Full-cost-of-attendance scholarship debate could break up the FBS
Presidents at mid-majors consider the proposal tantamount to class warfare
NCAA tabled the issue in January, but power leagues will bring it up again
Could wealthiest Division I schools break off to form their own subdivision?
The NCAA Division I manual is 427 pages long. It contains an entire chapter about financial aid. It spends exactly one sentence defining the full grant-in-aid, more commonly known as the "full-ride" athletic scholarship.
A full grant-in-aid is financial aid that consists of tuition and fees, room and board, and required course-related books.
That sentence is at the heart of a debate that could radically redefine the top division in college sports. For years, doomsayers have predicted a scenario in which the wealthiest 50 or 60 schools compete only against one another. If such a scenario ever came to fruition, it would have its roots in the debate over the full-cost-of-attendance scholarship.
The problem, several university presidents told SI.com, is that the NCAA's idea of a full ride isn't quite full enough. According to figures schools supply to the federal government, the NCAA's definition of a full scholarship falls short of the full cost of attendance by several thousand dollars a year at most schools. In an age when conferences sign media rights deals that pay nine figures annually, some presidents believe schools should give athletes the actual cost of attendance rather than force them to make up the difference out of their own pockets. But those presidents have met fierce resistance from colleagues at schools lower in Division I's financial pecking order. The presidents at the mid-majors believe this is another blatant attempt by the wealthier schools to price the little guys out of the market.
The debate began in earnest last summer after a group of presidents at an NCAA retreat proposed a rule that would allow conferences to choose whether their schools could offer athletes up to a $2,000 annual stipend to help defray the difference between their athletic scholarships and the actual cost of attendance. The proposal came after a presentation that showed the exponential revenue growth in college athletics in the past generation. "They showed where it has been spent," Florida president Bernie Machen said. "It has been spent entirely on facilities and coaches' salaries. The amount spent on students has not increased at all after all this additional money has gone into college sports. That's just embarrassing."
The proposal never made it through the NCAA legislative cycle, though. In January, the NCAA Board of Directors tabled the issue. The board had approved the proposal in October, but more than 160 schools had requested an override. Schools that didn't enjoy the largesse of massive media rights deals considered the proposal nothing short of class warfare -- and ingenious class warfare at that. By couching it as a student welfare issue, the big-money schools had a moral upper hand.
Tulane president Scott Cowen isn't against the idea of athletes getting more. He is against the adoption of rules that make the maintenance of a Division I athletic program even more expensive. "Ours is a philosophical argument that says, from now on, if you're going to increase costs some place, then by God, reduce costs some place," Cowen said. "They never seem to reduce costs."
In the media, the cost-of-attendance stipends were equated with pay for play. Nebraska chancellor Harvey Perlman said that simply isn't the case. "I think we should go farther than $2,000," Perlman said. "I think the NCAA ought to allow us to give up to the cost of attendance, whatever it is. It depends on where you live, and how high-cost your institution is. For me, the line is we don't pay student-athletes to participate. We don't give them a wage. They're not employees. This is college. If they want to get a wage for doing it, they should go to the pros. But the cost of attendance, which is calculated by the institution for every student, creates that line."
Here's what Perlman means. When Nebraska officials calculated the cost of attendance for an out-of-state student planning to live on campus for the 2011-12 school year, they told the federal government that student would have to pay $19,848 in tuition and fees, $1,020 for books and supplies, $8,196 for room and board and $3,422 for miscellaneous expenses including travel home, clothing, laundry, etc. The total cost: $32,486. According to the NCAA's definition of a full scholarship, Nebraska would only be allowed to give an athlete $29,064. That $3,422 is not covered.
Arizona State president Michael Crow puts it another way. "I had one of those scholarships as an undergraduate, but it was an ROTC scholarship," Crow said. "Thirty-nine years ago, that scholarship paid me $100 month of spending money because that was the estimate then of what I needed to take care of my incidental expenses. And that was 39 years ago. This proposal is not dramatically different from that."
Washington president Michael Young said that when his school prepares academic scholarship packages, it bases the amount awarded on the cost-of-attendance figure it reports to the federal government. So a student on a full academic scholarship to Washington, he said, would receive more money than a student on a full athletic scholarship. Young also noted that the student on an academic scholarship can get a job, while employment opportunities for athletes are limited by available time and by NCAA restrictions. "The kids who are on solely need-based aid can basically work 20 hours a week or whatever and earn a little pizza money or earn a little money for tattoos or whatever they want," Young said, tongue planted firmly in cheek. "Our athletes, on the other hand, work 40-50 hours a week for the school, and they don't get anything except what these other kids get without having to work for it. It seems when one thinks about simple equity, from that perspective, it's hard to argue that these kids shouldn't get something."
