Like many college students, Division I student-athletes are seeking emergency financial assistance from their universities during the pandemic
Athletics Veritas is a weekly series aimed at helping higher education executives, faculty, and other stakeholders stay tuned in on trending national issues impacting college athletics, especially NCAA Division I. Athletics Veritas is created by senior DI athletic administrators around the nation.
From Athletics Scholarships to Covid-19 Emergency Funds, How a Division I University's Cash Flow Impacts Student-Athletes (and their families)
Like many college students, Division I student-athletes are seeking emergency financial assistance from their universities during the pandemic
A university’s emergency fund and the federal government’s CARES and HEERF grants have been go-to financial resources for students (including student-athletes) during the pandemic
Some Division I student-athletes send residual athletic scholarship and Pell grant monies back home to help with their family's expenses
Compressed athletics department revenues may feel a tug from the athletics department’s scholarship line-item, especially if college football is postponed or canceled
Like many college students, Division I student-athletes are enduring financial strain from the pandemic. In addition to fewer jobs and internships being available, scholarship money to attend summer school (and, in turn, receive room and board) also became a hit-or-miss proposition when universities and their athletic departments began implementing cost-containment measures ranging from canceled recruiting trips to furloughing or non-renewing athletics department staff.
Many universities across the country have emergency funds available to support students in times of need, including covering expenses needed for distance learning, child care expenses, lost, stolen, or destroyed items, or other unforeseen circumstances. These emergency funds, though, weren’t necessarily built to handle a crisis that faces us all and have therefore been stretched thin in recent weeks.
When the pandemic began sprawling across the United States, the Coronavirus Aid, Relief and Economic Security (CARES) Act was established. This funding mechanism included the Higher Education Emergency Relief Fund (HEERF) specifically intended to support universities and their students, effectively creating a second student emergency funding resource on top of a university's stand-alone fund.
According to the National Association for Student Financial Aid Administrators (NASFAA), the (CARES) Act includes the HEERF which provides more than $14 billion in emergency funding to higher education. Of those funds, more than $6 billion must go directly to students in the form of emergency financial aid grants (HEERF-student share) for expenses related to the disruption of campus operations due to the COVID-19 crisis. On April 9, 2020, the U.S. Department of Education (DOE) published a list of individual institutional allocations, a certification form that must be signed and returned in order to access the funds, and a letter from Secretary Betsy DeVos outlining the DOE’s implementation of the CARES Act program.
As the HEERF grant program was being rolled out, a few policy tweaks and clarifications came along. On April 21, 2020, the DOE released an additional clarification on student eligibility and allowable uses of HEERF-student share funds. On May 21, the DOE announced that they will not be enforcing previous guidance that required students to be Title IV eligible to receive HEERF Grants, because the guidance lacks “the force and effect of law.”
Then, on June 17, the DOE issued a preview of its interim final rule regarding the distribution of coronavirus emergency relief grants to students, doubling down on its position that only Title IV-eligible students can receive the funding.
The DOE clarified in the rule that enforcement of the Title IV eligibility interpretation will not be retroactive before the date of publication in the Federal Register, but reminded institutions of its prior guidance regarding funds issued to individuals living in the country illegally, those enrolled in the Deferred Action for Childhood Arrivals (DACA) program, and international students.
Some Division I student-athletes, especially those participating in Division I “head count” sports (e.g., women’s basketball, men’s basketball, football, women’s volleyball, etc) that offer full cost-of-attendance scholarships, are used to scholarship “overage” in the form of extra meal money as well as cost-of-attendance stipend money that goes in to their pocket. This pocket money helps assist with various living expenses (e.g., transportation; phone bill; child care).
For decades under Division I rules, a full athletics scholarship was limited to funding a student-athlete’s tuition, fees, room, board, and required books. When Division I’s governance model morphed into a two-pronged structure that included the autonomy governance model for the Power 5 conferences (i.e., ACC, Big Ten, Big 12, Pac 12, and SEC), one of the first policy issues to be addressed was expanding the definition of what constituted a full athletics scholarship.
