June 27, 2002
By Gary T. Brown
In his State of the Association address at the 2000 Convention, NCAA President Cedric W. Dempsey gave student-athletes some rosy financial news. Fresh from signing a long-term, $6 billion deal with CBS, Dempsey noted that the Association had carved out a package that over the life of the contract would provide more than three-quarters of a billion dollars to the direct support of student-athletes.
Some of that sum included increases to the existing Special Assistance Fund and Academic Enhancement Fund. But the new TV rights contract also allowed a third fund to be created -- the Student-Athlete Opportunity Fund, beginning at $17 million in 2003 and increasing to $51 million in 2012 -- for the purpose of providing direct benefits to student-athletes.
"I said at the time of the contract announcement and I want to reiterate today," Dempsey told the 2000 Convention delegates, "student-athletes must be among the first beneficiaries of this new rights agreement."
The announcement was the simple part. The hard part now is for athletics administrators to decide just how "direct" those benefits will be.
So far, all that's known about the Student-Athlete Opportunity Fund is that it can't be used to supplement staff salaries, capital improvements or countable grants-in-aid, restrictions that were placed early on. How it will be distributed also is known. Dempsey and other NCAA leaders recognized that it would be inappropriate to simply divide up the new fund and send it to schools, so NCAA and Collegiate Commissioners Association representatives agreed that the funds would be distributed through conferences with amounts allocated based upon the broad-based formula (sports sponsorship and grants-in-aid) beginning in August 2003.
But how the funds will be used appears to be a multimillion-dollar open book.
Student-athletes have said they want the fund to be something tangible -- more than just another program or initiative. But because the distributions will be uneven by conference (because of the broad-based formula), figuring out tangibility while being attentive to competitive equity is a stiff challenge.
"Once again, student-athlete welfare and competitive equity appear to be on the fulcrum to be balanced," noted Ohio Valley Conference Commissioner Dan Beebe.
Tangled financial aid web
Beebe and his peers get the first crack at suggesting uses for the fund. The Division I Management Council and Board of Directors ultimately will decide policy, but those groups have asked the commissioners to work out the details of implementation.
What appears to be emerging is a complicated collection of proposals that come with various caveats. One of the more popular notions is to allocate the dollars to help close the gap between the scholarship and cost of attendance. That indeed would be the kind of "direct" benefit student-athletes want, but a swarm of concerns cloud the issue from an administrative perspective. Would the funds constitute countable aid? Would Pell Grants be affected? Would the funds be allocated based solely on need or be provided only to those who receive full grants?
"If some conferences use their share to assist student-athletes up to the cost of attendance, and other conferences either don't do that or don't have the amount of funding to be able to do that, then that would impact recruiting," Beebe said.
The cost-of-attendance issue has come up before. The Division I Committee on Financial Aid, as part of a Bylaw 15 deregulation plan, is exploring ways to allow student-athletes to accept non-athletics financial aid over and above the grant-in-aid up to the cost of attendance. People also refer to the cost of attendance when advocating some sort of stipend for student-athletes. That gap between the full scholarship and the cost of attendance is what seems to be at stake.
"There are no easy solutions," said Marvin Carmichael, Clemson University director of financial aid who also is a member of the Division I financial aid committee. "Financial aid officers have to make sure that these new funds do not exceed the limitations of whatever program the student is participating in."
For example, Carmichael said, if the student-athlete is receiving a state scholarship, which has a cost-of-attendance limitation, then the financial aid officer has to take into account all the dollars that are going to that individual and ensure that the limitations have not been exceeded. "If the limitations have been exceeded," Carmichael said, "there have to be some reductions. We have to look at every student on an individual basis."
Big 12 Conference Commissioner Kevin Weiberg said the issue is further clouded by Pell Grants, which currently are not included as countable aid. Nonetheless, Weiberg said, "many institutional aid officers believe that full scholarship student-athletes who also receive a full Pell are in some ways already at or above the cost of attendance and therefore don't really have that 'need.' "So if financial aid officers see the Student-Athlete Opportunity Fund being provided in some sort of direct payment, Weiberg said, they struggle with the notion of a student-athlete who already is receiving a full scholarship and a full Pell receiving additional money.
From a financial aid perspective, there also is a sense that because the Pell has increased in value since the time the NCAA allowed students to receive it on top of the full scholarship, the gap between the scholarship and cost of attendance is more than likely addressed with a full Pell. In other words, students are faring just fine if they're getting a full grant and a full Pell, plus access to the existing Special Assistance Fund.
