say,
well we're not really interested in,
you know, these students that are
not persisting, we're focused on
recruiting new students,
and we don't really want to bring
attention to the fact that some students
might
actually not complete their degrees, or
or something like that
might happen. I mean, the truth is
our joint customers in the
student financial services office, they
understand the truth
and they are the perfect person to
convene
that discussion and say let's turn this
feature on.
It's not about marketing, it's about
providing a benefit that everybody wins
from.
And if we do it, I guarantee for the
schools that work with us,
they will see high levels of
participation and claims
getting paid. It just, it works for
everyone.
Yeah, that is so great. John, thank you for
all your insight and really helping all
of us understand the difference of
insurance
and protection programs.
Yeah thanks. It's
perfect, Heather.
You know I think this type of
conversation is useful for
all of the audience.
But specifically, I think one of the
things about refund policies that
we haven't touched on, in your one of
your last podcasts with NACUBO.
Brian was really great because what
we're all living with is the federal
rules about the return on federal
financial aid dollars.
And most refund policies of schools have
not been
reviewed recently, but they're typically
prorated to
the fifth week of school. And that's a
fair
return of aid, but it's also what the
department of ED requires.
There are some discussions currently
going on about
requiring that to be even more
restrictive for schools. And if that
changes the need for tuition insurance
is only going to grow.
Because the the capacity for schools to
provide a refund when,
frankly, an insurance company can do it,
is much more appealing than
than trying to find money in a tight
budget
year within these schools. 
It is, and
again, like you said earlier, too, there's
more to this than just saying the
insurance - the program - it's
understanding the refund policy for each
school making, sure that's clear and
available,
and then offering a solution. like a
protection
program. that they can enroll in.
Absolutely, absolutely I think the
other element is that insurance
companies don't often work with
universities directly.
And, you know, GradGuard works with Alliance
to deliver this program, but the the
reality is
working with schools is uh kind of
special
talent. And I think that that
means
that you know our experience within
the TouchNet world is both PCI compliant,
it's ADA compliant, it respects
privacy and FERPA
issues, and not many insurance
companies even understand that.
And so we're, our role as GradGuard,
we're not an insurance broker, we're
what's called a program manager. And
what that means is we manage the entire
customer experience to make certain that
it reflects well on our university
partners, but that it also
does it in the way that our partners
expect. And that means
all the things that TouchNet does so
well, which is to make certain that we
respect the privacy of of their
users, and that we deliver, you know,
a fully-accessible, secure environment
for their students to enroll in these
services.
And I tell you what, it's a great
and unique
partnership we've created here because
it makes it
so easy for schools to just turn this
feature on. Because now it's just a
feature of
what TouchNet delivers.
It sure is. Well,
thanks so much,
John, for all your insights today on
programs that are tailored for higher
education.
Thanks for tuning in to this episode of
Focus!
Don't forget to subscribe, so you can
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higher education.
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