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Paying student-athletes opens an expensive can of worms for universities 

The House v. NCAA settlement paves the way for student-athletes to be paid for competing in intercollegiate sports. This has created an environment of anxiety and uncertainty around how to implement such a new compensation model. Universities already have a model in placing for paying students, however; the question is whether they should use it for this purpose. 

Research assistantships (RAs) and teaching assistantships (TAs) provide students, typically those pursuing doctoral and master’s degrees, with stipends and/or tuition waivers. In exchange for such compensation, these students participate in research projects (for RAs) or provide classroom teaching support to faculty (for TAs). 

RAs are typically financially supported by government or industry funding awarded to faculty, often through competitive processes that involve the submission of a research proposal. Faculty then hire graduate students to conduct the research that aligns with objectives for the proposals funded by these entities.  

Government agencies like the National Science Foundation (NSF), the Air Force Office of Scientific Research (AFOSR) and the Department of Energy (DOE), among others, provide funding to support discovery that advances knowledge in general (as for NSF) or in support of their mission (as for the AFOSR and the DOE). There is a well-defined link between the money, how it is used, and the outputs of such efforts. 

RAs are a critical component of funded-research activities. Their faculty-directed research often gets disseminated in peer-reviewed publications and presented at professional meetings for the benefit of other researchers and, more broadly, society. The research also gets written into dissertations and thesis that permit the students to complete their graduate degrees. 

Funding for TAs typically comes directly from universities to support their academic mission. TAs may provide a variety of educational services, including holding office hours for student questions, leading student discussion sections, grading course materials submitted by students and, for some, teaching sections of introductory level courses. Universities often have programs available to train these graduate students to meet their TA responsibilities, and mechanisms to monitor their performance. 

The common theme across RAs and TAs is that students are being paid to support the university mission of research, education and service. The question is whether this mechanism can, or should, be used to pay student-athletes. 

On the surface, the answer appears to be yes. However, there are other questions that must be answered to fully appreciate the issue. 

First, how much money will be needed? 

The House v. NCAA settlement will pay over 14,000 student-athletes just under $2.8 billion over 10 years. That comes to around $20,000 per student per year (the legal fees would reduce this payout; they are not considered in these computations). However, students typically compete for four years, which means that the total compensation per student of $200,000 would be spread over four years, making the compensation as much as $50,000 per year per student-athlete.

Using the University of Illinois Urbana Champaign as a case study, the total annual cost of compensation for its 650 student athletes could run over $32 million. However, such students are already receiving nearly $19,000 on average per year in tuition and student aid, which costs the athletic department around $13 million. Would the $32 million be in lieu of, or in addition to, the student aid? 

Then there’s the issue of how such compensation would be distributed.  

Much like RAs and TAs, students in different programs receive different levels of support. For example, RAs and TAs in engineering often receive higher stipends than their counterparts in liberal arts programs. The economics of supply, demand and competition drive such differential stipend levels. 

The same can be said with student-athletes. Should the power forward on the men’s basketball teams receive the same stipend as a wrestler or a gymnast? How about compensation for the red-shirt year? Distinctions between revenue and non-revenue sport student-athletes will also need to be considered. The same holds with how Title IX considerations must be confronted and addressed within the compensation framework. 

Clearly, the mechanism for paying student-athletes already exists within universities. However, the existing RA and TA structure is designed to support the institutions’ research, education and service missions. Can athletics be justified in the same manner? 

What the House v. NCAA settlement does is open a spigot of opportunities to rethink Power Conference college athletics. Should athletic departments remain part of the universities or be spun off as independent university-affiliated enterprises? Given that revenue sports drive the economics, should they alone be spun off, with affiliation fees paid to support non-revenue sports or the university general operating fund? 

There is also the issue of non-Power Conference athletics. These universities and colleges will be bound by the same rules carved from the settlement, without the financial means to cover the new costs. 

There are no right or wrong answers. What is certain is that Power Conference athletics will continue; the demand for it remains strong, as evidenced by viewership of March Madness. However, a mechanism to pay student-athletes must be forged. The RA and TA model certainly can be adapted for this purpose. The bigger issue is whether it is appropriate to use it, or to cast off college athletics, particularly revenue sports, as independent enterprises affiliated with universities. 

The House v. NCAA settlement is a critical driver to initiate such discussions. Indeed, not making substantive structural changes would be a lost opportunity. Most importantly, the student-athletes who have been left behind in the past, and those who will step on campuses in the future, all deserve better.   

Sheldon H. Jacobson, Ph.D., is a professor of Computer Science at the University of Illinois at Urbana-Champaign. He applies his expertise in data-driven risk-based decision-making to evaluate and inform public policy. 

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