Scholarship athletes can make money from their names, images and likenesses, but the NCAA systematically discourages them from learning how to manage that money. Despite pleas from high school teachers nationwide, they refuse to include personal finance as a subject required for NCAA scholarships.
For the past year, states have allowed college athletes to be compensated for use of their name, image and likeness (NIL). In 12 months, there has been an explosion of activity, with athletes beginning to capitalize on this new frontier in college sports. Their institutions are helping them with collectives that link them with businesses they can promote through social media and other methods.
Several U.S. senators are trying to pass an updated College Athlete Bill of Rights that would protect athletes’ interests. The bill of rights also would require athletes to take a 15-hour university course on financial literacy and life skills development. In fact, many of the state bills legalizing NIL require a personal finance course.
Both of these approaches have merit. The problem is that research shows that a 15-hour course, or a course that embeds personal finance with other subjects, isn’t nearly as effective as a full-semester course.
And it makes more sense that these athletes — like all students — get this education before college. With the stroke of a pen, the NCAA could ensure that all athletes in every state take a personal finance course in high school before graduating.
Unfortunately, an archaic NCAA policy results in a disincentive for high school student-athletes to take this increasingly important course. To qualify for college scholarships, high school student-athletes must take core courses defined by the NCAA and — guess what — personal finance isn’t one of them.
While courses in English and math are certainly valuable, so is a practical life skills course such as personal finance. The earlier young people learn to manage their money the better. Studies find that sound financial habits established earlier in life are key to developing financial capability in adulthood.
Student athletes especially need to know about paying themselves first, the power of compounding returns, investing in the stock market, establishing and managing credit and avoiding banking fees. High school is the right time to teach these essential living skills.
It matters not whether you’re a Heisman Trophy candidate in football or a talented female lacrosse player. Many athletes in “minor” sports are profiting from NIL rules. They have to be smart with their money.
The NCAA refusal to include personal finance as a core course definitely leads students away from the subject — and toward potential money management fiascos. One teacher told me she applied to the NCAA to have her personal finance course qualify as a core course, only to be told that association’s guidelines disallow courses related to one’s personal life, such as paying for college, types of credit, investing, insurance and budgeting. Another teacher was told by an NCAA representative that “we are not concerned with preparing students in the world of work.”
All those sad stories about professional athletes who lost all their money are due in part to a lack of financial literacy, and we surely will hear more such tales in this new era. The NCAA can help address this by simply changing its shortsighted policy that doesn’t add up.
Tim Ranzetta is co-founder of Next Gen Personal Finance, a Palo Alto non-profit startup dedicated to ensuring that by 2030 all high school students take a personal finance course. He was a collegiate athlete at the University of Virginia.