This issue is not to be confused with the recent debate over whether schools should be allowed to award multiyear athletic scholarships instead of one-year, renewable ones. That proposal, which last month became NCAA law when an override attempt failed by two votes, allows schools to choose the term of the scholarship. While that issue also divided the schools, the division didn't hew strictly to financial lines. For example, Kansas State -- which reported $68.9 million in athletic revenue for the 2010-11 school year -- stood against the proposal, while wealthy departments such as Georgia and Nebraska supported it. The cost-of-attendance scholarship issue is different. The conferences that support giving schools the option to offer more scholarship money are the wealthiest, and the conferences that oppose the plan are the poorest.
The renewed push for full-cost-of-attendance scholarships, an issue that had arisen several times in the past two decades, came out of a Group of Six meeting last year. What is the Group of Six? It is the six BCS automatic qualifying conferences; in other words, the six wealthiest leagues. Given the option, the schools in those leagues could bump up every scholarship by a few thousand dollars without breaking a sweat. At the lower end of the Football Bowl Subdivision -- not to mention the rest of Division I that doesn't play the highest level of football -- such a cost increase could severely hamstring a program.
So those schools might choose not to offer the more valuable scholarships, thereby ceding yet another competitive advantage to schools that are nominally supposed to be competing on the same playing field. "This takes away from the current equity that exists for scholarships," Idaho president Duane Nellis said. "A scholarship at the University of Idaho again has the same value as at a BCS school. We're all for enhancing the welfare of our student-athletes, but this will create a significant inequity in the system. We believe that this violates the philosophy of the NCAA not to pay for play. It creates a significant advantage for the BCS conferences who have much more access to television revenue."
It also forces the have-not conferences to make deals that might negatively impact their athletes. "The TV contracts and the TV distribution scheme have thrown so much out of whack," East Carolina chancellor Steve Ballard said. "It leaves most schools -- certainly all the ones in our conference -- out in the cold. Worse than that, it creates an incentive for doing the wrong things. It creates an incentive for us to accept TV contracts that make our student-athletes play on a Tuesday night, travel 3,000 miles, get home at six in the morning. And then we ask them to go to class on a Wednesday. It's the wrong thing to do. That set of incentives, where everybody has to look for the next million dollars just to hope to keep reasonably competitive, that's what's happened to college sports in the last generation that's so wrong."
At the wealthier schools, the resistance to a rule that provides an option -- rather than a requirement -- is particularly vexing. "A lot of people want to be Division I who don't want to do Division I," Georgia president Michael Adams said. "That creates a real and growing disparity among the Division I members. It is now at the surface of most of the quote-unquote political decisions that get made."
Nebraska's Perlman, who fancies himself a deregulator, has a solution. If schools don't want to pay the extra scholarship money, they shouldn't. But he would ask that they not bother trying to stop other schools from paying it. Because no matter how much the NCAA regulates spending, the wealthy schools will find ways to use their wealth to their advantage. "You can tell me that I can't give them bagels with cream cheese and I can't give them more scholarships and I can't do this and I can't do that, and I follow those rules," Perlman said. "But then what I do to recruit competitively is I spend the money on other stuff. So I build facilities where there is no limit on what I can do, and I make those facilities far beyond what normal students live in because there's no limit on that. There's a standard understanding about regulatory environments that if you regulate something, people will move to the part of their activity that isn't regulated."
Perlman's scenario isn't a hypothetical. That is exactly what the wealthier schools have done and will continue to do. So what will happen as the gulf between the haves and the have-nots grows wider? Division I football already is split into the FBS and the FCS. Will the wealthy schools break off and form their own division?
"We've allowed Division I to become too large," Kansas State president Kirk Schulz said. "We've brought in a lot of schools to Division I that probably simply don't have the financial backing to successfully compete. But since it's a pure democracy -- one school, one vote -- we've got a ton of schools that are kind of barely hanging on financially, and they say, 'I can barely pay the bills now; doing this means I'm really in deeper financial trouble.' This is going to drive a bit of a wedge between your BCS-level programs and the others."
Georgia's Adams said this issue is not unique to Division I. He noted that he served on a committee several years ago that explored the possibility of subdividing Division III because of a gulf between the wealthiest programs and the poorest. Kansas State's Schulz believes more divisions aren't the answer. Instead, he would like to see schools place themselves in the division that best suits their finances. "I don't know if we need more divisions or if we just need to tighten up what it means to be a Division I school," Schulz said. "I would probably be more in favor of doing that than I would adding another division."
No matter what, something will have to change. The cost-of-attendance scholarship debate exposed the width of the gap in the FBS, and it promises to do so again when the wealthier schools bring the issue back for further discussion. At some point, the presidents will have to decide how big the gulf can grow before the haves and have-nots are playing entirely different games.
"Maybe [the five richest conferences] become an entity unto themselves, and there's another group that is the others," Tulane's Cowen said. "It's hard for me to see how the current structure of the FBS can sustain itself long into the future. Now, it may not change in the next three years or five years, but if you go out 10, 15 years, it's hard to believe it will be sustainable."