Yes. Colleges do pay their athletes, and as of July 1, 2025, they can pay them directly. Under the House v. NCAA settlement, a participating school can share up to roughly $20.5 million a year in athletic revenue with its players for the 2025-26 academic year. That direct payment sits on top of three older channels: private name, image, and likeness (NIL) deals with outside brands and collectives; athletic scholarships that can approach $100,000 a year at expensive schools; and cash awards for academic performance capped at $5,980 per year.
Direct Payments from the School
The House v. NCAA settlement, approved in June 2025, created the first system in which universities share athletic revenue directly with athletes. Participating schools can distribute up to 22% of the average revenue across major conferences from media rights, ticket sales, and sponsorships. For 2025-26 that cap is approximately $20.5 million per institution, rising 4% annually to roughly $21.3 million in 2026-27.1College Sports Commission. Revenue Sharing
There are no per-sport caps. Each school decides how to split the pool among its programs and roster spots, though any athlete receiving a share must be listed on that sport’s official roster.2NCAA. Question and Answer: Implementation of the House Settlement Schools are not required to spend the full cap, and there is no minimum. In practice, football and men’s basketball players at large programs are expected to receive the biggest shares, because those sports produce most of the revenue being split. A new independent body called the College Sports Commission oversees compliance and tracks roster allocations through the College Athlete Payment System.
The settlement also creates back-damages payments of roughly $2.8 billion for former athletes who competed between 2016 and 2024, distributed over ten years. Former athletes must file a claim to receive their share.
Name, Image, and Likeness Deals
NIL money does not come from the school. In July 2021 the NCAA suspended its ban on athletes profiting from their own name, image, and likeness, and athletes now sign private contracts with brands, local businesses, or collectives—independent groups funded by boosters and donors that pool money to pay athletes for appearances, social media content, and marketing campaigns.3NCAA. NCAA Adopts Interim Name, Image and Likeness Policy
Earnings vary enormously. Arch Manning’s estimated NIL valuation topped $6.8 million in 2025-26, while most athletes earn far less through smaller local deals and social media sponsorships. These are real commercial contracts. An athlete who agrees to post content or sign autographs can be held to those terms like any independent contractor.
Athletes generally must disclose NIL agreements worth $600 or more to their school, and the compliance office reviews each deal against institutional and conference policy. The Sports Agent Responsibility and Trust Act adds federal rules for any agent representing a student-athlete: the agent must provide specific written disclosures before signing a contract and must notify the athlete’s school within 72 hours of the deal.4Federal Trade Commission. FTC Seeking Information from Universities on Sports Agents Compliance with Law Aimed at Protecting Student Athletes Agents cannot give athletes anything of value before a contract is signed or make false promises during recruitment.
Athletic Scholarships and Cost of Attendance Stipends
The oldest form of institutional pay is the athletic scholarship, formally called a Grant-in-Aid. A full scholarship covers tuition and fees, room, board, and course-related books. At an expensive private university the total cost of attendance now approaches $100,000 a year, so a full ride at a school like USC or the University of Chicago carries enormous economic value before any NIL or revenue-sharing money is added. Division I and II schools award nearly $4 billion in athletic scholarships each year across more than 196,000 athletes.5NCAA. Scholarships
Many schools in the major conferences also pay cost of attendance stipends on top of the scholarship, in cash, for transportation and personal expenses the standard scholarship does not reach.6NCAA. Autonomy Schools Adopt Cost of Attendance Scholarships The stipend amount varies by campus based on the school’s calculated local cost of living.
One risk to know about: entering the transfer portal can put a scholarship at risk. Once an athlete notifies their school of intent to transfer, the school can cancel or reduce athletically related financial aid for the next term and any term after it, and it is not obligated to take the athlete back.7NCAA. Division I: Notification of Transfer An athlete who transfers can receive aid immediately at a new school if offered, but there is no guarantee of equal terms.
