NCAA Allows Players To Borrow Against Future Earnings For Insurance
By Phil Watson
A new waiver approved by the NCAA on Wednesday will allow student-athletes to borrow against their future earnings in order to purchase loss-of-value insurance.
The NCAA crossed another line in the direction of allowing student-athletes to be compensated, approving a waiver Wednesday that will allow players to borrow against their future earnings in order to purchase loss-of-value insurance.
Athletes can insure themselves against injury or illness that would cause their draft stock to drop and several top college football players—Heisman Trophy winner Jameis Winston of Florida State, top offensive lineman Texas A&M’s Cedric Ogbuehi and Oregon quarterback Marcus Mariota among them—have policies for just such a potential outcome.
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But schools have taken different approaches to the insurance. A new rule allows schools to use their Student Assistance Fund to help pay for those insurance policies and Florida State and Texas A&M are footing the bill for the policies covering Winston and Ogbuehi.
Oregon wasn’t paying for the insurance on Mariota initially, but reversed its field after getting a clarification from the NCAA that doing so would not be a violation.
From the NCAA’s statement on the waiver:
“Student-athletes may borrow against their future earnings potential from an established, accredited commercial lending institution exclusively for the purpose of purchasing insurance (with no cash surrender value) against a disabling injury or illness that would prevent the individual from pursuing a chosen career, provided a third party (including a representative of an institution’s athletics interests) is not involved in arrangements for securing the loan.”
Borrowing on future earnings is a common practice for players once they have declared for the draft, but it has been strictly forbidden for athletes with eligibility remaining.
Because, you know, the television networks and the fans pay to see administrators on Saturdays, not actual football players.