Introduction
The question of whether college athletes should receive financial compensation beyond scholarships has changed substantially because the regulatory system no longer follows the older model of strict amateurism. By the 2025–2026 academic year, Division I compensation could include athletic scholarships, education-related benefits, third-party name, image, and likeness income, and direct institutional financial benefits under the framework created by the House settlement. Participating schools were permitted to provide direct athlete benefits under an annual cap based on a percentage of specified athletic revenue, with an initial year-one figure of approximately $20.5 million per institution. The debate has therefore moved beyond a simple choice between unpaid participation and scholarships. The more difficult issue is how financial benefits should be structured transparently and fairly while preserving academic opportunity, health protections, gender equity, nonrevenue sports, and realistic differences among institutions. Athletes create substantial value through training, competition, publicity, and institutional identity, but compensation policy must also recognize that commercial revenue, resources, and legal obligations vary greatly across sports, divisions, and campuses.
From Amateurism to the Current Compensation Framework
For much of modern college athletics, NCAA rules restricted compensation beyond approved educational benefits and defended amateurism as a defining difference between college and professional sport. Critics argued that universities, conferences, coaches, broadcasters, sponsors, and vendors could earn significant revenue while the athletes whose performances created the product faced limits on their own economic opportunities (Sanderson & Siegfried, 2015; Staurowsky, 1998). That framework changed gradually through litigation and policy. Cost-of-attendance support expanded, the Supreme Court’s decision in NCAA v. Alston upheld limits on NCAA restrictions involving certain education-related benefits, and broad NIL opportunities opened in 2021. The House settlement marked another major transition by allowing participating Division I institutions to provide direct financial benefits to athletes subject to an annual benefits cap and by establishing new roster and NIL oversight structures. These developments mean that “paying athletes” is no longer a single policy category. Scholarships, education-related benefits, direct institutional payments, NIL contracts, collective licensing, and possible employment wages have different purposes, rules, tax consequences, and legal implications.
The settlement framework also changed scholarship and roster policy. Participating schools moved from older sport-specific scholarship limits toward roster limits while receiving greater flexibility to provide scholarships across the roster. Direct benefits are governed through an annual July-to-June benefits period and a cap linked to defined athletic revenue. This structure creates real allocation decisions for athletic departments. A university may choose to concentrate a large share of direct benefits in football or basketball, distribute a common amount more broadly, combine base participation benefits with sport-specific allocations, or use another transparent formula consistent with law and institutional policy. The system also interacts with NIL because athletes can continue to enter legitimate third-party commercial agreements. These categories should not be blurred. A scholarship offsets educational costs, a direct institutional payment recognizes participation or value under the settlement framework, and an NIL contract pays for commercial use of an athlete’s identity. Clear terminology is necessary before fairness can be evaluated.
The Case for Financial Recognition
College athletes contribute time, skill, physical risk, publicity, and institutional identity. In major programs, their performances support ticket sales, media rights, sponsorships, licensing, donations, and broader university visibility, although the level of direct revenue differs sharply among schools and sports. Training, competition, meetings, travel, rehabilitation, film study, and promotional obligations can occupy a substantial portion of the week and can reduce opportunities for ordinary campus employment. Scholarships are valuable and should not be minimized because they can cover tuition, housing, meals, books, academic services, coaching, medical support, and other resources. Yet scholarship value does not answer the separate question of whether athletes should receive additional financial benefits when their participation contributes to commercially significant programs. Some athletes also receive partial scholarships or no athletic aid at all, making the simple phrase “they are already paid with tuition” an incomplete description of the population.
Financial recognition can also address opportunity costs that scholarships do not cover. Athletes may need transportation home, emergency savings, family support, professional services, clothing, taxes, or other expenses that do not fit traditional educational aid. Direct benefits can reduce pressure to seek outside employment during demanding seasons, although compensation alone cannot protect academic opportunity. Universities still need to ensure that practice and travel schedules do not systematically restrict laboratories, internships, required courses, study abroad, or degree choice. Athletes should have genuine access to academic advising and degree completion rather than being steered into easier schedules merely to protect eligibility. Likewise, compensation must not be treated as payment for accepting unsafe conditions. Athletes require independent medical judgment, concussion and injury protocols, mental-health care, insurance, and reasonable post-eligibility support. A strong compensation system therefore recognizes economic contribution while preserving education and health as substantive rights rather than marketing claims.
Equity, Title IX, and Nonrevenue Sports
The most difficult allocation questions involve gender equity and sports that produce little direct revenue. Football and men’s basketball generate large media and ticket income at many Division I institutions, but commercial revenue is not the only value a university athletics program is designed to create. Women’s sports and Olympic or nonrevenue sports may have received historically unequal investment, promotion, scheduling, and media exposure, which can suppress the revenue later used to justify further unequal treatment. Direct institutional compensation therefore requires careful legal and equity review rather than a simple assumption that current revenue alone determines what distribution is permissible or fair. Title IX governs multiple dimensions of sex equity in education and athletics, and the interaction between direct revenue sharing and existing obligations continues to require institution-specific legal analysis. Schools should establish written allocation principles, monitor their effects, and avoid financing new payments by disproportionately cutting women’s opportunities or other protected educational benefits.
