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NCAA to increase cash for education of student-athletes
The NCAA has agreed to settle an antitrust suit by making significant increases in benefits to current and former student-athletes.
The provisions of the settlement include:
$218 million to be made available from now through 2012-13 to help student-athletes based on demonstrated financial and academic need. This is expected to amount to at least $4 million per year more than the NCAA provided last year through two other aid programs, and it could be substantially more than that, according to plaintiff attorneys. The NCAA also will make it easier for student-athletes to get these funds.
$10 million will be made available to qualifying former Division I football and men’s basketball players since 2002 who were part of the class-action suit. Under this plan, they can make claims for reimbursement of educational expenses up to $2,500 a year for three years. The funds can be used toward a degree or professional certificate at any accredited institution.
A new rule permitting, but not requiring, schools to finance year-round comprehensive health insurance for student-athletes. Such insurance previously was not permitted if it was not mandated for general students, too.
“I think really it’s a win-win,” San Diego State Athletic Director Jeff Schemmel said. “The student-athletes who have the most need in these cases will have an easier time getting that money, and from a university perspective, it’s not putting us behind the eight-ball (financially).”
USD Executive Athletic Director Ky Snyder echoed that sentiment, saying it was “solved nicely.”
In effect, Division I schools will be able to give more to student-athletes in need and not have to pay for it because the funds will come from the NCAA.
The case was filed in federal court in Los Angeles two years ago by Los Angeles firms Susman Godfrey and Blecher & Collins, on behalf of former football and basketball players. The settlement also may require the NCAA to pay up to $8.6 million in attorneys’ fees and expenses, subject to court approval.
The suit claimed the NCAA had imposed an artificial financial cap on an athletic scholarship, which is limited to covering tuition and fees, room and board and required books. The NCAA’s current definition of a scholarship (or “grant-in-aid”) is by the NCAA’s own admission about $2,500 less than a student would incur to attend the school, including travel costs, laundry, supplies, insurance and other incidental expenses outside of the NCAA definition of a scholarship.
The suit sought to eliminate this cap, which could have caused schools to spend hundreds of thousands of dollars more on scholarships. The settlement did not eliminate the cap, instead providing better access and more money to student-athletes in need.
“It was important to construct a settlement that supports our emphasis on education and degree completion,” the NCAA said in a statement. “The NCAA also wants to help former student-athletes who are part of the class members in this settlement gain career development skills to put that education to use.”
Currently, the NCAA provides money to several funds that support student-athletes in need. For example, it provided $27.7 million last year to a Student-Athlete Opportunity Fund, $12.3 million to the Special Assistance Fund and $19.8 million to the Academic Enhancement Fund. The $218 million called for in the settlement would be in addition to current funding for the Opportunity Fund, according to plaintiff attorneys, but would operate under its guidelines.
However, the NCAA may use the funds currently used for the Special Assistance Fund and the Academic Enhancement Fund for this purpose. Last year those two funds combined for about $32 million. At that level over six years, it would be $192 million, which means the $218 million in the settlement is worth about $26 million ($4.3 million annually) more than last year’s NCAA funding levels.
The NCAA said it “believes the full-ride scholarship currently offered is appropriate for the majority of student-athletes, but we recognize there may be some student-athletes whose needs are still not met, despite access to Pell Grants and other need-based aid.”
It said it hopes to meet those “true additional needs” by adjusting the rules regarding access to the hundreds of millions of dollars for student-athletes over the next several years. The NCAA said it now will use its least restrictive criteria in determining access to funds. Any student-athlete who has a need can apply for funds.
The money for former football and men’s basketball players will be subject to two limits. They could get one single $500 payment to cover career development expenses such as résumé preparation, career counseling or job placement services. They also could receive up to $2,500 per year up to three years to reimburse educational expenses used toward a degree. The NCAA will establish a Web site that describes these benefits and how to submit claims for them.
Plaintiff attorney Steve Morrissey said the change permitting year-round health insurance could be worth millions of dollars. He said 25,000 to 30,000 former athletes are class members in the suit.
The settlement agreement is subject to final court approval in a few months – an expected formality.
By Brent Schrotenboer, San Diego Union-Tribune Staff Writer