• CPC Team

Sophomores and Financial Aid: What you need to know this academic year

Sophomore year may seem a bit early to be planning for funding college, however, understanding your financial aid picture early can save you down the road.

Step 1 – Review financial aid strategies to include the following

  1. Expect the minimum cost of attendance to be at least that of your state’s flagship university.  2018-2019 cost estimates below

  2. University of MD College Park – $30,789

  3. Frostburg State University – $20,944

  4. Salisbury University – $20,714

  5. Towson University – $24,702

  6. UMBC – $28,112

  7. Consider a private college – Private colleges that provide generous merit or need-based giving, plus graduate the majority of students in 4 years, can be less expensive than the state university system.  Read more here.

Step 2 – Sophomore parents need to know that students’ college financial aid awards will be calculated on the base year that starts January 1 of the student’s sophomore year.

  1. Move assets out of your student’s name.  FAFSA assesses money in the student’s name at 20% while parent’s assets are assessed only a 5.65%.

  2. Inform relatives of the best way to help contribute. If a 529 plan has been created to help pay for a grandchild’s education, grandparents should consider waiting until after January 1 of the student’s year to make any withdrawals and avoid the dispersion as counting towards income that will reduce financial aid eligibility.

  3. Consider with whom the student of divorced parents lives – Students whose parents are divorced should research further if living with the parent that will increase their financial aid eligibility, makes sense.

  4. Avoid selling a house during the base year and while the student is in college.

  5. Avoid home equity loans as any unspent portion of a home equity loan is considered a cash asset on the FAFSA.

#affordingcollege #financialaid #financialplanning

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