Jim Delany, commissioner of the Big Ten Conference, said the Management Council and Board of Directors will have to answer some basic questions before conferences can begin to figure out if the fund should be applied to financial aid. Delany said he and his peers need to know whether the funds would be countable aid, whether they should be distributed based only on need and what the Pell Grant factor is.
"If the fund is used for students not on full scholarships, should that be countable?" Delany said. "Does the Pell become countable? If everything is countable and you exceed the cost of attendance, what are the implications? What happens if an institution takes a position on how much a student should be able to receive and yet we have this other money that we are trying to provide?
"The range of approaches is as wide as the range of dollars available to the various conferences."
Delany said the need-based-only discussion is as integral as whether the funds are countable. He said some conferences want to provide the money based only on need, while others want it provided as a matter of right.
"There are about 7,000 athletes in the Big Ten," Delany said. "While probably 5,000 of those receive some type of aid, only about 2,500 receive full aid. Everyone says they want direct benefits, but if you have $1 million and divide it by 7,000, you don't have much. Divide it by 5,000, and you have a different amount; divide it by 2,500, and you have another amount. Divide it based on need, and you have still another amount.
"That's a big discussion that needs to take place if you're talking about closing the scholarship gap."
Some believe that if the Management Council and Board were to go ahead and declare the Student-Athlete Opportunity Fund as noncountable, then that would at least give conferences the flexibility they want. But there would still be the equity issue of whether the funds would be given based only on need. "You want to distribute funds equitably but also in a way that doesn't totally unhinge the competitive environment," Delany said.
What student-athletes want
As with many budget-type initiatives that involve student-athlete welfare, student-athletes won't have the final say in how the new fund will be used. According to Division I Student-Athlete Advisory Committee Chair Michael Aguirre, though, student-athletes at least want their initial say to be as loud and clear as possible.
"With the decision residing almost entirely in the hands of conference administrators, we need to make sure we make it known we want the fund to directly benefit student-athletes," said Aguirre, a football student-athlete at Arizona State University. "We need to look at what would benefit all student-athletes, not just revenue-sport student-athletes, not just football and basketball players, but spread it out among everyone and provide meaningful opportunities. That's a difficult challenge, admittedly."
Weiberg also said he's heard the usual worries from student-athletes that new funds typically get "dumped into programs that ultimately won't be all that helpful."
"As long as the benefits are substantial and real and not illusory in some way, athletes feel positive about this," he said. "On the other hand, if they only create more national programs or subsidize an already existing program, then they might be skeptical."
SAAC Vice-Chair Dylan Malagrino said the time is now to put that skepticism to rest.
"We need to make sure the money does get back to student-athletes; otherwise it's a waste of the fund," the former Syracuse University student-athlete said. "It's a great opportunity to step up and show that the focus is on student-athlete welfare."
There have been other proposed uses for the fund in addition to the cost-of-attendance issue. Weiberg said they include providing year-round health insurance benefits, though it's uncertain whether the fund would be large enough to cover the premiums. There's also been talk of expanding the existing Special Assistance Fund to make certain categories not purely need-based. That might include enhancing some additional transportation or clothing benefits.
Other possible uses include providing course supplies, additional postgraduate opportunities, academic awards or internships.
Whatever uses are determined, though, probably won't include anything that smacks of pay for play.
"No one in Division I-A has viewed these funds as being a way to cross the line into a pay-for-play model," Weiberg said. "Even with a direct payment of some kind, there aren't enough funds here to take anyone above the cost of attendance."
"(The Student-Athlete Opportunity Fund) hasn't caused me to change my own philosophy on pay for play," said NCAA President Dempsey. "Most of what you hear from those who advocate a stipend is about the gap between a full grant and the cost of attendance anyway. We do need to move more toward financial aid based on cost of attendance, but I don't see us going beyond that."
The SAAC representatives agree that they don't want to use the fund that way.
"There are better things we can do than providing pay-for-play opportunities for a limited number of student-athletes," said Aguirre.
Malagrino agreed, saying, "Student-athlete welfare, not paying student-athletes, is what we're looking for."
What administrators are looking for are answers. The Management Council and Board will determine basic parameters within the next six months. Then it will be up to conferences to hammer out details. In the end, conferences don't need to reach a consensus on how to use the funds. But most commissioners want to know what the others are doing, if for no other reason than to reach some comfort level with the differences.
"All these issues arise because conferences will be receiving different amounts," Delany said. "It's complicated, but there are some threshold questions the Board needs to answer.
"Conferences would agree that they'd like to have as much flexibility as possible, but as soon as you have flexibility and you mix it with different approaches and different amounts of money, the level playing field becomes an issue."
While debate and concern continues, the encouraging news is that student-athletes will prove to be the beneficiaries.