NCAA Enters a New Era: Athletes Can Now Be Paid Directly by Colleges
A landmark ruling has officially reshaped the landscape of NCAA Division I athletics. As of July 1, 2025, participating schools may now directly compensate student‑athletes. The decision follows final court approval of the House v. NCAA settlement, effectively dismantling decades of amateurism restrictions.
What the Settlement Means
The NCAA has consented to a $2.8 billion restitution package, distributed over 10 years to athletes who competed between 2016 and 2024.
Starting July 1, 2025, schools can opt into a revenue-sharing arrangement—up to $20.5 million per year, amount gradually rising to over $30 million annually in future cycles.
How Schools Can Use the Funds
Athletic departments may source these funds from media rights, ticket sales, and even auxiliary revenue streams like bookstores and parking fees.
While most power‑conference schools are expected to allocate the bulk to football (≈70%) and men’s basketball, the allocation model remains up to each school. Innovative programs are exploring directing more to women’s basketball or Olympic sports.
New Oversight & Compliance Rules
A newly formed independent body, the College Sports Commission (CSC), will enforce the revenue cap, manage the NIL Go clearinghouse, and oversee contract and roster rules.
NIL deals exceeding $600 must be vetted through the Deloitte‑run NIL Go platform to confirm market-rate fairness. Deals tied to boosters or lacking legitimate business purpose can be audited or voided.
Major Issues & Legal Challenges
A group of eight female athletes has appealed the settlement on Title IX grounds, arguing that women are shortchanged by as much as $1 billion due to formulaic distribution skewed toward men’s sports. This appeal has delayed retroactive payouts.
A federal ruling also addressed the legality of booster collectives and pending lawsuits, including Terrelle Pryor’s antitrust claim against Ohio State.
What Has Changed, and What May Come Next
Scholarships & Final Roster Rules
Traditional scholarship caps are being phased out in favor of hard roster limits (e.g. football capped at 105 players), allowing schools to offer scholarships to all roster members via full or partial aid.
Athlete Status & Federal Oversight
Former President Trump signed an executive order enforcing rules to:
Ban third-party pay‑for‑play arrangements
Clarify whether athletes are employees
Protect funding for women’s and non-revenue sports going forward
Mobilize federal agencies to formalize governance guidelines within 30 days
Summary Table
Key Element Details
Settlement $2.8B over 10 years for athletes 2016–24
Start Date July 1, 2025
Max Annual Pay cap ~$20.5M, increasing over next decade
Primary beneficiaries Football and men’s basketball**, although formula is flexible**
Oversight College Sports Commission + NIL Go clearinghouse
Legal disputes Title IX equity appeal; booster collective transparency
Scholarship changes Roster-based limits; flexible scholarship offerings