Higher Education Act Changes Could Have Big Impact on Athletics

Reverend Michael J. Garanzini, president of Loyola University of Chicago, has an editorial in the Chronicle of Higher Education today about the upcoming reauthorization of the Higher Education Act of 1965. That federal law covers most of the financial aid provided by the federal government and is the backbone of federal regulation of higher education. Colleges that fail to comply with federal laws regarding higher education can be prohibited from receiving federal student grants and federal student loans, which cripples the institution.

Rev. Garanzini’s commentary focuses on the accountability measures pushed during this round of reauthorization. The popular perception of college athletics driven by football and men’s basketball leads most fans to think this law had little or nothing to do with athletics. Athletic scholarships do not come from the federal government and athletes are not thought to be held accountable for academics. But it could have major impacts across collegiate athletics, even the revenue sports.

The first idea pushed by Rev. Garanzini is to tie the amount of federal aid an institution can receive to accountability measures like graduation rates, retention rates, and student loan default rates, but not tuition as some federal officials have suggested. An institution’s overall graduation rate would be as important to coaches as their own APR. If a prospect’s Pell Grant is cut in half because of an institution’s accountability scores, that will make it very difficult if not impossible to recruit that athlete to the institution. And if the Pell Grant is on top of a full grant-in-aid, the athletic scholarship cannot be increased to cover the gap.

Another of Rev. Garanzini’s ideas seems great for many students especially athletes: requiring institutions to match Pell Grants. The Pell Grant program is so big that many institutions, especially the type of institution in Division I, would have to come up with the matching funds.

But how would the NCAA handle Pell Grants that would now total over $11,000? The NCAA allows an athlete to receive their Pell Grant even if it exceeds the cost of attendance. But on average, that excess for athletes on full grant-in-aids and full Pell Grants is about $2000-$2500. And the matching funds would not be federal government money but institutional financial aid. The NCAA stuck to this interpretation when dealing with the Yellow Ribbon Program, part of the new version of the GI Bill passed after 9/11 that requires institutions match federal funds. In that case, an athlete might see little or no additional money if he or see has both a large athletic scholarship and a large Pell Grant.

The most ambitious of Rev. Garanzini’s ideas with an impact on athletics is to pay federal loans and grants after a student has completed courses. If institutions are still requiring student accounts to be clear or payment plans to be set up before a student registers for classes, this has a major impact on many equivalency sport athletes and even some full grant-in-aid and revenue sport athletes.

The NCAA may need to allow institutions or athletic departments to set up short-term, low interest financing options for athletes. Or dramatically expand, even eliminate limits on athletic scholarships. Otherwise, who could play an equivalency sport would be limited to full scholarship athletes, those who are wealthy enough to pay for college on their own, and those who can get expensive private loans. Athletic scholarships would have to increase to cover the cost of attendance as well since Pell Grants could no longer be counted on to help pay some student expenses.

If all these of these ideas were implemented together, that would be a huge shock to college athletics. The big winners would be institutions like Stanford and the Ivy League, with little threat of reductions in federal financial aid and large institutional financial aid programs that can cover delayed or lost federal money. The big losers would be equivalency sports at large public universities. The federal funds that help make the institution more attractive to out-of-state students would not have the same effect. Only a tiny handful of programs would be so prestigious that they would be able to recruit nationally. Most would have to refocus on in-state students with even faster growth in international recruiting.