Academic Achievement Awards
The Supreme Court’s unanimous 2021 ruling in NCAA v. Alston opened another payment channel. The Court upheld an injunction barring the NCAA from capping education-related benefits, including cash awards for academic achievement. Schools can pay athletes up to $5,980 per year for meeting academic milestones such as maintaining a certain GPA.8Supreme Court of the United States. National Collegiate Athletic Assn. v. Alston Many athletic departments now pay the full amount to every eligible athlete who meets basic academic requirements, typically distributing funds at the end of each semester once grades are verified. For schools that opted into the House settlement, the first $2.5 million spent on Alston awards counts against the revenue-sharing cap.2NCAA. Question and Answer: Implementation of the House Settlement
Taxes on What Athletes Earn
Both NIL income and revenue-sharing payments are treated as self-employment income for tax purposes, not W-2 wages.9Internal Revenue Service. Name, Image and Likeness (NIL) Income Athletes receive a Form 1099-NEC from any payer that sends them $600 or more during the year and report that income on Schedule C of their Form 1040.10Internal Revenue Service. Instructions for Forms 1099-MISC and 1099-NEC No taxes are withheld when the money hits the account, so the full amount looks like profit until tax season.
An athlete with at least $400 in net self-employment income for the year must file a federal return and pay self-employment tax, which covers Social Security and Medicare at a combined 15.3% rate on top of regular income tax. Athletes earning enough may also need to make quarterly estimated payments on Form 1040-ES to avoid a large year-end bill and underpayment penalties. A reasonable rule of thumb is to set aside 25-35% of each payment for taxes, depending on total income.
Scholarships follow different rules. Funds used for tuition, required fees, books, supplies, and equipment are generally tax-free for a degree-seeking student. Room and board covered by the scholarship are typically taxable, and cost of attendance stipends paid in cash are also taxable income.11Internal Revenue Service. Topic No. 421, Scholarships, Fellowship Grants, and Other Grants
International Athletes on F-1 Visas
International athletes on F-1 student visas cannot participate in most of this the way their American teammates can. Federal immigration law strictly limits employment for F-1 students, and the definition is broad enough to cover most NIL activities performed in the United States.12U.S. Citizenship and Immigration Services. Employment An athlete who signs a deal to post sponsored content, appear at a signing event, or film a commercial is performing compensated services, which counts as unauthorized employment without proper work authorization.
The narrow exception is truly passive income such as royalties, where a company pays solely for the right to use the athlete’s name or image without requiring any active promotional work. If payment is conditioned on the athlete doing something, it crosses from passive income into unauthorized employment. Consequences include loss of visa status, potential deportation, and disqualification from future immigration benefits, including the P-1 visa used by professional athletes. Any international student-athlete considering an NIL opportunity should work with the school’s international student office and an immigration attorney before signing.
Are College Athletes Employees?
Getting paid is not the same as being an employee, and that legal question is still unresolved. In Johnson v. NCAA, the Third Circuit established a test for whether athletes qualify as employees under the Fair Labor Standards Act, looking at whether they perform services primarily for the school’s benefit, under the school’s control, in exchange for compensation. The case has not reached a final resolution. If athletes were ultimately classified as employees, they would be entitled to at least the federal minimum wage of $7.25 per hour and potentially overtime pay.13U.S. Department of Labor. Minimum Wage
At the federal labor board, a 2021 NLRB General Counsel memo asserting that certain college athletes are employees under the National Labor Relations Act was rescinded in February 2025.14National Labor Relations Board. NLRB General Counsel Jennifer Abruzzo Issues Memo on Employee Status of Players at Academic Institutions An executive order issued in July 2025, titled “Saving College Sports,” directed the Department of Labor and the NLRB to clarify athlete status in a way that emphasizes the educational mission of college athletics, and Congress has considered legislation that would explicitly prohibit classifying student-athletes as employees. For now, the House settlement’s revenue-sharing model gives athletes direct payments without formally classifying them as employees.