With new NCAA pay policy, give student athletes financial literacy, too

Jori Epstein

Why are so many college athletes hungry or even homeless? They’re employees of the school and are being exploited. The amateur spirit is the beauty of college sports, and their education is a valuable reward. But testosterone-high adolescents are not capable of managing money.

Such questions of whether or not to pay NCAA student athletes have raged for decades. The NCAA, however, now has a response. Effective August 1, the major five athletics conferences (the Big 12, which this university belongs to, is among them) will begin paying their athletes more than just academic scholarships and the costs of athletic events and training: The Power Five conferences will now also pay athletes the “cost of attendance.” This definition is intentionally vague, allowing each university to define what this cost includes and to how much it entitles athletes.

Former Iowa State football player Tom Farniok gave his interpretation in a February article for CBS Sports.

“Nothing is going to be fixed until the people that say we’re just normal students realize that athletes aren’t normal students,” Farniok said. “Some people think [athletes] should be compensated a ton. I think that’s absurd. Just make it enough so if the guys want to go to a nice restaurant they don’t have to worry about, ‘OK, where’s this money going to come from?’”

Farniok’s definition aligns with that of many others around the country. An article in Time magazine listed probable benefits as “not only a scholarship, but … money for extras like food, clothing, the occasional trip to the movie theater.”

Although a consensus hardly exists, a notion of moderation emerges. The athletes need not be spoiled and entitled to all the luxuries of the world, but they should enjoy financial stability for basics like food, clothing and housing, as well as some spending money for outings and errands, such as laundry.

At UT, the cost-of-attendance standard is high. Though Athletic Director Steve Patterson hasn’t discussed it recently, he said last October at a forum that the University could spend nearly $6 million compensating athletes for the cost of attendance. The money, he said, breaks down to about $5,000 to $10,000 for non-scholarship expenses and $5,000 compensation for using athletes’ images.

Women’s Athletic Director Chris Plonsky said such compensation, which would need to come almost entirely from football and men’s basketball revenue, is extreme.

“If we begin to [further] remunerate the participants, that’s going to break the model,” Plonsky said.

In a June 18 investigative piece on the athletics department, Horns Digest estimated the price of implementing the cost-of-attendance model Patterson spoke of at closer to $10 million for the University’s 500 student athletes. Its article quoted Patterson as saying the cost of attendance will reach $4,310 per student-athlete for the 2015-2016 school year in addition to the five-grand stipend for “use of their image and likeness.”

Although UT is on board with the policy, discussions over the financial pressure it imposes continue. Regardless of the athletics department’s revenue — which USA Today reported last year was beginning to slow, though its 2013-2014 revenue of $161 million was still second highest in the country — any $10 million fee is sure to cause changes. But amid the discussion, the athletics department seems to have overlooked an important caveat: teaching athletes financial literacy.

On many levels, compensating players has moral backing and economic logic. The players work and produce revenue; thus, they deserve to be compensated properly. But the value of the money is significantly lower without the players possessing financial literacy. Alongside offering the cost of attendance, the University’s athletic department should introduce a course — or at least series of lectures — on responsible spending and management. The reward of smart spending will far outweigh the cost of time it requires from the busy athletes’ days.

And the 40 Acres need not search far for an instructor. Daron Roberts, a professor in the College of Liberal Arts who coached NFL and college football for seven years, has experience teaching such a course to high school athletes at a non-profit football camp he coordinates. He has worked with professional athletes and budding recruits. And developing a financial literacy program for UT’s student-athletes was already among Roberts’ goals for the Center for Sports Leadership and Innovation, which he founded on campus in December.

The infrastructure for the course is already on the way, if not completely here. But the athletics department hasn’t officially signed up, and it’s not worth it for UT to delay its start until a full-fledged program is confirmed. As soon as student-athletes begin receiving their extra money on August 1, they should also be receiving lessons in financial literacy, tips on how to spend and save, and perspective on long-term living costs.

Even with this additional compensation, debates will persist. Some will still take offense to the undercompensation of student athletes; others will continue to be appalled that the purity of college sports has disappeared; and still others will mock those who do not value the scholarship.

But for those who argue college students aren’t fit to manage their money, this university should prove them wrong. The tools are all on campus. Now, let’s add them up and make financial literacy a priority.

Epstein is a journalism and Plan II senior from Dallas. Follow her on Twitter @JoriEpstein.