The NCAA News - News & Features

Athletes gain greater access to assistance fund

At its April 30-May 2 meeting, the Executive Committee determined that the following Division I student-athletes will qualify for special assistance funds in 1996-97:

* Pell Grant-eligible student-athletes (except nonqualifiers in their first year in residence).

* Student-athletes who are receiving countable athletically related financial assistance and who have demonstrated financial need as determined by federal methodology or methodology used for all students at an institution.

The new definition includes all student-athletes who are currently eligible but adds partial grant-in-aid recipients who have unmet need. The pool of student-athletes who will be eligible for the fund will grow from about 37,000 to as many as 61,000, depending on the number of student-athletes receiving financial aid who also can demonstrate financial need.

The change came about as the result of recommendations from the Focus Group on Student-Athlete Benefits, which is chaired by Eugene D. Smith, director of athletics at Iowa State University. The focus group reemphasized that administration of the funds and the attendant interpretations should be left to Division I conferences.

Permissible uses

During the 1996-97 fiscal year, the following uses of the fund will be permitted:

* Cost of clothing and other essential expenses, not including entertainment, up to $500 for Pell-eligible student-athletes and full grant-in-aid student-athletes who demonstrate financial need.

* Cost of expendable academic course supplies and rental of nonexpendable supplies (for example, computer equipment and cameras) that are required for all students enrolled in the course.

* Medical and dental costs not covered by another insurance program. This includes premiums for optional medical insurance, which previously was not permitted.

* Costs associated with student-athlete or family emergencies.

Restrictions

Restrictions include the following:

* Financing any portion of an institutional grant-in-aid that could have been awarded to the student-athlete.

* Nonqualifiers may not receive special assistance funds during their first academic year in residence.

* The special assistance fund may not be used for entertainment expenses.

* Using the special assistance fund to purchase disability, illness or injury insurance to protect against the loss of potential future professional sports earnings is not permitted.

* The funds may not be used for administrative purposes (for example, paying a staff member to administer the program).

* A conference may accumulate no more than the total allocation received over the previous two years.

Other actions

The Executive Committee noted that the Association may need to develop an educational program to assist conference personnel in their administration of the fund. For instance, the committee noted that confusion has been expressed regarding whether the funds affect an individual's eligibility for Pell Grants (they do not).

Also, the committee noted confusion over the tax implications for student-athletes who receive funds. In that regard, the Executive Committee noted that:

* For a United States citizen, tax liability applies to gross income in excess of $6,400 (in 1995), plus the actual value of tuition, fees and books. The minimum tax rate of 15 percent then would apply.

* Every foreign student-athlete is expected to file a tax return, and liability applies to gross income in excess of the personal exemption of $2,500 (in 1995), plus the actual value of tuition, fees and books, as well as an additional exemption/deduction afforded some countries through special agreements. The Internal Revenue Service expects institutions to withhold 14 percent of any taxable amount received by a foreign student-athlete.

* Conferences may evaluate under permissible uses of the plan whether payment of any applicable withholding taxes should be permitted.