Revolutionary Financial Aid Changes on the Table

changes to athletic scholarshipsIt is extremely early in the process, but the NCAA Division I Rules Working Group is kicking around some of the most revolutionary changes to financial aid in some time. A number of concepts would radically change the landscape for both headcount and equivalency sports while others would remove many of the burdens and hassles surrounding financial aid.

Right now these ideas are just concepts being kicked around by the Rules Working Group, who are vetting them through various membership committees. They are a long way from becoming formal proposals and many of them will likely not make it into the rule book  But in total, these proposals show a vision of the NCAA’s financial aid rules that will radically change how scholarships are awarded and athletes are recruited, especially in the equivalency sports.

The Rules Working Group presented these ideas to the Awards, Benefits, and Financial Aid Cabinet last week. The ideas are currently receiving feedback, which stands to be contentious given how big the changes would be. Even January 2014 might be an aggressive timeline for the Board of Directors to vote on any formal proposals given the current state of the concepts. August 2014, October 2014, or January 2015 might be more realistic.

Tweaks

Along with the bigger concepts, there are a number of smaller tweaks, including:

  • Eliminating recruited status as a factor in determining countable aid;
  • Simplifying the definition of “institutional aid”;
  • Permit athletes to receive any meal plan offered by the school;
  • Expand the definition of permissible books;
  • Expand the definition of permissible fees;
  • Eliminate the proportionality requirement for summer aid;
  • Eliminate the one-year minimum for a scholarship agreement;
  • Allow retroactive aid within the same academic year;
  • A uniform mid-year replacement rule;
  • Eliminating the multisport athlete requirements;
  • Removing the waiting period for employee tuition benefits;
  • Change or eliminate some paperwork requirements.

Most of these would be relatively non-controversial, although some schools may object to dropping recruited status (which would have a huge impact in football and basketball) and eliminating the proportionality requirements for summer aid. That could give schools with large summer school budgets and big endowments a major advantage in attracting walk-ons. But those changes would be minuscule compared to some of the others being discussed.

Full Cost-of-Attendance Scholarships

As the miscellaneous expense allowance or stipend is stuck in neutral, the Rules Working Group is attacking the issue at its heart. This concept would allow schools to award athletic scholarships all the way up to the full cost-of-attendance. This is the most expansive and expensive of the potential stipend proposals, adding up to $250 million in available financial aid if schools decide to fund the increased scholarships. This would impact both headcount sports (where athletes will receive bigger scholarships) and equivalency sports (where there will be more total aid to be split up).

Block Aid Awarding in Equivalency Sports

Even bigger than full cost-of-attendance scholarships is an idea to completely change how equivalency sports award aid. Right now, equivalency scholarships are awarded as either elements (e.g. tuition and fees or books), percentages, or flat dollar figures. The compliance office then slices and dices the numbers to create the fraction for each athlete and adds those fractions up to make sure the total is under the limit.

The concept being pitched is to change equivalency scholarships to block scholarships. Equivalency sports would be required to award scholarships by element, broken into tuition and fees, room, board, and books. Instead of a limit on total equivalent scholarships, teams would have a limit on how many of each block they can award. So instead of 11.7 scholarships, baseball might be allowed to award 12 tuition and fee scholarships, 12 room allowances, 12 board allowances, and 12 book scholarships. Schools would mix and match blocks to create different scholarship amounts.

This would simplify the process of figuring out whether a team is under the limit. But it would also eliminate some of the more creative equivalency scholarship strategies. It would also change how athletes compare scholarship offers, although whether that change is for the better or worse is not yet clear. It also raises the question of whether headcount sports could be eliminated and sports like football and basketball could move to the block model.

Roster/Counter Limits

On top of this block aid concept is an idea to change all equivalency sports to hybrid sports like baseball, men’s hockey, and FCS football. These sports have limits on both the total equivalent scholarships awarded and the number of counters, i.e. athletes who receive any athletic scholarship. Also part of the concept is the possibility of roster limits, like the one in baseball.

Some of this would be redundant if the block model was adopted, which necessarily limits the number of athletes who could receive aid. It would have big competitive impacts though, as power programs would not be able to use smaller scholarships and walk-ons to build the type of depth they may be accustomed to.

Only Count Athletic Aid

Currently, once an athlete becomes a counter (i.e. receives any athletic scholarship), many forms of financial aid unrelated to athletics are included in calculating their equivalency as if those scholarships were athletic aid. Chief among these scholarships is any need-based aid provided by the institution. This limits the ability of schools to create financial aid packages that mix and match athletics-, need-, and merit-based aid to meet what the athlete is asking for.

This concept, which comes up every few years, would eliminate the counting of any aid not related to athletics. This would free up schools to package athletes’ financial aid however they can, a major advantage for schools with large endowments. Schools would need to tread carefully though as increased availability of this aid for athletes may lead to increased pressure from the athletic department on the financial aid office to bend rules.

Books for All Athletes

The final big idea would be to remove books as an element of financial aid and allow schools to provide any athlete with books as a permissible extra benefit. If you combined this idea with the block aid model, then books would obviously be removed as one of the blocks.

Despite being the smallest of the big changes on this list, removing books from the financial aid process has profound impact on a number of areas. Book scholarships are used extensively by some schools in the recruiting process. Removing books from financial aid changes how APR and graduation rates are calculated by removing athletes from the cohorts. Schools may also limit walk-ons who might have an expectation of receiving books.

What the Future Looks Like

If by some miracle all these concepts became action items, then formal proposals, then adopted NCAA rules, it would radically changes the future of college athletics, especially for equivalency sports. Fewer athletes would receive larger athletic scholarships. Teams would have fewer walk-ons. Recruiting role players would change. And athletes who are eligible for large nonathletic scholarships would be even more highly recruited than they are now.

All these concepts along with some related ideas like unlimited food for athletes point to even greater changes long-term. Eventually the idea of team financial aid limits may fall away as roster limits are established and elements of athletic scholarships are removed. If books and board are incidental benefits of being an athlete, why not housing, fees, even tuition? Small enough roster limits combined with some economies of scale could make eliminating financial aid limits manageable for all but the smallest Division I athletic departments.

Posted on by John Infante
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