Student athlete compensation in the United States refers to the evolving legal, economic, and regulatory landscape governing whether and how college and high‑school athletes may receive payment for their participation in sports or for the commercial use of their name, image, and likeness (NIL). Historically, the National Collegiate Athletic Association (NCAA) prohibited direct compensation to athletes under the principle of amateurism, limiting benefits to scholarships and modest stipends. This model began to erode as legal challenges, state legislation, and shifting public attitudes questioned the NCAA’s restrictions and highlighted the substantial revenues generated by college sports.
A major turning point came with California's Fair Pay to Play Act (2019), which allowed student‑athletes in the state to profit from NIL rights, prompting similar legislation across the country. In National Collegiate Athletic Association v. Alston (2021), the U.S. Supreme Court unanimously ruled against NCAA limits on education‑related benefits, with concurring opinions sharply criticizing the amateurism model and emphasizing the commercial nature of college athletics. Following the decision, the NCAA adopted an interim NIL policy permitting athletes nationwide to engage in endorsement deals, sponsorships, and other forms of compensation.
The NIL era has since expanded rapidly, with collectives, private companies, and universities playing major roles in facilitating athlete deals. High‑school athletes in several states have also become eligible for NIL agreements, and Congress has introduced multiple bills seeking national standards. Ongoing debates center on taxation, Title IX implications, competitive balance, and whether NIL compensation blurs the line between collegiate and professional sports. Recent legal settlements, including the House v. NCAA agreement allowing revenue sharing with athletes, signal a continuing shift toward recognizing student‑athletes as economic participants in a multibillion‑dollar industry. NIL has also expanded exponentially with the promises of students being paid life-changing money with certain deals that pay student-athletes up to $20.5M per year, through revenue sharing and continues to change the landscape of university athletics with also adding more brand deals and video games. Allison, Brandon. “NIL Pros and Cons | the College Game Is Changed Forever.” SportsEpreneur, SportsEpreneur, 29 Mar. 2024, sportsepreneur.com/nil-pros-and-cons/.
History The NCAA had long maintained that student-athletes cannot be compensated in the name of "amateurism". In 1953, the NCAA created the term "student-athlete" in response to the Colorado Supreme Court's ruling in University of Denver v. Nemeth that an injured football player was an "employee" of the University of Denver and therefore entitled to workers' compensation. Despite further attempts by the NCAA to classify student-athlete compensation as a violation of the Commerce and Contracts Clauses of the U.S. Constitution, "amateurism" in college sports had begun to fade as the push for student-athlete compensation grew stronger.
The latest movement in the college athlete compensation space focuses on payment for name, image, and likeness (NIL), a practice first adopted by the state of California in 2019. In September 2019, Governor Gavin Newsom signed Senate Bill 206, which generally allowed student-athletes in California to accept compensation for the use of their name, image, and likeness. The "Fair Pay to Play Act" bill was authored by California state senators Nancy Skinner and Steven Bradford and advanced with testimony from former Stanford volleyball star and 2015 national freshman of the year Hayley Hodson and Oklahoma State University football star Russell Okung. No federal statutes used to touch on this topic, and the only federal regulation permitting college students to accept compensation was 34 CFR § 675.16, which related to work-study programs.
The Supreme Court's 2021 decision in NCAA v. Alston shed light on modern federal attitudes towards student-athlete compensation. In this case, the Court struck down any potential limitations on education-related benefits that student-athletes may receive. In particular, the Court – and especially Justice Brett Kavanaugh – rejected the NCAA's "amateurism" argument as an overly broad and outdated defense for failing to allow its revenue-drivers (i.e., student-athletes) to receive compensation. The NCAA contended that the Court should defer to its amateurism model because it is a joint venture along with its member schools, but the Court instead reasoned that deference was inappropriate since the NCAA has a monopoly in the relevant market. The Court further rejected the NCAA's appeal that it was not a "commercial enterprise," noting the "highly profitable" and "professional" nature of certain college sports.
Several startups, including ATHLYT, have emerged to connect brands with student-athletes following the NCAA’s adoption of interim NIL policies, signaling a growing marketplace for athlete sponsorships. Grambling University signed what is believed to be one of the first NIL deals in 2022. In July 2023, multiple bills were introduced by members of Congress to regulate NIL."Senators offer latest bill aimed at college sports, NIL reform" ESPN. Retrieved 2023-07-26."Joe Manchin and Tommy Tuberville introduce bill on name, image and likeness rules for college sports" NBC News. Retrieved 2023-07-26."New NIL bill pushes Athlete's Rights, including group licensing" Sportico. Retrieved 2023-07-26.
