More Money ... If You Can Play Ball

NCAA rules about "cost of attendance" create a new way for universities to compete for athletes, but these changes in financial aid calculations don't appear to be helping non-athletes.

August 12, 2015
Tim Murphy | Flickr

Some colleges and universities that play big-time intercollegiate sports are sharply increasing the federally defined cost of attendance for students at their institutions this year -- letting them provide several thousand more dollars in stipends for scholarship athletes, but resulting in little if any additional funds for other students.

The maneuvering is an outgrowth of the January vote by the National Collegiate Athletic Association's five wealthiest sports conferences to increase the value of athletic scholarships to include the full cost of attendance. Athletes receiving a full scholarship to play on a college team can now also receive a stipend to cover the difference between that scholarship and the various other expenses that accompany being a college student, such as paying for food, laundry and travel.

This summer, some institutions adjusted their cost of attendance figures just as those estimates suddenly became useful as a recruiting tool. And financial aid analysts are worried that athletics departments are now improperly influencing those numbers to the benefit of revenue sport athletes, but the detriment of other students.

“It’s suspicious,” said Ellen Frishberg, a former college financial aid director and president of Executive Function, a higher education consulting firm. “Since you have to present the cost of attendance as the same to everyone, increasing it inflates the budgets for the entire population. That creates more financial need, which creates more loan eligibility, which could mean more debt for students, which is a very negative thing. They’re creating a huge amount of unmet need and funding it for some people and not for others.”

What colleges list as full cost of attendance is important, as it defines the limits of a student's available financial aid and figures significantly into determinations of how much aid a Pell Grant recipient is due and how much in federal loans a student is able to borrow.

The federal government provides guidance and tracks these figures, but allows college financial aid officers to determine what an appropriate estimate is for their institution, though colleges must justify those amounts in some way. The large variance among institutions -- owing to factors such as cost of living being different from one city or state to the next, for example -- has been mostly uncontroversial. That's changed now that cost of attendance has become part of the intercollegiate athletics arms race.

The decision to offer full cost-of-attendance stipends was an attempt by the NCAA's members to address rising criticism that colleges aren’t doing enough to help the students, many from low-income backgrounds, who help some institutions bring in millions of dollars in ticket sales and television contracts. It didn’t take long for coaches and athletic directors to see the recruiting possibilities the change in financial aid could offer.

Earlier this year, Nick Saban, head football coach at the University of Alabama, said he was concerned about the large discrepancies that existed between individual colleges' full cost-of-attendance numbers. Alabama’s full cost of attendance last year put the university in the middle of the Southeastern Conference, allowing athletes there to receive an annual stipend of $3,463. The University of Tennessee's and Auburn University’s stipends, meanwhile, both topped $5,000 per year. (Auburn's cost of attendance did not increase this year, but the amounts that make up the stipend increased by 108 percent in 2014.)

During the conference’s spring meetings in May, Saban called foul.

“You can't create a system that really can almost promote fraud,” Saban said. “Even in the NFL, they have a salary cap. When we don't have a cap that makes it equal for everybody, it really goes against everything we've tried to do in the NCAA that we've tried to do for parity.”

As it turns out, Saban didn’t have much to worry about. Soon after his comments, the University of Alabama increased its cost-of-attendance estimate, and with it the amount Saban’s players could receive as a stipend. Deborah Lane, a spokeswoman for the university, said the cost of attendance was estimated “using the same methods [the university] has always used,” though the increase was much higher than normal.

Alabama is now offering one of the largest stipends in college football: $5,386 each year to out-of-state athletes and $4,172 to in-state athletes.

Getting ‘Creative’ With Numbers

The push to give athletes a stipend to cover the full cost of attendance has been taking place for decades, but in recent years the concept has found stronger support. In 2003, the NCAA began allowing athletes to receive aid through Pell Grants and need-based scholarships. Five years later, the NCAA settled a lawsuit over the association’s practice of capping scholarship amounts. The settlement cost the NCAA $228 million.

In 2011, the NCAA’s Division I Board of Directors voted to adopt a $2,000 stipend that would cover an athlete’s full cost of attendance, but 125 Division I institutions then voted to override the decision, scuttling the increase.

By 2014, the NCAA continued to face a number of lawsuits over the issue, and pressure -- including from the U.S. Senate -- was building to find a way close the financial aid gap. Recent court rulings have added additional pressure by bolstering the idea that the NCAA violates federal antitrust law by capping scholarship amounts. Last August, the Division I Board of Directors voted to restructure how its members govern themselves, granting a greater level of autonomy to the five wealthiest conferences. The Atlantic Coast, Big Ten, Big 12, Pacific 12 and Southeastern Conferences could now make their own rules concerning a number of issues, and full cost of attendance was at the top of their list.

In January, the conferences voted to approve the stipends. All but one of the 65 institutions voted in favor of the change.

The NCAA estimated at the time that the stipends would increase aid amounts by about $2,500 per athlete, or about $30 million a year across all programs. It soon became clear the NCAA’s estimates fell short at many institutions, including most of the SEC and about half of the Big Ten.

So far, the stipends are mostly going to full-scholarship football, men’s basketball and women’s basketball players, with some other female athletes receiving them to ensure colleges aren't running afoul of Title IX considerations. In July, the NCAA announced that it would distribute $18.9 million across Division I, or about $55,000 per institution, to help colleges pay for the stipends. An NCAA spokeswoman this week referred all questions regarding the increases to individual institutions.

