More college athletes, not just those who turn pro, are starting to make money. In June, the Supreme Court narrowly ruled in favor of college athletes, saying that as of July 1, they can benefit educationally from their prowess on the field. This is a blow to the NCAA, which claims its commitment to amateur sports is under threat.
Additionally, it may not be long before the Supreme Court joins a majority of states that are passing laws allowing college athletes to be compensated for the use of their name, likeness or likeness.
Many of the state bills include requirements for college student athletes to take a personal finance course, an eminently sensible idea, given the likelihood that athletes will suddenly have more money to manage than ever before. With the stroke of a pen, the NCAA can and should begin to encourage personal finance courses and ensure that all athletes in all states take them in high school.
We know that the sooner young people learn to manage their money, the better. Research finds that good financial habits established earlier in life are key to building financial fitness in adulthood. That’s one of the reasons there’s a push for more middle and high schools to offer personal finance classes.
However, an anachronistic NCAA policy actively discourages high school student-athletes from taking a personal finance course. To qualify for college scholarships, high school student-athletes must take core courses defined by the NCAA, and personal finance is not one of them. While courses in English and math are certainly valuable, so is a practical course in life skills like personal finance.
Student-athletes especially need to know how to pay themselves first, the power to compound returns, invest in the stock market, establish and manage credit, and avoid bank fees. And high school is the right time to teach these essential life skills BEFORE you set foot on a college campus.
Scholarship athletes at Power Five conferences today receive stipends between $2,000 and $5,000. With many states passing laws to allow athletes to be paid (five state laws went into effect July 1), many athletes will soon have money in their pockets as they promote themselves and earn sponsorship dollars. With the power of social media, those who can benefit in this way will not be limited to just star athletes.
It doesn’t matter if you’re Zion Williamson or a talented lacrosse player. You have to be smart with your money. My conversations with many high school teachers over the years have confirmed that the NCAA’s policy of not recognizing personal finance as a core course discourages students from taking it.
One teacher told me that she applied to the NCAA for her personal finance course to qualify as a foundation course, only to be told that the association’s guidelines don’t allow teaching about personal life topics like paying for college, types of credit, investments, insurance and budgets.
All those sad stories about professional athletes losing all their money are due in part to a lack of financial education. The NCAA can help address this with all college athletes simply by changing a harmful and short-sighted policy that doesn’t add up. After all, 98% of NCAA athletes never get a professional contract.
Tim Ranzetta is the co-founder of Next Gen Personal Finance, a Palo Alto, California, nonprofit startup dedicated to ensuring that by 2030 every high school student takes a personal finance course. He was a varsity athlete at the University of Virginia and grew up in New Jersey.