Sallie Mae, Tuition Reimbursement Insurance, and Mental Health Parity

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Sallie Mae has recently added tuition-refund insurance to its spectrum of financial offerings, according to the July 22 edition of the New York Times. This can refund tuition that has already been paid when a student withdraws from classes due to illness. There is a catch, however: although the coverage will pay for 100 percent when leaving school is due to physical reasons, only 75 percent is refunded when mental illness is the cause. Because the coverage is not deemed health insurance, it does not run afoul of mental-health parity laws. For $599, one can obtain coverage for up to $50,000 in tuition reimbursement.

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