Yes, Division 1 athletes do get paid, and in more ways than at any point in college sports history. They can sign endorsement and sponsorship deals with outside companies through Name, Image, and Likeness rules that took effect in July 2021. Starting with the 2025-26 academic year, their schools can also pay them directly out of athletic revenue under the House v. NCAA settlement, up to an institutional cap of $20.5 million. On top of that, athletes still receive scholarships, cost-of-attendance stipends, and academic achievement awards. What a top football or basketball player earns in a year can now reach seven figures; a walk-on in a non-revenue sport may receive little beyond a partial scholarship.
Direct Payments From the School Under the House Settlement
The biggest change to the pay picture arrived on June 6, 2025, when a federal judge granted final approval to the House v. NCAA settlement. For the first time, Division 1 schools that opt in can pay athletes directly from athletic revenue rather than only through scholarships or academic bonuses. The institutional cap for 2025-26 is $20.5 million, rising about 4 percent per year to an estimated $21.3 million in 2026-27.1NCAA. Question and Answer – Implementation of the House Settlement
That cap applies to the whole athletic department, not to any single athlete. Each school decides how to divide the money among its sports and players. The first $2.5 million a school pays out in Alston academic achievement awards counts against the cap.1NCAA. Question and Answer – Implementation of the House Settlement Full cost-of-attendance scholarships and other benefits already permitted before the settlement are generally excluded.2National Conference of State Legislatures. What the NCAA Settlement Means for Colleges and State Legislatures
The settlement also includes roughly $2.8 billion in backpay for athletes who competed between 2016 and 2024 and were shut out of NIL money during those years. Those payments go out over ten years, with the NCAA covering 60 percent from its reserves and member schools covering the rest. Most estimates suggest football and men’s and women’s basketball players will receive the overwhelming majority of backpay funds.
Title IX looms over every revenue-sharing plan. A distribution that sends 75 percent of payments to football and 15 percent to men’s basketball creates an obvious gender imbalance, and schools receiving federal funding must provide equal financial opportunities regardless of sex. Some legal commentators have suggested proportional distribution tied to student body demographics as one compliance path. Schools are still working out the details.
Name, Image, and Likeness Deals
On June 30, 2021, the NCAA adopted an interim policy that suspended its longstanding ban on athletes profiting from their own name, image, and likeness.3NCAA. NCAA Adopts Interim Name, Image and Likeness Policy That change opened the door to endorsement deals, personal merchandise lines, paid appearances, and social media sponsorships. The money comes from third-party businesses and brands, not the school, so NIL income functions more like freelance earnings than a paycheck.
NIL collectives have become the biggest funding channel for many athletes. Formed by boosters and alumni, these organizations pool money and connect players with marketing opportunities. Some sign athletes to recurring payment plans in exchange for community appearances or social posts. For a star quarterback, those deals can reach seven figures a year. For a track athlete with a modest social media following, a collective arrangement might pay a few hundred dollars a month.
Compensation tracks the athlete’s visibility and commercial appeal, not the sport’s revenue. A gymnast with a million social media followers may out-earn a starting offensive lineman in NIL deals. Local fame drives smaller partnerships with hometown businesses; national recognition attracts corporate sponsors willing to pay six figures for a single campaign.
Athletes must report any third-party NIL deal worth $600 or more to the NCAA’s NIL Go platform, generally within five business days of agreeing to terms. State laws add another layer, and many states prohibit deals involving gambling, alcohol, tobacco, or adult entertainment. Schools assign compliance officers to review contracts before small problems turn into eligibility problems.
Scholarships and Cost-of-Attendance Stipends
Scholarships remain the financial foundation for most Division 1 athletes. A full athletic scholarship covers tuition, mandatory fees, room, board, and required textbooks.4NCAA. Student-Athlete Core Guarantees At a private university charging $60,000 or more in annual tuition, that package is significant compensation even though it never reaches the athlete as cash.
Not every scholarship is a full ride. Division 1 sports fall into two categories that determine how aid is awarded:
- Headcount sports require every scholarship to cover the full cost of attendance. These include FBS football (85 scholarships), men’s basketball (13), women’s basketball (15), women’s volleyball (12), women’s gymnastics (12), and women’s tennis (8).
- Equivalency sports let coaches divide a set number of scholarship equivalencies among more athletes. A baseball program with 11.7 equivalencies might give partial scholarships to 25 or more players, each covering a different percentage of expenses.
Most major-conference schools also pay a cost-of-attendance stipend on top of the base scholarship. That cash payment covers incidentals the scholarship doesn’t address, such as travel home and personal supplies.5NCAA. Autonomy Schools Adopt Cost of Attendance Scholarships The amount varies by school because it’s tied to each institution’s federally calculated cost of attendance. Athletes receive these funds as direct deposits.
