Yes, colleges do pay athletes, and in 2026 they pay them through four separate channels: direct revenue-sharing checks from the athletic department, name, image, and likeness (NIL) deals with outside companies, athletic scholarships, and academic achievement bonuses. Division I schools that opt in can now share up to $20.5 million a year directly with their players under the House v. NCAA settlement, a system that would have violated NCAA rules just a few years ago.
Direct Pay From the School
The biggest change is that schools themselves can now write checks to athletes. The House v. NCAA settlement received final court approval on June 6, 2025, and it lets participating Division I schools distribute up to $20.5 million per year in direct payments to their athletes.1NCAA. DI Board of Directors Conditionally Approves House Settlement-Related Rules Changes That figure is roughly 22 percent of the average Power Five school’s yearly athletic revenue and is projected to reach approximately $33 million per school by the 2034–35 academic year.2NCAA (via S3 Bucket Host). Plaintiffs Notice of Motion and Motion for Preliminary Settlement Approval More than 150 NCAA rules had to be eliminated to make it possible.
Participation is optional. Schools that opt in decide internally how to split the pool across sports and across individual athletes, so a starting quarterback and a swimmer at the same school will not receive equal shares. Schools that skip revenue sharing continue under the older scholarship-and-Alston-only model.
The settlement also scrapped sport-by-sport scholarship limits and replaced them with overall roster limits, so participating schools can offer scholarships to any athlete on the roster rather than being capped by sport.3NCAA. DI Board of Directors Formally Adopts Changes to Roster Limits
One important timing note: the first scheduled revenue-sharing payments were deferred after eight female athletes filed an appeal on June 11, 2025, arguing that the settlement’s distribution formula violates Title IX. That appeal was still pending heading into 2026, so when athletes actually see their first checks depends on how quickly it resolves.
NIL Deals With Outside Companies
Name, image, and likeness money was the first form of legal compensation, and it still accounts for a large share of what athletes earn. The NCAA suspended its rules against athletes profiting from their personal brands on July 1, 2021, after multiple states passed laws forcing the issue. Athletes can now sign endorsement contracts, promote products on social media, make paid appearances, and sell autographs without losing eligibility.
NIL money does not come from the school. It comes from outside brands, local businesses, and donor-backed organizations known as collectives, which pool contributions from wealthy boosters and channel them to athletes, often in ways tied to recruiting. Because these are private contracts between the athlete and a third party, the school has no payment obligation.
The amounts vary enormously. A walk-on softball player might make a few hundred dollars from a local car dealership. A starting quarterback at a football powerhouse can sign seven-figure deals. Most athletes fall closer to the low end, and many earn nothing at all.
Scholarships and Alston Academic Payments
Traditional financial aid is still the foundation. A full Division I scholarship covers tuition, fees, room, and board. Schools in the top conferences typically add a cost-of-attendance stipend for expenses like transportation, supplies, and personal costs, and the stipend’s value varies by campus.4NCAA. Autonomy Schools Adopt Cost of Attendance Scholarships
Schools can also pay athletes up to $5,980 per year for hitting academic benchmarks. These are called Alston payments, after the 2021 Supreme Court decision in NCAA v. Alston, which struck down the NCAA’s limits on education-related benefits.5Supreme Court of the United States. National Collegiate Athletic Assn. v. Alston The cap is tied to the maximum academic-achievement award a school can give a non-athlete student, and it has not moved since the ruling. The House settlement did not change the Alston amount, but the first $2.5 million a school spends on Alston awards now counts against its revenue-sharing pool.6NCAA. Question and Answer – Implementation of the House Settlement Schools that stay out of revenue sharing can still offer Alston payments on their own.
Back Pay for Former Athletes
The House settlement also compensates athletes who competed before direct payments were legal. The NCAA and the five major conferences agreed to pay approximately $2.8 billion into a settlement fund, paid out over ten years, to former athletes who played under the old rules.2NCAA (via S3 Bucket Host). Plaintiffs Notice of Motion and Motion for Preliminary Settlement Approval
The fund has two parts. Roughly $1.976 billion compensates athletes whose NIL rights were used without payment, covering broadcast appearances, video game likenesses, and third-party NIL use. The remaining $600 million addresses claims that athletes were denied fair compensation for their athletic services. Football and men’s and women’s basketball players receive the large majority of the back damages, since those sports generated the revenue underlying the claims. Athletes in other sports get smaller shares, and that allocation is what triggered the Title IX appeal now delaying the forward-looking payments.
What Athletes Owe in Taxes
Compensation comes with a tax bill that surprises a lot of athletes. The IRS treats NIL income as taxable and classifies athletes who earn it as independent contractors rather than employees of the company paying them.7Internal Revenue Service. Name, Image and Likeness (NIL) Income Nothing is withheld at the source, so an athlete who earns $50,000 in NIL deals owes the full income tax and self-employment tax on that amount at filing time.
The self-employment tax kicks in at just $400 in net NIL earnings.8Internal Revenue Service. Self-Employment Tax (Social Security and Medicare Taxes) Income gets reported on Schedule C, and the combined employer-and-employee share of Social Security and Medicare adds 15.3 percent on top of regular income tax. Any company paying an athlete $600 or more must issue a 1099-NEC.7Internal Revenue Service. Name, Image and Likeness (NIL) Income
Athletes with significant NIL income also need to make estimated quarterly tax payments during the year, because no employer is withholding for them. Missing those deadlines triggers underpayment penalties. Legitimate business expenses can be deducted on Schedule C, including agent fees, travel for promotional appearances, and costs of maintaining a social media presence used for NIL work.
How direct revenue-sharing payments will be taxed is still unsettled. If schools treat the payments as employee wages, they will withhold income and payroll taxes like any employer. If the payments are treated as independent contractor income instead, athletes face the same self-employment tax burden they already carry on NIL earnings.
International Athletes on F-1 Visas
If you are an international student-athlete, the compensation picture is very different. Most NIL activity qualifies as unauthorized employment under federal immigration law, because the F-1 visa allows study but not work, and the definition of employment is broad enough to cover creating social media content, making appearances, or signing autographs for pay.
The Department of Homeland Security has not issued formal guidance since 2021, when a Student and Exchange Visitor Program spokesperson said the agency was still assessing the situation. Truly passive income, such as royalties for granting a company permission to use a likeness with no further involvement, may fall outside the employment definition, but the line is unclear and DHS is expected to read “work” broadly. Revenue-sharing payments raise the same question if they are classified as compensation for athletic services. Until DHS issues guidance or Congress acts, international athletes have limited practical access to the new compensation landscape.
The Unresolved Employee Question
Getting paid is not the same as being an employee. A separate line of cases is asking whether college athletes should be treated as employees under the Fair Labor Standards Act or the National Labor Relations Act, which would give them minimum wage protection, overtime, and the right to unionize. In July 2024, the Third Circuit ruled in Johnson v. NCAA that college athletes can potentially qualify as employees under the FLSA, splitting with earlier decisions from the Seventh and Ninth Circuits.9Justia Law. Johnson v. The National Collegiate Athletic Association, No. 22-1223 The National Labor Relations Board separately ruled in early 2024 that Dartmouth’s men’s basketball players were employees, and the players voted to unionize; Dartmouth has appealed. A related NLRB complaint targets USC football and basketball players.
If employee status ultimately sticks, athletes could gain minimum wage, overtime for work beyond forty hours per week, workers’ compensation coverage for sports injuries, and collective bargaining rights. Schools could also face back-pay claims. None of that is settled law yet, and the outcome will shape whether the payment channels described above eventually sit inside a full employment relationship or stay separate from it.