Tune in, drop out, cash the cheque

Students. They sleep late, take drugs, get drunk. Now you insure against it, explains Paul Slade

ONE IN four of today's new students may be forced to quit their courses early because of increased financial pressure, the National Union of Students has warned.

An NUS spokesman says: "The dropout rate was 14 per cent in 1983/84. By 1993/94, it was 18 per cent. We're currently running at 19 per cent, and we've had some leaked figures through this summer which suggest it could be anything between 21 and 25 per cent. Financial hardship is the over-riding cause."

With tuition fees of pounds 1,025 a year, annual rent averaging pounds 3,000 and student loans of more than pounds 3,000 a year, the liabilities left hanging over such students can be tough to meet.

"There have been reports of some universities being particularly insensitive and inflexible in the pursuit of tuition fees," the NUS spokesman adds. "The University of Central England's vice chancellor said he was prepared to pursue students through the small claims courts."

Brian Wright, managing director of Saxon Insurance, says some universities are employing debt recovery agencies to chase students over accommodation charges.

Saxon has launched a specialist insurance plan protecting students and their parents against the costs of quitting college early. Uni-Shield covers tuition fees, rent and student loans for a monthly premium of about pounds 17 (see table above).

Claims already paid out by Saxon include one from a first-year student who missed eight weeks of her early studies through appendicitis and glandular fever and so was forced to quit her course. Another claimant could not cope with university life because of his dyslexia.

Uni-Shield's underwriters make no exclusions for alcohol or drug abuse, exam failure, pregnancy or a custodial prison sentence. Even students who escape these perils are not in the clear. Government figures suggest that students starting a three-year course in 1999 will have built up debts of about pounds 10,000 by the time they graduate.

Tuition fees increase pressure on parents. A Barclays Bank survey found they boosted their total funding contribution to pounds 522m in 1999, up almost 19 per cent on the previous year.

A new element in Uni-Shield is a credit insurance policy to replace the income lost if parents funding a student cannot work through accident, sickness or redundancy. Parents can buy death benefits of up to pounds 10,000, accident and sickness benefits of up to pounds 7,200 and unemployment or redundancy cover of up to pounds 3,600 for a monthly premium of about pounds 22.50.

HOW MUCH DOES IT COST TO INSURE AGAINST

STUDENT ALCOHOLISM OR DRUG ABUSE?

Single Item(s) Sum you

premium covered could claim

Fee Shield pounds 173.25 Tuition fees No maximum.

and rent, typically Tuition fees are

around pounds 3,000 pa standard pounds 1,025 pa

Loan Shield pounds 252.00 Student loan No maximum. Typical

loan is between

pounds 2,000 and pounds 3,000 pa

Parent Shield pounds 567.00 Loss of income Up to pounds 10,000 on death.

Up to pounds 7,200 for accident or sickness. Up to pounds 3,600 for unemployment or

redundancy

All premiums include insurance premium tax at 5 per cent. Assumes three- year course. Monthly payment options also available. Source: Saxon Insurance.