New emergency legislation prescribes various “education-related benefits” for DI student-athletes in FBS football and men’s or women’s basketball
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A Denied Injunction tied to Alston Case Leads to NCAA Adopting Emergency Legislation That Expands Permissible Benefits for Student-Athletes.
U.S. Supreme Court last week denied NCAA’s request for an injunction to prevent district court ruling from taking effect
NCAA is still requesting the U.S. Supreme Court review Court of Appeals for 9th Circuit’s affirmation of district court
New emergency legislation prescribes various “education-related benefits” for Division I student-athletes participating in FBS football, men’s basketball or women’s basketball
Some education-related benefits specified by the courts were already permissible; others pave new ground
Last Tuesday, U.S. Supreme Court Justice Elena Kagan denied the NCAA’s motion for an injunction to the U.S. Court of Appeals for 9th Circuit ruling upholding the lower court’s decision on the Alston case.
In effect, the U.S. District Court for Northern District of California’s ruling in Alston that the NCAA could not limit “education-related benefits” for student-athletes in Division I Football Bowl Subdivision (FBS) football and Division I men’s and women’s basketball could not be stalled from taking effect now.
Upon the denied injunction, the NCAA adopted emergency legislation the next day, Wednesday August 12, 2020. And although the NCAA is still pursuing the Supreme Court’s review (or certiorari for Latin scholars) of the decision to convince the highest court of the NCAA’s view that allowing expansion of compensation-like benefits “will eradicate the distinction between college and professional athletes, causing many consumers to lose interest as college sports are perceived as just another minor league,” an adrenaline shot of permissive benefits legislation suddenly has appeared in the Division I Manual.
This court case is tethered to antitrust issues. The NCAA’s position is that the “product” of college sports is harmed by further blurring the lines between amateur sports and pro sports by virtue of expanding the scope of benefits to student-athletes that could be construed as compensation and, in turn, would deter the continued interest of the consumer -- namely, college sport fans---in college sports. On the flip side, the Plaintiffs’ counsel have made their case that additional benefits beyond the NCAA’s current COA scholarship limits leading to outright compensation (read: pay-for-play) would not harm the product of college sports and, arguably, would enhance it.
Today’s Athletics Veritas digests and contextualizes the NCAA emergency rules that were adopted last week on the heels of the denied injunction tied to the Alston case.
Last week, the NCAA adopted Division I Proposal No. 2020-3, which permits a conference or an institution to provide the educational benefits specified in the Alston/Grant-in-Aid litigation injunction without limitations and specifies that the NCAA, a conference or an institution may provide a student-athlete an academic or graduation award or incentive that has a value up to the maximum value of awards an individual student-athlete could receive in an academic year in participation, championship and special achievement awards (combined) listed in Figures 16-1, 16-2, and 16-3.
Per the federal district court’s ruling, NCAA emergency legislation specified that Division I student-athletes in these three sports may now receive the following benefits from their Division I institution or conference:
A scholarship to attend a vocational school in addition to full grant-in-aid they already receive.
A post-eligibility scholarship to a former student-athlete to complete a graduate or undergraduate degree at any school.
An academic or graduate award or incentive up to maximum value of awards an individual student-athlete could receive in an academic year in participation, championship, and special achievement (combined) listed in NCAA Figures 16-1, 16-2, 16-3.
Computers, science equipment, musical instruments and other tangible items not included in the cost of attendance calculation but nonetheless related to the pursuit of academic studies;
Tutoring;
Expenses related to studying abroad that are not included in the cost of attendance calculation; and
Paid post-eligibility internships.
Several of these categories of education-related benefits have been permissible for Division I institutions to provide student-athletes either through expressly stated allowances codified in Division I Bylaw 16 (Awards & Benefits) legislation or via the NCAA’s Student-Assistance Fund (SAF).
For example, tutoring services for student-athletes have been permissible under Bylaw 16.3.1.1. In fact, Division I institutions are required to make general academic counseling and tutoring services available to all student-athletes. Such counseling and tutoring services may be provided by the department of athletics or the institution's non-athletics student support services. In addition, an institution, conference or the NCAA may finance other academic support, career counseling or personal development services that support the success of student-athletes. That is to say, tutoring, academic advising, resume-writing workshops, mock interview training, and the like have all been permissible to provide to Division I student-athletes for years.
The Alston ruling specified that post-eligibility scholarships were an education-related benefit that could also be provided by Division I schools to student-athletes in the three high-profile sports. Post-eligibility financial-aid support, though, isn’t a new avenue for NCAA schools. For former Division I men’s and women’s basketball scholarship student-athletes, as an example, Division I schools have been required to provide post-eligibility scholarships to these former student-athletes per legislation adopted in 2018.
