Cowan led the Terrapins in scoring last season and is a three-year starter. He withdrew his name from the draft and announced his decision to return to Maryland on Wednesday.
Maryland coach Mark Turgeon said Cowan "made a smart decision" in educating himself about the draft process, but expressed excitement about having the 6-foot point guard back with the team.
Cowan entered his name at the same time as teammate Bruno Fernando, who opted to remain in the draft and is projected to be a first-round pick.
A second-team All-Big Ten selection last season, Cowan averaged 15.6 points and 4.4 assists and helped Maryland reach the second round of the NCAA tournament.
"I'm looking forward to finishing what I started with a great group of teammates next season," Cowan said.