On Athletes and Aid

Report shows that institutions in NCAA Division III, which does not allow athletics scholarships, need reminder to follow cardinal rule.
June 29, 2011

Institutions in Division III of the National Collegiate Athletic Association are barred from awarding any financial aid tied to students' athletic ability. Officials at these institutions have long argued that their adherence to this strict rule allows them to offer a purer form of college athletics whose participants are treated more or less identically to their non-athlete peers. But a new NCAA report shows that some institutions continue to violate what is often called Division III’s “bedrock principle.”

The report finds that 10 institutions violated the division’s financial aid regulations in 2010-11. Five of those colleges were found to have considered athletics participation in the awarding of leadership grants. The others were revealed to have had an unjustified difference in how they awarded aid to athletes and non-athletes. This is the highest number of violators since 2007-8, when 12 institutions were found to have committed financial aid violations.

In 2004, Division III membership adopted an annual reporting process that requires all institutions to compare the financial aid packages of freshman and transfer athletes with the aid packages of freshman and transfer non-athletes.

“The prohibition of using athletics ability in the financial aid packaging process is a cornerstone of Division III,” said Dan Dutcher, NCAA Division III president. But before the new system was put in place, he said, "there was no formal mechanism in place by which institutions or conferences or the NCAA as a whole could determine whether or not institutions were complying with that tenet. That’s really what the financial aid reporting process was there to address. There had been rumors that student-athletes were benefiting from aid, and others didn’t believe that. But we had no data to show either way.”

Once institutions submit their financial aid data to the NCAA, the information is reviewed to find statistical outliers on any of the following measures: “the difference in the proportion of financial need met by institutional gift aid between student-athletes and other students,” “the proportionality test comparing the proportion of student-athletes in the cohort to the proportion of overall institutional gift aid awarded to them” and “the proportion of financial need met by institutional gift aid for sport groups as compared to other sports groups and/or other students.” Other triggers may garner an institution more attention from the NCAA as well.

If an institution's data raise flags on any of these criteria, it may receive a second round of review, during which it must “justify any perceived inequities in financial aid packaging that appear to benefit student-athletes.” In the six years of the financial aid reporting program, from 2005-6 through 2010-11, 126 cases have been forwarded to this second round of review -- approximately 29 percent of Division III members.

From here, the NCAA determines if a violation has occurred and metes out penalties accordingly. In the six years of the program, 55 institutions were found to have violated Division III’s financial aid rules -- about 13 percent of the division’s membership. Five institutions have been referred for enforcement action twice.

Most of these violations are considered “secondary” by the NCAA. Dutcher said he believes there is a still a “communication problem” between athletics and financial aid officials at some Division III institutions about what can and cannot be considered when awarding aid to athletes. In other words, he said he believes most of these institutions “inadvertently” broke the rules and are learning from their mistakes. Institutions that commit “secondary” violations of the division’s financial aid regulations have not been reported publicly.

But there have been six “major” violators of these regulations over the life of the reporting process, and these institutions do face public scrutiny. Violations by Buffalo State College, the State University of New York at Geneseo, and the State University of New York at Potsdam were the result of an unjustified proportionality difference between the amount of financial aid awarded to athletes and the percentage of athletes in the overall student population. Chatham University and Hobart College showed distinguishable and unjustified patterns of award that benefited athletes. Fontbonne University's violation took the form of coaches "rating" incoming freshman athletes as the first step in the institutional financial aid process.

Despite these violations and those noted in the new report, Dutcher said that he is ultimately encouraged by what he sees in the division, and that he believes its members strongly support its ban on athletics-related aid. But this has not always been clear in recent years.

Three years ago, after seriously considering splitting into scholarship and non-scholarship subdivisions, Division III's members decided to stay together. However, a 2008 survey revealed that nearly two-thirds of the surveyed members of the division responded that “consideration of leadership in athletics (e.g., team captain) in the awarding of financial aid should be allowed provided it is consistent with the consideration of leadership in other student activities.” Division III leaders eventually decided that awarding such aid was not in the division’s best interest, and the idea has not been seriously considered in the years since.

“We just haven’t seen a groundswell of folks demanding that they be able to look at athletics in consideration with leadership awards,” Dutcher said. “Ultimately, I think the division is in a strong place right now.”

Still, some Division III officials say the NCAA should invest in more preventative education to bring down the number of violators.

“One of the challenges is an educational one -- how best to get these reports and other information about financial aid to the right people at the schools,” Sue Gaylor, a member of the Division III Financial Aid Committee and vice president for administration and planning at Lycoming College, told the NCAA News. “Presidents are concerned about this but it may not be on their day-to-day radar. Coaches certainly are living this in terms of recruiting students, but they’ve got their minds on other things, as well. So it’s key for us to get this information in the right hands, particularly for schools that might be at risk for falling into one of these categories.”


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