Some coaches who are fortunate enough to work at colleges that already listed higher full-cost-of-attendance amounts have not been coy about what those larger stipends could mean for recruiting. James Franklin, head football coach at Pennsylvania State University, now touts the fact that the university has one of the highest costs of attendance in the country.

“It’s something I’m going to be able to use in recruiting,” Franklin said during a “coaches caravan” stop in New York in May, according to the Pittsburgh Post-Gazette. “No different than when I put up the graduation rates of Penn State and every other school in the conference and then the graduation rates of Penn State and all the other schools I think we compete against nationally. I’m also able to do the same thing now with cost of attendance.”

While university officials are careful to frame any increases in cost of attendance as strictly a financial aid decision, football coaches have been less cautious in describing the larger stipends. “We’ve been very creative in getting our number to a good spot,” Mark Richt, head football coach at the University of Georgia, said to a crowd during UGA Day. In July, Richt told the Macon Telegraph that there were “some things that can be done in a creative way that is well within the rules that can get us in pretty good shape on that front.”

David Ridpath, professor of sports administration at Ohio University and president-elect of the Drake Group, said while colleges may be getting creative at the behest of coaches, Richt is likely correct in saying that no rules are being broken.

“I'm not going to say that it's nefarious or even unethical, but it obviously looks a little fishy,” Ridpath said. “I think these numbers could have even been adjusted before, but colleges didn't, because they were trying to keep the sticker price lower. There wasn't really a reason or benefit to doing that. Now from an athletics perspective, there is a benefit. Though I think that the benefits are overblown.”

‘A Tug-of-War’

Like Alabama’s Saban, Richt earlier expressed alarm over the danger of his institution offering stipends that were so much lower than those at institutions like Auburn, only to have the expected amounts increase before the start of the season. Last month, Georgia adjusted its cost-of-attendance figures, and the size of the gap that could be addressed by the stipend increased from $1,798 to $3,221 for in-state students and $3,743 for out-of-state students.

A Georgia spokeswoman said the university does not offer any academic scholarships for nonathletes that cover full cost of attendance, and financial aid experts interviewed for this story said that the cost categories that are increasing -- transportation and miscellaneous expenses -- are not typically covered by full-ride academic scholarships at many institutions.

How such a change would affect nonathlete students is not entirely clear, said Mark Kantrowitz, a leading financial aid expert, but it's not likely that they will benefit from the arrangement. Kantrowitz, senior vice president and publisher at Edvisors, said the stipends “certainly act as a recruiting tool,” and if colleges are artificially inflating cost of attendance figures to make those stipends larger, then nonathletes could shoulder the extra costs.

“If the overall aid a school's offering went up the same as a cost-of-attendance increase, then colleges are involving their financial aid in a recruiting shenanigan,” he said. “If the amount of grants and aid hasn't gone up, then schools are putting more burden on nonathletes. Either way, you've got a basis for criticism. In some cases that financial aid will be Pell Grants, in which case the student doesn't really care. But in other cases it may be loans, and that affects the affordability of the school and the debt students accrue.”

Georgia officials said its increase was a result of financial aid officers taking an overdue look at whether the numbers in those two categories were up-to-date and finding that they weren't. The transportation cost was figured by calculating the expense of four trips each semester to Warner Robins, a centrally located city in Georgia, for in-state students, and four round-trip flights to Chicago for out-of-state students. The miscellaneous expenses are based on the 2013 Consumer Expenditure Survey published by the U.S. Department of Labor, which includes estimated costs for clothing, laundry, cleaning supplies, entertainment and cell phone bills.

Janis Gleason, a spokeswoman for the university, declined to comment on the timing of the increase, but said that the “numbers are accurate and reflect the expenses incurred by our students.”

The increase at Alabama was also confined to the travel and miscellaneous categories of the cost-of-attendance budget, as was most of a $2,000 increase at Rutgers University, which is offering stipends between $4,100 and $4,900. Last year’s full cost-of-attendance estimates at Rutgers, according to the U.S. Department of Education, would have resulted in stipends of about $2,100.

Karen McCarthy, a policy analyst for the National Association of Student Financial Aid Administrators, said that it’s not uncommon for cost of attendance to fluctuate from year to year, but it is unusual to see such sudden and sizable increases in expense categories like travel. McCarthy said it’s possible that the recently increased interest in cost of attendance has simply prompted institutions to re-examine those estimates.

NASFAA is worried about the stipends being used as a recruiting tool, however, McCarthy said, and whether that is influencing financial aid decisions.

“We do have concerns about pressure from athletics on financial aid and the cost of attendance,” she said. “Ultimately, the responsibility for determining this is with the financial aid office, and there’s already pressure there to keep the numbers down to limit borrowing and to make sure students aren’t turned off by costs appearing too expensive. Now that this change has come through, coaches want to get in on those conversations as well.”

Mark Nagel, professor of sports and entertainment management at the University of South Carolina, said that unless the stipends become standardized in some way, full cost-of-attendance numbers could rise at other colleges.

“It could be a fascinating battle,” Nagel said. “For years most universities tried to keep their costs of attendance low, so they can say, ‘hey, we’re more affordable.’ Well, now you have the opposite, where you have the athletic department wanting the full cost of attendance to be as high as possible. It’s an interesting tug-of-war that’s really only just beginning.”


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