Nonrevenue sports also contribute to institutional identity, broad participation, and national or Olympic development. Swimming, wrestling, gymnastics, track and field, volleyball, rowing, tennis, and many other programs can be financially vulnerable when athletic departments redirect resources toward direct athlete payments. The settlement’s roster-limit system can further affect participation opportunities. A compensation model that treats lower-revenue athletes as economically irrelevant risks narrowing college sport into only the most profitable entertainment products. Institutions may need donor support, conference revenue sharing, staged budgeting, or common participation benefits to preserve a diverse athletic program. Divisions II and III also operate under different financial structures and cannot simply imitate the wealthiest Division I conferences. Baseline protections for health, academics, truthful recruiting, due process, and informed financial terms should apply even when direct payment levels differ. Fairness does not require every institution or every athlete to receive the same amount, but it does require that differences be justified transparently rather than produced through hidden discretion.
Designing a Transparent Compensation Model
A defensible compensation system should distinguish shared participation from individual commercial value. One possible model would preserve scholarships and academic guarantees, provide a common base participation benefit where direct-payment resources exist, and allocate an additional portion according to transparent revenue, licensing, or team criteria. Third-party NIL opportunities would remain separate and available to athletes whose personal market value supports additional endorsements. Collective licensing can also compensate athletes when video games, broadcasts, trading cards, or merchandise depend on entire teams rather than one star. The exact percentages are less important than the principles behind them: written formulas, disclosure, gender-equity review, clear treatment of walk-ons and partial-scholarship athletes, defined rules for injury and transfer, and appeal procedures outside the coach’s unilateral control. Performance bonuses based on playing time or statistics can create pressure and favoritism, while wholly discretionary payments can make athletes dependent on personal relationships with coaches. Objective categories reduce these risks.
Scholarship recipients should not automatically be excluded from direct benefits because scholarships and direct payments serve different purposes. A scholarship supports education and enrollment; additional benefits can recognize other contributions, time demands, and opportunity costs. Walk-ons and partial-scholarship athletes likewise contribute to practice, depth, preparation, and competition while often paying substantial educational costs themselves. Agreements should state whether benefits are guaranteed, conditional, renewable, affected by transfer, or protected after injury. Athletes also need access to independent advice. Cash payments and NIL income can create federal and state tax obligations, estimated payments, agent fees, contract risk, and complex budgeting decisions. Financial education should therefore cover taxes, savings, credit, insurance, fraud, and long-term planning without steering athletes toward advisers who have conflicts of interest. Legal representation and agent rules should make fees, exclusivity, termination rights, intellectual-property terms, and moral clauses understandable before athletes sign.
Institutional Budgets, Competitive Balance, and Athlete Protection
Direct athlete compensation creates budget trade-offs that should be visible rather than hidden. Schools may finance benefits through media and ticket revenue, donor support, conference distributions, reduced administrative expense, changes in facilities spending, or other athletic resources. Student fees and institutional subsidies should be disclosed clearly so the campus can understand who is paying for the athletics model. Financial pressure should not lead athletic departments to scrutinize athlete benefits while treating coaching salaries, facilities expansion, consultant costs, and administrative growth as untouchable. Competitive balance is another concern because wealthier programs can offer larger benefit pools, stronger NIL markets, facilities, and media exposure, making already powerful programs more attractive. Some inequality existed long before direct compensation, but the new system makes it more explicit. Caps, reporting rules, conference policies, and roster limits may moderate differences while also creating new legal and competitive questions.
Athlete protection should remain central when rosters change or programs are cut. Payment and scholarship agreements need clear provisions for injury, coaching changes, team elimination, transfer, and loss of playing status. Athletes injured while representing the institution should retain reasonable medical and educational protection rather than losing benefits because they can no longer compete. International athletes require special attention because immigration status can affect whether and how NIL or other income is permitted. Institutions should provide qualified immigration and tax guidance rather than assume that domestic athletes and international students operate under identical rules. Compensation also does not resolve the separate legal debate over whether some athletes should be classified as employees. Employee status would affect wages, collective bargaining, workers’ compensation, taxes, and labor law. Direct institutional benefits can exist without settling that question, so schools and athletes should not treat the current settlement framework as a final answer to every legal issue surrounding college sports.
Conclusion
The college-athlete compensation debate has moved beyond the older question of whether athletes may receive anything beyond a scholarship. Scholarships, education-related benefits, NIL income, collective licensing, and direct institutional payments now coexist within a more complex system, particularly in Division I after the House settlement. The central policy challenge is therefore allocation. Financial recognition can be justified by athletes’ time, economic contribution, physical risk, and opportunity costs, but a responsible model must also protect education, health, gender equity, nonrevenue sports, and athletes at institutions with fewer resources. Transparent formulas, written agreements, independent appeals, financial and legal education, injury protection, and public reporting can reduce favoritism and exploitation. Revenue can inform distribution without becoming the only measure of value. College athletics can compensate athletes more fairly without abandoning its educational mission, but doing so requires institutions to treat compensation, academic opportunity, health protection, and equity as parts of one system rather than competing obligations.
Works Cited
NCAA v. Alston, 594 U.S. 69 (2021).
National Collegiate Athletic Association. “A Letter from NCAA President Charlie Baker.” 6 June 2025.
National Collegiate Athletic Association. “Division I Settlement Resources.” Updated 2026.
Sanderson, Allen R., and John J. Siegfried. “The Case for Paying College Athletes.” Journal of Economic Perspectives, vol. 29, no. 1, 2015, pp. 115–138.
Staurowsky, Ellen J. College Athletes for Hire. Praeger, 1998.
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