In November of 2021, the University of Mississippi (“Ole Miss”) became the first institution to distribute a check to one of its current athletes. Specifically, Senior long jumper Allen Gordon received a $2,990 check for academic achievements. Id. This check appears to be the first such payment following the Supreme Court’s ruling in Alston v. NCAA, which granted institutions the right to provide athletes additional financial support for academic-related benefits up to $5,980 per year. Id.
Gordon was able to receive the payment because he was academically eligible, according to Ole Miss. Id. Further, at that time, Ole Miss planned to implement this payment plan for all athletes who met the academic requirement of the prior semester and who were on an active roster. Id. Ole Miss has planned to spend $2.48 million a year in additional payments for about 415 athletes. Id.
Since Ole Miss became the first institution to provide their athletes academic-related checks, only 23 of the 130 FBS-Level schools have indicated that they have plans to provide academic bonus payments to athletes for this academic year. (Baylor joined on April 12, 2022). In early April of 2022, ABC News contacted the 130 FBS-Level institutions to determine whether they had any plans to implement academic-related bonusses for their athletes. Id. Below are the results from the 101 institutions that responded to their survey. Id.
- Twenty-two (22) schools said they have plans in place to reward their athletes with payments for good grades this semester.
- Thirty-four (34) said they have not yet decided if or when they will start to pay academic bonuses.
- Twenty (20) said they will not make bonus payments this year, but plan to make them in the future.
- Fifteen (15) said they have no plans to pay academic bonuses.
- Ten (10) responded to public records requests by saying they have no relevant documents of a plan to share, or by providing documents that disclosed no information about an existing plan to make academic bonus payments. Id.
As the competitive market begins to take shape, athletes seeking opportunities will look at whether or not a school pays out academic-related benefits to help determine where they want to play. In addition, students will also inquire as to what the standard may be to achieve “eligibility” for these benefits. Nonetheless, with institutions attempting to interpret Alston, two areas will be immediately impacted: Student Financial Aid and Recruiting.
Impact on Federal Financial Aid
The cap for academic benefit bonusses of $5,980 per year was calculated during the legal proceeding in Alston. The amount is equal to the maximum amount of financial value an athlete can receive in one year from awards related to their athletic performance for example, winning conference player of the year titles or the Heisman Trophy. Id.
While the maximum figure may have been calculated based on the financial results of elite athletic performance, the fact that college athletes can earn compensation from their institutions for academic performance will likely impact all financial aid.
Under the rules set by the U.S. Department of Education, any student who receives Federal Student Aid (“FSA”) may not receive need-based aid in an amount that exceeds their calculated need. Further, the student’s total financial aid package plus other Estimated Financial Assistance (“EFA”) must not exceed the student’s total Cost of Attendance. Id. Where student’s aid package exceeds the student’s need of cost of attendance, the institution must attempt to eliminate the overage by reducing other aid that the school controls: i.e., athletic scholarship. Id.
Whether these academic bonuses will be counted as EFA to calculate a student’s FSA is unclear. If they are considered EFA, then they likely may cause a reduction in the athlete’s aid package. This reduction would make school more expensive for the student if the student chooses not to apply for the earned money back to pay for tuition. Id. Further, institutions have incentives to reduce an athlete’s aid because schools that fail to reduce a student’s FSA in reaction to these benefits risk liabilities for over-rewarding their students as calculated by the U.S. Department of Education. Id.
After the Alston decision in June of 2021, the Atlantic Coast Conference sought guidance in interpreting this potential conundrum. Id. According to the guidance they received: “[a]ny source of assistance a student receives as the result of his or her status as a student is considered estimated financial assistance[.]”
Further, the National Association of Student Financial Aid Administrators (“NASFAA”) has previously provided advice on how financial aid offices should treat any education-related benefits:
“[F]or college athletes whose only source of [FSA] was from Pell Grants, institutional athletic aid did not need to be reduced in circumstances where the total assistance exceeded the cost of attendance.”
Generally, institutions have not been required to reduce aid for students entitled to federal Pell grants. Nonetheless, college athletes receiving checks for academic performance is new. Therefore, the issue now is whether or not schools must reduce aid for college athletes whose total aid awards exceed their cost of attendance because they received academic-related bonuses. Id.
Although just 1/3 of FBS-Level athletic departments have begun paying their athletes academic benefits, more will likely follow across all levels. Following suit will primarily be due to the pressures of recruiting. Programs that “offer” academic-related checks will be at an inherent advantage in recruiting when competing against those who do not. Similarly, programs that “offer” lenient academic qualifying standards will be further advantaged. Therefore, programs at institutions that offer neither will look at their athletic departments and ask: “what can we do?”
Only time will tell how institutions will interpret this ability, but that time will assuredly be expedited due to the pressures in recruiting. The drive to stay competitively relevant will force the hand of many institutions across all divisions to determine whether or not they can or will implement a plan to pay their athletes for academic-related benefits. As a result, many institutions will demonstrate how far they are willing to invest in their respective athletic programs.
The significance of Alston continues to make ripple effects across the college landscape. The era of amateurism is over, and the era of player compensation is clearly upon us. With most college athletes not receiving full-ride scholarships, many college athletes will likely pressure their respective institutions to implement some education-related benefit system. For institutions without revenue-generating sports, this reality appears unlikely. Many institutions, especially those at the FCS level, DII, and DIII, will likely withhold from implementing it simply because they cannot generate enough to reasonably fund this type of system. Ultimately, if educational benefit checks remain, the divide between the elite athletic institutions and the rest of the college landscape will continue to grow farther apart.
President of the Buffalo Sports and Entertainment Law Society. Before law school, I coached college football at the University of Rochester for five seasons. I am excited to take these experiences, along with a legal education to make an impact on the ever-evolving landscape of college athletics. Thanks for reading our posts!