About half of student-athletes who receive scholarships also obtain some type of need-based aid in college. About a third of student-athletes receive Federal Pell grants. With so many athletes receiving some sort of aid, its important to understand how NIL could affect your status as an athlete.
So, can earning buckets of money from NIL affect your eligibility for financial aid?
The short answer is, yes.
While the NCAA shares a resource for NIL and considerations for financial aid offices, below are more specifics for athletes who receive financial aid and are interested in perusing NIL earning opportunities:
As an athlete, does earning money from NIL affect the amount of need-based aid I receive?
Yes. Money earned from NIL is considered taxable income for student-athletes and needs to be reported on your FASFA form. A change in income levels could mean receiving less support financial aid or grants.
What happens if I ‘forget‘ or don’t report my NIL earnings while I receive financial aid?
Don’t do that. ? If you don’t report your income, you could be deemed ineligible to compete as a collegiate athlete.
If I receive products or services in exchange for my NIL (not cash) does that affect the need-based aid I receive?
Yes, receiving products or services in exchange for NIL can affect your financial aid status because goods and services are considered taxable income. So consider how accepting items like clothes, gear, sneakers, cleats, computers, furniture, appliances, cars, etc. can affect your financial aid status.
As an athlete receiving financial aid, can I work at all? How can I capitalize off of NIL while also keeping my financial aid benefits?
The good news here is… yes, you can work! Unless you earn a boatload of money, you can work a part time job while earning financial aid as long as you stay within the guidelines of your financial aid agreement. One example: you can hold a part-time job that is included in the documents you submit to FASFA. As a student-athlete, you can earn $7,040 without being penalized.
So as an athlete, if you’re working at a summer camp or spring break camp where you earn $2,000, you can also make just over $5,000 from NIL monies by partnering with businesses, or generating your own products or services. By staying under the $7,040 threshold, you will be able to profit off of NIL without losing financial aid eligibility.
Who can I speak to about financial aid?
If you’re not able to work with a trusted family member or coach, find an advisor at your schools’ financial aid office.
Can a financial aid advisor give me solid advice?
Yes, but due to the newness of NIL and the changing rules in this space, an advisor may not be comfortable giving you advice on how to handle your particular situation being an athlete. Here are some tips to help you prepare for a meeting:
- Make an appointment. Since most financial aid officers busy seeing students each day, make the best use of your time by making an appointment beforehand vs. just stopping by their office.
- Bring questions. Time is money! Prepare your questions and any helpful information that will allow you explain your unique situation as an athlete.
- Understand your financial aid requirements and NIL status. As an athlete, it’s important you know your status as an athlete to help the meeting run smoothly. A few examples of requirements include:
- The academic or need-based aid you qualify for
- The amount of scholarship dollars you’re awarded
- What is expected of you (the athlete) to maintain the scholarship or aid you receive (this may include academic and/or athletic requirements)
- What are the deadlines you need to know of to re-apply for aid
Is there a one-size fits all solution for athletes?
Nope- the financial aid you receive along with any NIL opportunities are unique to you as an athlete. There are so many factors that athletes have to consider when thinking about NIL such as:
- The sport you play
- The school you attend
- The division, conference and state you compete in, and
- The competitiveness within the NIL market
If you’re approached by a business to endorse or market their products or services, just make sure you do your research before signing on the dotted line. Checking with your financial aid officer before entering a contract could make a big difference in the financial aid you already receive.