In May 2024, NCAA settled the House v. NCAA class action lawsuit for $2.8 billion. The main plaintiffs, Grant House and Sedona Prince, sought an injunction to force the NCAA and affiliated athletic conferences to lift restrictions on revenue sharing from broadcast rights. The plaintiffs also sought damages related to their inability to use their name, image, and likeness. This lawsuit highlights changes in the legal approach to the NCAA's amateurism defense, which had been central to its stance on student-athlete compensation but was nearly eliminated by the NCAA v. Alston decision. As part of the settlement, schools are allowed to share up to $20.5 million of revenue a year with athletes, but NIL deals must go through a clearinghouse to determine if they are "fair market value".
In March 2025, Amir "Aura" Khan, a student manager on McNeese's men's basketball team, garnered widespread attention for being the first student manager of an NCAA varsity team to sign a NIL endorsement by signing NIL marketing deals with TickPick, Insomnia Cookies, and Buffalo Wild Wings.
Claimed advantages Name, Image, and Likeness (NIL) policies permit student-athletes to receive compensation while maintaining scholarship eligibility. Prior to these policies, compensation was limited to educational expenses, which some critics argued did not reflect the economic value of athletes. NIL policies also enable student-athletes to engage in endorsement and branding activities. NIL income has been associated with financial considerations for athletes from low-income backgrounds and with changes in recruitment and retention decisions. NIL has also contributed to the growth of athlete endorsement opportunities across multiple sports. Recent analyses report that the NIL marketplace has expanded into a multibillion-dollar industry. The implementation of NIL policies continues to evolve as schools and governing bodies adjust regulations. https://sportsepreneur.com/nil-pros-and-cons/
The NCAA adopted Name, Image, and Likeness (NIL) policies for student-athletes across all three divisions on June 30, 2021. This regulation enables athletes to monetize their personal brand and professional talents. The policy allows athletes to generate personal income, providing financial opportunities for themselves and their families while offering experience in financial management.
Criticism One large area of concern from recent NIL bills are the tax implications for student athletes. The NCAA maintains tax-exempt status by claiming its purpose in "fostering amateur athletics." NCAA universities are typically exempt from federal income tax because they are classified as charitable organizations. If the NCAA were to frequently enter contracts with student athletes and compensate them it could be at risk to losing this status. One impact on student athletes would be that their athletic scholarships would be subject to income tax. Additionally, student athletes would have to navigate varying state taxes. Some critics argue that because of these complications, student athlete compensation wouldn't be beneficial overall.
Another protest about student athlete compensation is that the NIL landscape will take away from the amateurism in the NCAA and commercialize college sports. Top NIL earners such as Livvy Dunne, an LSU gymnast with over one million followers on Instagram and TikTok, made several million dollars a year. There are worries that this type of income will blur the line between college and professional sports and remove the unique appeal and camaraderie of college sports. This has caused concerns about the implications on college recruiting due to the lack of national standardization for NIL legislation. Shortly after the Court's decision in Alston, the NCAA issued an interim name, image, and likeness policy which permits student-athletes to earn this compensation. States have also followed suit by enacting similar laws. To date, 29 states have some sort of NIL legislation in place since the Alston interim policy was put into place. For example, Illinois Public Law 102-0042 permits athletes to receive market-value compensation for the use of their name, image, and likeness. Critics have also argued that the combination of the transfer portal and Name, Image, and Likeness (NIL) opportunities has contributed to the increased amount of instability within college programs. The transfer portal has been described as creating a sort of “revolving door” effect, and this has lead to rosters becoming unstable at times. This also results in reduced player loyalty and uncertainty for both athletes and coaches.Reese, Renford (2023). "The Unintended Consequences of the NCAA College Athletics Transfer Portal." Journal of Higher Education Athletics & Innovation. Frequent player movement can make it more difficult for teams to establish and maintain a real consistent culture, as a high roster turnover can disrupt the communication of shared values between teammates and coaches and long-term team development.Corr, Chris; Bopp, Trevor; Stokowski, Sarah (2024). "Necessary evil: the difficulties of establishing programmatic culture in the transfer portal era." Frontiers in Sports and Active Living. Some researchers and coaches argue that while the system may support short-term success for the players, it can undermine long-term program stability and cohesion.Corr, Chris; Bopp, Trevor; Stokowski, Sarah (2024). "Necessary evil: the difficulties of establishing programmatic culture in the transfer portal era." Frontiers in Sports and Active Living.
Some researchers have also raised concerns about the impact of NIL opportunities and the transfer portal on these student-athletes’ and their mental health. This is caused from increased pressure to secure financial opportunities, maintain up to par performance, and make transfer decisions has been linked to higher levels of stress and uncertainty among athletes.
Revenue-sharing