What the NCAA Settlement Means for Them

This summer, a federal judge approved the House v. NCAA settlement, marking a major shift in college sports: For the first time, Division I schools can now directly pay their athletes.

Under the new rules, current athletes will share roughly $20 million in annual revenue, while former athletes—those who played between 2016 and 2024—may be eligible for backpay totaling around $2.8 billion.

“It’s a big change from the way college athletics has operated,” said Mit Winter, an attorney at KennyHertz Perry.

What Does This Change Mean for College Athletes?

Until now, college athletes could earn money from companies by using their name, image, and likeness (NIL). That income usually came through boosters or NIL collectives.

“College athletes have been able to receive NIL compensation since July 1, 2021, said Winter. “Since then, most of the NIL compensation paid to athletes has come from boosters, and what are known as NIL collectives, which are basically groups of boosters at a school that got together and formed a company that then contracted with athletes to pay them for their NIL rights.”

Trevor Kent, 26, a former football player at Northwestern University from 2017 to 2022, went to college on a full-ride scholarship and had never expected to receive compensation for playing.

“I think people always talked about [getting paid]… But we never talked about it, like in the format it is now, where guys are getting actual salaries,” said Kent.

In 2021, when players could start profiting off their NIL, Kent said that he didn’t reap many of the benefits of the change either.

“When those rules changed, they were really not well understood,” said Kent. “I remember we had a couple of guys on our team get sponsorships, and we got some free food from local restaurants, but it was still kind of a grey area—do we need to sign a contract? What’s allowed?”

Now, athletes will receive compensation not only for their NIL rights but will also receive a portion of ticket and media revenue from schools.

When Will College Athletes Start Getting Paid?

Although the settlement has been approved, there’s still some uncertainty about what happens now. While some current athletes are already being paid, former athletes may have to wait a while to receive back pay.

According to Winter, the $20 million that schools can divvy up annually among current players will primarily go towards male athletes.

“Schools are going to pay around 90% to 95% of that money to their men’s football and basketball players. The remaining 5% to 10% to other sports, and that varies by school,” said Winter.

Winter says that current players should be prepared to pay taxes on the income they receive. College athletes are still not considered employees of the college, and, therefore, will not receive 1099 forms.

“They [the college] are not taking out taxes, so don’t go spend it all because you’re gonna have to pay taxes on it, and invest it,” said Winter.

As for former college athletes, most of the $2.8 billion backpay is also expected to go towards male players. Former athletes are expected to receive annual payments spread out over the next ten years.

Kent says that of the former players he knows who were on scholarship, the backpay settlement amounts range from roughly $80,000 to $160,000 per player. However, since the settlement has been subject to numerous appeals, back-payments are stalled until the appeals are decided, which could be a year or more, according to Winter.

“It still has all the legal hurdles to jump through, so it’s going to be a couple of years before it all passes… It’s nice to have and you’re slightly rewarded for some of the efforts you put in [during] college,” said Kent. “Sure, I’ll take it, but compared to the starters who are getting $100,000 now…”

The Bottom Line

Under the House settlement, current Division I players can now be paid directly by colleges, though they will not be considered employees. For current athletes, it’s best to set aside some money, as taxes have not been taken out of those payments.

Some former college athletes may be eligible for back damages as well, but it could take these players many years to receive payment due to the number of outstanding appeals. Winter also suggests that these players exercise caution when it comes to companies that promise to purchase athletes’ settlement claims

“They’ll say, we know you’re going to be owed $100,000 over a 10-year period. We’ll pay you 10% up front, and we get to collect your checks over that 10-year period,” said Winter. “Really think long and hard about entering these types of deals before you do it. From a financial perspective, it may not be in your best interest.”