Beginning in 2022 NIL (Name, image and likeness) deals have burst on to the scene since student athletes have been able to profit off of their name. I am now curious to understand how this has affected student athlete’s education on the topic, and on their finances in general.
Yes, many athletes hire agents and financial advisors to negotiate their NIL deals, but they may still struggle. Look to the NFL, where more than 15 percent of players, long out of college, declare bankruptcy within a decade of retirement. NIL deals are happening before students receive a diploma.
A 2019 survey of 30,000 college students from 440 schools found that just 53 percent believed they were prepared to manage their money. With little having changed over the intervening five years it’s likely that poor financial decisions, jeopardizing the long-term financial stability of student athletes, will be as much the rule as the exception.
The Role of Educational Institutions
When NIL deals were announced, around 75 percent of student athletes surveyed wanted to learn about investment platforms and taxes, and 44 percent were concerned about student debt.
Considering the $1.7 trillion student loan debt that continues to grow, colleges and universities should be implementing financial literacy courses for all of their students. But at the very least, educational institutions need to bridge the financial literacy gap for student-athletes.
The NCAA has started emphasizing the need for financial literacy and some schools have been proactive. San Diego State, for instance, hired an NIL coordinator to assist student-athletes in navigating financial decisions related to NIL deals. However, many schools have failed to adequately invest in programs protecting their students.As many schools begin creating NIL collectives and soliciting alumni donations to fund NIL deals, these schools must be held accountable and invest a portion of that funding into students’ long-term futures.
NIL deals are a long overdue but compensating student athletes is only half the battle. The NCAA needs to establish a financial education framework for colleges and universities to adopt that helps students avoid financial pitfalls. Financially literate student-athletes are better equipped to balance their academic and athletic responsibilities, better prepared to represent the NCAA, and better equipped to live financially independent lives after college.
Fewer than two percent of professional athletes will continue playing their sport professionally, however, more than 450,000 students have received an NIL deal…a figure that is only increasing (Curcio, 2024).
One of the biggest debates in college sports in the past decade was, “should we pay our student athletes”, and after years of debate the athletes are finally getting their money. The term NIL is a household term, but does the average person know the impact it’s having on the average student athlete. Student athletes have been thrown into a world of the unknown known as NIL, and they have no idea how to handle it. Many college students aren’t given or know of available financial lifelines at their prospective colleges, and colleges aren’t doing a good enough job to make these resources known. Athletes need counselors and people to go to for financial advice, since they have various factors working against them as athletes, students and young adults. How then can design create easier lanes of conversation between those that have knowledge and those that don’t?
Source
Curcio, B. (2024, June 24). The need for financial literacy with nil. Forbes. https://www.forbes.com/sites/yassprize/2024/06/21/the-need-for-financial-literacy-with-nil/