Technically, universities set their overall “cost of attendance” (COA) to include those items in the NCAA’s long-standing definition of a full athletics scholarship or “grant in aid” as once known, but the COA, by federal definition, also contmeplates miscellaneous expenses such as child care, a computer, transportation, and other cost-items the average college student may incur in order to attend college. This additional category of money was added to Division I’s full athletics scholarship definition a few years ago, at least for the Power 5, and enabled student-athletes on full scholarships to receive up to a few thousand dollars more to help with these expenses.
Some of those Division I student-athletes on full athletics scholarships, now with the injection of COA monies, are able to forward some of that money home to assist with their family’s bills. That is, Division I student-athletes on full athletics scholarships are not necessarily the only ones waiting on their monthly scholarship check disbursements.
But, at present, we have entered a new frontier of financial austerity. When it comes to seeking financial assistance for one’s family, the student emergency funds offered by many universities are intended primarily to support only eligible, enrolled college students. Standard criteria listed for many university emergency funds makes it clear the funding is intended to help with the student’s direct expenses, not necessarily the student's family members who also are facing financial stress.
Although student-athletes who remain enrolled would maintain their eligibility for scholarships, it’s plausible that athletic departments will revisit all of the parts compromising an athletics scholarship---from meal money to COA funds----to see where these costs could be reigned in. It's not the line-item on the expense side that schools are inclined to cut first, but with sports being cut or suspended, nothing is sacred.
Universities have maintained student emergency funds well before the term “COVID-19” was in our daily vocabulary. These university emergency funds are in place, for example, to assist college students in covering a student’s expenses arising from an emergency circumstance to help cover a student’s medical bills, prescriptions, and utility bills, as examples.
Yet, the institutional emergency funds created for students are not endless reservoirs of cash either. Although such emergency funds are not considered loans with no expectation the student pays the university back, some institutions have established ceilings on the dollar amount it would award to any student who makes a request and such ceilings may fall short of the total expenses owed by a student including student-athletes.
In addition to athletics scholarships and emergency funds, Pell grants are another key funding source for college students particularly those from low-income households. Like the other monies, Pell grant funds help cover a student’s out-of-pocket expenses and are available to qualifying college students including student-athletes, regardless of their athletics scholarship level. NCAA rule wise, Pell grant money is exempt from counting against individual or team scholarship limits. For full athletics scholarship student-athletes, in some instances, the additional Pell Grant money, like meal money and COA money, is sent home to help their families cover rent, mortgages, and utility bills.
And for every full scholarship student-athlete in football, basketball, women’s volleyball, or women’s tennis, there are many more Division I student-athletes in softball, lacrosse, soccer, baseball, track, swimming, field hockey, and others, only receiving a partial athletics scholarship under the equivalency sport scholarship model. These student-athletes, like most college students, have loans and are trying to manage the bills that come from tuition, housing, meals, and utilities. That is to say, many Division I student-athletes, despite being "on scholarship" and despite these other funding sources, are pressed with monthly bills and the prospect of long-term debt by the time they graduate.
The Name-Image-Likeness (NIL) gold-rush in-waiting could be the game-changing revenue haven for some student-athletes who project enough fame and/or social media influence to appeal to Park Avenue and/or their local Main Street to generate NIL opportunities that lead to additional income. The NIL frontier, though, is unknown territory with, in the end, finite dollars. Those finite dollars will conceivably gravitate toward the top echelon, the most-popular student-athletes and not necessarily the masses.
We all wait for dispositive decisions on the fall sports’ seasons, especially football which is the nerve center of the college athletics economy. If no college football games are played this fall (or next spring), leaving those coveted Saturday TV time slots vacant and networks with no live sports inventory, how Division I institutions reconcile their evaporating FY21 budget revenue projections against their commitment of a seven-figure athletics scholarship line-item may be the real must-see TV.
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.
