Today we will be looking at a Studious Solutions coverage example. In yesterday’s post, I gave pricing examples for a 3rd grader in order to compare them to a 529 plan. As a follow up, I will now show you how our coverage maximums work with those same 3rd grade plans as our example.
6-Year Maximum Coverage Plan
The chart above is cropped directly from our premiums and coverages page for December 2023. It shows the coverage schedule for the $60.36/month plan we covered yesterday, with the coverage amount of $53,834.15.
That maximum coverage is available to pay a student’s loans if they drop out during their 12th semester of college. If they drop out during a different semester, they will be subject to a different coverage amount. For example, this student would get a coverage amount of $43,083.53 if they dropped out of college in their sixth semester. We calculate these coverage amounts using a combination of current tuition, average student debt, and the growth rate of tuition.
6-Year Recommended Coverage Plan
We used our maximum coverage plan to compare to 529 plans yesterday, but I also mentioned that our recommended plan for this student would be $32.85/month with less total coverage. You can see the schedule for this coverage in the image above.
Note that coverage in both this chart and the one above it do not extend beyond the 12th semester! What if your child is in their sixth year and has not completed their degree program? It may be time to sit down and figure out if they will finish or if they need to drop out sooner rather than later.
1-Year Recommended Coverage Plan
Finally, we have our recommended 1-year plan. This plan only covers the first two semesters, but it also costs substantially less at $15.63 a month. You may notice that it has better coverage in those two semesters than our recommended 6-year plan. We expect families who need to budget with the 1-year plan will also need to take on more student loans in the future, so we suggest this improved coverage.
The first year of college is the likeliest time for a student to drop out. With an 82% persistence rate and 64% of students completing their degree withing six years, we calculate that approximately half of drop outs do it within the first year. With a Studious policy, you can also evaluate how your child is doing in school during that first year and try to make an informed decision of whether or not to drop out and have us pay for student loans.
Hopefully this was a useful Studious Solutions coverage example for you!
Knowing how this coverage works, you can contact an agent today. Your agent will follow up with you and include a chart similar to the ones above when they email you.