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
- Expect the minimum cost of attendance to at least being that of your state’s flagship university. 2018-2019 cost estimates below
- University of MD College Park – $30,789
- Frostburg State University – $20,944
- Salisbury University – $20,714
- Towson University – $24,702
- UMBC – $28,112
- 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.
- 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%.
- 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
- 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
- Avoid selling a house during the base year and while the student is in college.
- Avoid home equity loans as any unspent portion of a home equity loan is considered a cash asset on the FAFSA.