That particular post-eligibility benefit comes with some conditions: (a) The former student-athlete received athletically related financial aid while previously enrolled at the institution; (b) Fewer than 10 years have elapsed since the former student-athlete's departure from the institution; (c) The former student-athlete's most recent enrollment as a full-time student occurred at the institution; (d) The former student-athlete was previously enrolled as a full-time student at the institution for a minimum of two academic years (four semesters or six quarters); (e) The former student-athlete meets all institutional admissions and financial aid requirements; (f) The former student-athlete has exhausted other available degree completion funding options (e.g., funds from a professional league or contract); and (g) The former student-athlete is in good academic standing at the institution and meets NCAA and institutional progress-toward-degree requirements. This requirement applies to initial and continuing eligibility for degree completion funds.
The Court’s ruling regarding post-eligibility overlaps current NCAA Bylaw 15 (Financial Aid) provisions regarding degree-completion that permit institutions to provide financial aid through either athletic department budget allocations or SAF dollars to former student-athletes. Specifically, Division I Bylaw 15.01.5.2 states that institutional financial aid may be awarded to a former student-athlete for any term during which he or she is enrolled (full- or part-time). This clause gives institutions latitude to assist former student-athletes, in any sport, who may return years later seeking to complete their undergraduate or graduate degree.
The Court’s ruling also noted computers, science equipment, musical instruments and other tangible items outside the cost-of-attendance (COA) calculation for all students would be permissible benefits to provide student-athletes in these three sports. Many of these tangible, education-related benefits have been provided to Division I student-athletes over the years through the NCAA’s SAF. Specifically, SAF dollars may be expended by Division I schools to provide direct financial support to current and former student-athletes with educational expenses; health and safety expenses; academic achievement and programming; and personal or family expenses. For example, a student-athlete who needed to purchase particular equipment for a chemistry lab class could have such an expense covered by their Division I institution through the NCAA SAF.
The court’s outlay of education-related expenses does not automatically lend itself to clear outcomes though. The ruling will necessitate additional analysis on campus before moving forward with financial support depending on the cost-item. For example, the court noted study-abroad expenses that are not already covered by COA calculation can now be covered for FBS football and basketball student-athletes per the amended NCAA rules. Each Division I institution’s financial aid office will need to confirm for the Athletics Department, for example, whether certain associated study-abroad fees such as elective sight-seeing trips led by a study-abroad instructor are included in an institution’s COA calculation. Per the Federal Student Aid website, institutions are allowed to include in their COA calculation “reasonable costs” tied to study abroad programs. Each Division I institution may arrive at a different conclusion on what those reasonable costs may be.
Despite overlaps with NCAA legislative permissions and standing SAF resources currently in place to support student-athletes, the court’s ruling does pave new ground in terms of the scope of permissible benefits to current and former student-athletes.
For example, Division I institutions may now cover the cost of a student-athlete attending vocational school. Although there’s been great latitude to help cover tuition costs for student-athletes, specifying an express path to financing a vocational degree is novel under NCAA rules.
The education-related benefits now permissible also include paid post-eligibility internships. How a school may leverage the availability of paid post-eligibility internships may be the heart of the matter. Could a guaranteed paid-internship upon graduation further blur the lines between permissible career services (allowed under Division I Bylaw 16.11) with concerns about recruiting inducements restricted under Division I Bylaw 13? That is, if a Division I member institution has strong ties to a Fortune 500 Company that is willing to create yearlong internships for basketball and football student-athletes and compensate those student-athletes $50,000 during that period, this new paid-internship carve-out may supersede any perceived or real recruiting unfairness claimed by peer institutions who cannot offer the same.
The most prominent and likely debated education-related benefit cited in the court’s ruling is the academic or graduate incentive award. This now-permissible award seemingly could be delivered as cash or cash-equivalent for student-athletes’ academic achievements -- cash awards being antithetical to NCAA benefit rules generally.
This incentive award could be valued up to the NCAA’s current maximum value of participation, championship, and special achievement awards specified in NCAA Bylaw 16 Figures 16-1, 16-2, and 16-3. The Court noted in its ruling this aggregate amount could total up to $5,600, although plaintiffs' counsel in the Alston case assert the calculation may run higher.
Lastly, each Division I conference and institutional member could establish its own limits and boundaries on these various education-related benefits now permitted. In addition to playing season decisions and COVID testing protocols, conference-level meeting agendas could soon be featuring Proposal 2020-3 and the Alston case which ignited the emergency legislation.
The timing of the NCAA’s emergency legislation cannot be ignored either. With pandemic-induced athletic department budget shortfalls and anxiety rising among student-athletes, coaches, and administrators about the prospects of sport seasons in 2020-21, the infusion of additional student-athlete benefit carve-outs in Division I legislation present additional financial pressures and opportunities, all at once.
The NCAA will pursue the U.S. Supreme Court’s review of the Alston case, but if and until any portion of the ruling is overturned by our highest court, these education-related benefits are now fair game for Division I institutions to provide to their student-athletes. Now, the devil of these newly legislated benefits is in the details.
Athletics Veritas is presented for information purposes only and should not be considered advice or counsel on NCAA compliance matters. For guidance on NCAA rules and processes, always consult your university’s athletics compliance office, conference office, and/or the NCAA.
