Brown will become the 36th American college offering medical insurance coverage for what's called "transition-related medical expenses" for men who want to physically become women, or women who want to physically become men.
"There is a growing number of colleges and universities that have recognized the underlying medical condition, which is gender dysphoria, a rare but serious condition that requires treatment up to and including gender reassignment surgery," said Jennifer Levi, a spokeswoman with the Transgender Law and Policy Institute (TLPI), a non-profit advocacy organization for transgender people.
"Many people with gender dysphoria take cross-gender hormones to alter their physical appearance and for some people that's sufficient but for others it's not, and they may require more extensive treatment like genital surgery, facial feminizing surgery, and other treatment options," Levi told RIA Novosti.
Brown's new student insurance policy goes into effect Aug 15.
"Brown is committed to supporting the full range and diverse needs of all our students," Brown University said in a statement.
Other colleges that offer sex-change surgery insurance benefits are among the nation's most elite schools, including Carnegie Mellon, Cornell, Harvard, Emory and Stanford Universities. Another 25 schools cover hormone therapy but not surgery.
The trend mirrors a growing level of acceptance for gay and transgender people in America. A 2012 Gallup Poll found 54 percent of American adults consider gay and lesbian relations to be "acceptable", up from 38 percent in 2002.
The greater societal acceptance is driving the movement for change on college campuses, said Levi.
"Colleges and universities that are at the forefront of providing the services their students need, in the past they haven't had students who've come forward and said, 'hey, this isn't fair', or 'hey, this is something I really need', but now those students are coming forward," she said.
Another factor behind the trend can be traced to the medical community.
The American Medical Association and the American Psychiatric Association both now say they consider gender reassignment procedures as medically necessary when prescribed by a physician and support their inclusion in health insurance coverage.
"There is a sense in the medical community that gender dysporia is a serious medical condition, and without these surgeries we can predict that many young people will have serious mental health issues up to and including suicide," Levi said.
"It's debilitating, and it's important that the medical community recognizes that without proper medical treatment, these individuals won't be able to engage in daily activities."