Key Points About Outside Scholarships

The end of the school year will be arriving before we know it, bringing with it graduations and awards ceremonies where many scholarships will be awarded to high school seniors to help pay for their college education.

For those students who will be playing a sport at an NCAA Division I or II university, it will be important to remember some key points if they receive one of these scholarships from their high school, local civic club, parent’s employer, or other organization.  Local organizations providing these scholarships should also keep these key points in mind.

The NCAA considers any financial aid for an athlete that comes from a source other than their family, or the college or university they are attending, to be “aid from outside sources.”  This “aid from outside sources” is classified into three categories.  Those three categories are:

  • No relationship to athletics ability;
  • Athletics participation not major criterion; and
  • Athletics participation as a major criterion.

Here are some key points about outside aid classified into these three categories:

No relationship to athletics ability:  A scholarship program that requests or encourages an applicant to include their athletic participation or achievements as part of the application process cannot be classified in this category.  The organization that awards the scholarship may be asked to confirm that it did not consider athletics participation or achievements in selecting the athlete who receives the award and must not restrict the athlete’s choice of college institution.

Athletics Participation not Major Criterion.  Scholarships fit in this category if athletics participation or achievements are one of the criteria considered in awarding the scholarship, but are not the major criteria for awarding the scholarship.  Organizations awarding scholarships in this category are strongly encouraged to provide written notification of the award to the financial aid office of the college that the athlete will be attending.

Athletics Participation as a Major Criterion.  Scholarships are classified in this category if the athlete’s athletics participation and achievements are the major criteria for awarding the scholarship.  In fact, if applicants or nominees are required to be an athlete in order to be considered for a scholarship, then that scholarship will automatically be considered to be in this category.  Furthermore, if the recipient of a scholarship from this category was recruited by the college they will be attending, the recipient will be considered a “counter” for financial aid purposes and the value of the scholarship will be counted toward team financial aid limits as if it were an athletic scholarship awarded by the college.  Scholarships in this category should be sent to the financial aid office of the college the recipient will be attending so that the aid will be properly tracked for NCAA limits.

Athletes attending an NCAA Division I or II university will likely be asked to indicate on a form for their athletic department whether they are the recipient of an outside award.  In addition, an awarding organization may be asked to provide a copy of their application or nomination form and a list of criteria for the scholarship.

If you have questions about outside awards, or other questions about athletic scholarships, contact Rick Allen at 913-766-1235 or at rick@informedathlete.com.  You can also subscribe to the Informed Athlete monthly newsletter at www.informedathlete.com, or join the Informed Athlete Facebook fan page.

About Rick Allen

25+ years NCAA Rules Expertise, including Director of Compliance at 2 major DI schools

Former President of National Association for Athletic Compliance (NAAC)

Conducts compliance reviews and audits at NCAA Schools throughout the U.S.

Consulted with NAIA schools transitioning to NCAA membership status

Dad of a DI & DII student-athlete

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21 Responses to Key Points About Outside Scholarships

  • Tiffany

    Hi Rick. My son was recently given a “verbal commitment” by a DI coach. Because my son qualifies for academic scholarships, enough to pay for everything except books, the coach said he doesn’t qualify for a NLI. He said that they will get him book money “on the side.” This seems dangerous to me, as my son may pass up other offers as his season gets underway, with nothing in writing from this particular DI coach. Is there some other sort of “contract” that the coach can offer to my son- even though they aren’t giving him athletic student aide?
    Thanks so much!
    Tiffany

    • Hi Tiffany,

      There is no “contract” that the coach can offer your son which would ensure that they can provide him with book money “on the side.” Although it would not be binding and enforceable, I would ask the coach to state in writing what his plans are for your son to receive book money. It may be that he plans to allow your son to work the school baseball camps and pay him the money that can then be used to buy his books.

      Regarding your son possibly passing up other offers, it’s almost always better to be offered an athletic scholarship, because that’s an indication of the coach’s confidence in your son if they are willing to invest a scholarship to show they really want him at their school. This Div. I coach who is offering the verbal commitment is excited because he can possibly get your son for “free” since he’s already getting a lot of academic aid. There’s nothing wrong with that, and I applaud your son for earning those academic scholarships. But without an athletic scholarship, or a very strong indication from the coach of his interest in your son, there’s no investment from the coach into your son’s development.

      Good luck!

      Rick

  • Bill

    Hi Rick,
    I have a travel team where we have been trying to raise moneies to offset our costs. My question is are we able to provide our graduating seniors a $1,000.00 check to go towards their books for college? Or would tis be a violation of the NCAA rules.
    Thank you,
    Bill

    • Hi Bill,

      For any of your seniors who will be going to a Div. I program, that legislation says that “A student-athlete may receive financial aid through an established and continuing program to aid students, provided:
      1. The recipient’s choice of institution is not restricted by the donor of the aid; and
      2. There is no direct connection between the donor and the student-athlete’s institution.”

      This indicates to me that if you are going to do this, you need to plan to have it be an ongoing program that you plan to do consistently over a number of years, and that this money will not be going only to athletes who attend a school that you or your other coaches have ties to.