Academic Achievement Awards
The 2021 Supreme Court ruling in NCAA v. Alston opened another payment channel. The Court held that NCAA rules limiting education-related benefits violated federal antitrust law. Schools can now pay athletes up to $5,980 per academic year for meeting grade point average benchmarks, hitting degree milestones, or other classroom achievements.6NCAA. House Settlement – Opting In
Delivery varies by school. Some write checks split into two payments a year. Others deposit the funds into a trust the athlete can access only after graduating, which creates an incentive to finish the degree. For athletes carrying federal student loans, the payments may go directly toward that debt instead of arriving as cash.
The Alston ruling also permits unlimited education-related benefits beyond the $5,980 cash cap. Schools can fund graduate school tuition, study abroad, paid internships, computers, and tutoring with no dollar ceiling. Not every athletic department funds the full package, but at well-resourced programs it is standard.
Taxes You Will Owe
Here is where many athletes get blindsided. NIL income is taxable, and the IRS treats athletes earning it as independent contractors, not employees.7Internal Revenue Service. Name, Image and Likeness Income That classification triggers self-employment tax on top of regular income tax, and no one withholds anything from those payments before the athlete receives them.
If you earn at least $400 in NIL income during the year, you must file a tax return and pay self-employment tax.7Internal Revenue Service. Name, Image and Likeness Income The self-employment rate is 15.3 percent, covering both halves of Social Security (12.4 percent on earnings up to $184,500 in 2026) and Medicare (2.9 percent with no income ceiling).8Internal Revenue Service. 2026 Publication 15-A That sits on top of regular federal and state income tax, so an athlete in a 22 percent federal bracket who earns $50,000 in NIL deals effectively owes around 37 percent combined before state taxes.
Because no employer withholds from NIL payments, athletes generally need to make quarterly estimated tax payments to the IRS. The deadlines are April 15, June 15, September 15, and January 15 of the following year.9Internal Revenue Service. Estimated Tax Missing them triggers underpayment penalties. NIL earnings and related business expenses are reported on Schedule C, filed with Form 1040.
Non-cash compensation counts too. If a company gives you merchandise, gift cards, or free products in exchange for promotion, the fair market value of those items is taxable income.7Internal Revenue Service. Name, Image and Likeness Income Many athletes forget this and end up with unexpected tax bills.
Why International Athletes Face Different Rules
International athletes on F-1 student visas face a separate set of restrictions that sharply limit their ability to earn NIL income. Federal immigration law caps F-1 holders at 20 hours per week of on-campus work while school is in session, with very limited exceptions for off-campus employment.10eCFR. 8 CFR 214.2 – Special Requirements for Admission, Extension, and Maintenance of Status Unauthorized employment can mean visa termination, deportation, and the inability to get future visas.
The key distinction is between active and passive income. If a deal requires the athlete to do anything to get paid, such as filming a commercial, making a social media post, or signing autographs, that counts as active income and likely violates visa restrictions. Even a single repost of a sponsor’s content can cross the line. Passive income is generally allowed: licensing your likeness for a video game, letting a company use an existing photo on a billboard, or collecting royalties from jersey sales typically doesn’t count as employment because the athlete isn’t performing new work. International athletes should work with both their school’s compliance office and an immigration attorney before signing anything.
Are College Athletes Legally Employees
Not currently, though the question keeps coming up. In September 2021, NLRB General Counsel Jennifer Abruzzo issued a memo arguing that certain college athletes meet the legal definition of employees under the National Labor Relations Act.11National Labor Relations Board. NLRB General Counsel Jennifer Abruzzo Issues Memo on Employee Status of Players at Academic Institutions Acting General Counsel William Cowen rescinded that memo on February 14, 2025, signaling that current NLRB leadership does not intend to pursue the employee classification theory.12National Labor Relations Board. GC 25-05 Rescission of Certain General Counsel Memoranda
The one concrete unionization attempt reinforces the current status. In March 2024, the Dartmouth men’s basketball team voted 13-2 to form a union affiliated with SEIU Local 560.13National Labor Relations Board. Trustees of Dartmouth College The union withdrew its petition on December 31, 2024, before the result could be certified, reportedly to avoid an unfavorable ruling. That case is closed, leaving no active precedent for college athlete unionization. Federal courts have also reached conflicting conclusions on whether athletes qualify as employees under the Fair Labor Standards Act for minimum wage purposes, and no Supreme Court decision has settled it.
The practical result: Division 1 athletes still do not receive W-2 wages, earn overtime, or get standard employer benefits like retirement contributions through their athletic participation. Revenue sharing under the House settlement is structured as a benefit rather than an employment payment, specifically to preserve the current classification. With billions now flowing to athletes, that distinction is under more pressure than ever.