      This same approach would probably work the same for any of your players going to an NCAA Div. III program or to an NAIA program. Ironically, the same is not true of NCAA Div. II schools, They have a different rule (which used to be the same as the Div. I rule, but Div. I recently changed their rule, and Div. II hasn’t yet.).

      The Div. II rule prohibits a student-athlete from receiving financial aid or assistance “from an outside sports team or organization that conducts a competitive sports program” that the student-athlete is/was a member of.

      I hope this is helpful. I know it can be confusing. If you have additional questions, contact me directly at rick@informedathlete.com.

      Rick

  • Gary

    Rick, your comments above stated: “Furthermore, if the recipient of a scholarship from this category was recruited by the college they will be attending, the recipient will be considered a “counter” for financial aid purposes and the value of the scholarship will be counted toward team financial aid limits as if it were an athletic scholarship awarded by the college.” Given that, it would seem that there is nothing to be gained by a baseball program to bring in a player that comes with outside money. It soulds like they would have to reduce money intended to go to another player since their total availible could not change. I was looking for outside scholarship money for my son to play for a D1 program but if they have all of their scholarship money already committed then he could not come in with outside money. Am I understaning that correctly?

    • Gary

      Rick, as a follow up to my above question. Does the same “counter” rule apply if he receives academic related scholarship money. Also, what is the rule if the money comes from a travel youth baseball program that is a 501c3?

      • Gary,

        Regarding money from a travel baseball program, see my answer to your previous question. As far as academic scholarships, if they are from an outside organization, see my other answer. If they are from your son’s school that he will be attending, it will depend upon whether he meets the academic criteria for the scholarship to be “exempt” from counting against team limits.

        Rick

    • Hi Gary,

      The NCAA rules have changed since I wrote that blog. The rules on outside scholarships are much more liberal than they were at that time.

      In many cases, an athlete can now accept an outside scholarship without consequences as long as it’s from an “established and continuing program”, there is no direct connection between the donor organization and the college of the athlete’s choice, and the athlete’s choice of school is not restricted by the organization (i.e., as long as the athlete is not limited such that they can only use the outside scholarship at certain schools).

      Rick

  • David

    Do federal student loans (Stafford and PLUS) count in anyway to a DI Baseball Teams scholarship limits?

  • kATHY

    Hi Rick,
    My daughter has been offered an 80% scholorship which includes academic and athletic. She has also been offered full ride at 2 other schools. She wants to attend the 80% school. We are looking for additional scholarships to bridge the gap without taing out loans, etc. My church is offering a small scholarship but an acquaintance who is an alumni of the school advised that the alumni association offers small $1000.00 scholarships if she attends that school. Any problems with accepting the “alumni” scholarsip since it is school specific?

    • Kathy,

      Without knowing the specifics of the alumni scholarship, it is quite possible that the $1000 would have to count against the team limit for athletic scholarships in her sport, and would possibly just replace a portion of the athletic scholarship that she’s already been offered. You should inquire with the school for an answer specific to that scholarship.

      Rick

  • kATHY

    Thanks Rick for your response. I was told that the alumni has funds available for books, tuition etc.Bascially whatever assistance they can provide for students who need financial assistance. I think that the alumni organization is a sorrority but I’m not positive. Can you explain what you mean by counting against the team limit? Also, as an fyi- the differnce from the 80% is about $4000 per year that we would have to pay. Thanks

    • Kathy,

      Here’s an example. If an athlete receives a scholarship of $5000 from the coach, and then the alumni group awards the athlete with a $1000 scholarship, then this would most likely count as $6000 that the coach must count against their available allotment of athletic scholarship money.

      If the coach has already awarded all their other scholarship money and has no scholarship funds left to be “counted” toward their available limit, the $1000 alumni scholarship may simply replace a portion of the $5000 athletic scholarship.

      Rick

  • Amanda

    My daughter has accepted a verbal offer to play softball at a D1 school. The offer is a full scholarship (athletic funds). We have several local organizations that give grant money to students from our County that are good at any 4 yr institution. Can she receive this money without her athletic funds being reduced? The total of the grants is around 5,000 per year.

    • Amanda,

      This will depend upon how the various grants are decided and administered. In some cases, these grants may not affect her athletic scholarship, but in other cases, the scholarship may be reduced in an equal amount.

      Rick

      • Amanda

        The grants are given based solely on having lived in our County a given time period and a minimal gpa. They are dispersed directly to the college institution. Thank you!

  • Dan

    Rick,
    After receiving the NLI we noticed that there limitations on types of scholarships you could now apply/recieve for because they aren’t academic based. For example: Local town sports scholarships for participating in youth sports growing up, which are based on academics and community service are deemed countable towards the teams cap by the NCAA. As a result, we are leaving about $3,000 in local academic/community service scholarships on the table. Does this sound correct or is the university just being over conservative? The NCAA Eligibility Center says to consult with the college or university.

    • Dan,

      The university may be taking a conservative approach to this, depending upon the circumstances. In many cases, outside scholarships such as in your example don’t impact the team’s overall scholarship limit. However, what your daughter can receive as an individual may be limited by the size of her athletic scholarship and the school’s “cost of attendance.”

      Rick

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