The Downside of BYU’s bigger Cost of Attendance

The NCAA’s new rule that allows schools to pay student-athletes cash to cover their cost of attendance was passed by the members of the Power 5 conferences by a vote of 64 to 1 back in January. The single dissenting vote was given by Boston College. BC administrators released this statement after the vote:

This legislation further segregates student-athletes from the general student population by increasing aid without need-based consideration. Legislation already exists for student-athletes in need through Pell grants and the student-assistance fund. We have concerns that the Federal Financial aid formula is sufficiently ambiguous that adjustments for recruiting advantage will take place.

Only a few months later, Boston College’s words are proving to be quite prophetic. It’s surprising, as accurate as those concerns have proven, that none of the other schools agreed with the argument at the time.

First, here is some background on what Boston College is talking about: The Student Assistant Fund is funded by the NCAA and money is given to each Division I school. In 2013, the NCAA paid just under $74,000,000 into it. The idea, as the University of Kansas explained is that the NCAA not only allows, but also pays for solutions for student-athletes with great needs. Money distributed from this fund doesn’t count against the scholarships athletes receive.

Shabazz Napier’s 2014 statement that there are “hungry nights that I go to bed and I’m starving” was perhaps a tipping point in the debate to rewrite the rules to allow for greater athlete compensation. The idea of the NCAA making billions while the students that played basketball starved was repugnant and paid cost of attendance seemed to be everyone’s idea to fix it.

However, if any NCAA school had a legitimately starving student, that school already had the ability to pay for documented legitimate needs. That’s what Boston College is talking about when they say “legislation already exists for student-athletes in need.”

But now that the legislation has passed, schools are trying to find the resources to fund this new budget item. Perhaps there’s a small handful of schools who have a few extra million a year just sitting on the shelf, but most have to be a little creative.

Colorado State is funding its cost of attendance with the $7 million buyout it was paid when Florida hired Jim McElwain away from them. That’s solves the problem for the Rams for the immediate future, but counting on a $7 million buyout every three years might not be sustainable.

Most BYU fans know about Utah State’s amazing ability to snooker the state of Utah out of a perpetual $1.5 million to fund Aggie recruiting.

But, perhaps even worse than allocating state tax revenue, other schools are looking at using the free money they get from the NCAA to help students most in need to fund their cost of attendance.

Emails showed leaders at North Carolina State, perhaps not the best-funded athletic department in the ACC, kicked around the idea of tapping their Student Assistance Fund. They already have $450,000 a year coming in from the NCAA and one leader suggested they use that money to “more strategically help us with recruiting rather than making these funds available to all students.”

That quote is from an email from their department’s head of compliance to their athletic director. This money, which was designed to cover the poorest students with the greatest needs, would now get evenly passed out to every athlete. The NCAA rules allow this, because the funds are being distributed “for the direct benefit of athletes,” but paying for everyone’s cost of attendance is not what the fund was designed for.

Even if the fund was never well promoted and not always perfectly executed, using the money for documented student needs has to be a better idea than draining those funds to fill strategic recruiting needs.

Which takes us to the last part of Boston College’s prophetic statement: “We have concerns that the Federal Financial aid formula is sufficiently ambiguous that adjustments for recruiting advantage will take place.”

When BYU recently announced its cost of attendance at $4,500 (relatively high), it was deemed as a great sign for BYU by some. They said it meant BYU was going to be competitive with the big schools, but BYU is likely only paying its students the average living expense cost as determined by BYU’s office of financial aid. Many students travel a long way to get to Provo, so that drives the average cost of attendance above schools whose students tend to live closer to campus.

Athletic Departments are not supposed to be able to dictate how much the financial aid office says it costs. Will fan gloating or public pressure end up causing schools to start one-upping each other? Boston College seems to rightly worry that this figure is not hard to fudge. Who do you think has more political clout on a college campus: The head football coach and athletic director, or the campus financial aid office?

Even Nick Saban has recently come around on the issue, although too late to change Alabama’s vote on the matter. He recently said:

To do it the way we did it is going to be a nightmare. We’ve spent 100 years in the NCAA trying to make everything equal — so no extra benefits, nobody could get something that somebody else couldn’t get. Alright. Now you leave it up to the institution, and I think some people have manipulated their numbers because they’ve significantly changed from last year to this year, and that’s not the spirit of the rule. Everybody has historically from an academic standpoint tried to keep the cost of attendance down. It’s a benefit to the students. It’s a benefit to their scholarships. Now all of a sudden it’s going to be different, and I don’t think that’s good.

It seems that leaving schools in charge of setting their own cost of attendance is indeed a bad idea. I, for one, don’t trust schools to leave their financial aid offices alone when there are big news reports that another school is paying $2,000 more for cost of attendance. College football programs remind me too much of Calvin, here:

At the heart of the issue, raiding money earmarked to assist and solve the problems of the poorest kids on campus to fund that inflated cost of attendance for the purpose of recruiting is an especially bad idea.

With so much TV money flowing through NCAA sports, the general proposal of getting extra benefits to the players has broad support, but the way the cost of attendance legislation and implementation has unfolded so far, it’s looking like it will cause a lot of extra problems, just like Boston College said it would.

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5 Comments

1. 

   Dr. Nick

   May 15, 2015 at 10:17 am

   It will be difficult for athletic departments to mess with the average cost of attendance numbers too much. That number must be reported by universities as part of their standard recruitment materials, so it goes to each and every prospective student — not just athletes. Pumping up the cost-of-attendance might help athletics, but it will only increase the sticker shock for students and parents when they are considering already expensive universities. This is why many elite private colleges in very expensive cities like Northwestern, Stanford, and USC report very low cost-of-attendance numbers – they want to minimize the already huge number they send to prospective students and their parents. At the end of the day, these are still universities first and athletic programs second, so I have a tough time seeing how the tail will wag the dog too much.
2. 

   cvd6262

   May 15, 2015 at 10:38 am

   Schools don’t have to raise their total COA estimates to appear more competitive.

   Take the USC-UCLA example:

   USC off-campus housing: $13,334
   USC off-campus “other expenses”: $1,580 <– COA stipend limit
   USC Total non-school costs: $14,914

   UCLA off-campus housing: $10,138
   UCLA off-campus “other expenses”: $4,851 <– COA stipend limit
   UCLA Total non-school costs: $14,989

   Notice that the total cost is the same; USC just classifies more of the cost as living expenses. I expect we'll see estimates of living expenses plummet, as schools shift the expenses to COA.
3. 

   Trevor

   May 15, 2015 at 7:55 pm

   If you listen to NPR’s Planet Money regarding advertised cost of tuition they say that people are actually attracted to higher advertised cost of attendance as a sign of a better education. Further, once they compare adveritsed vs actual cost (typically significantly less), students think they’re getting a killer deal. So, higher COA might actually help recruiting athletes and students.
4. 

   Troy S. Schoonover (@TroySchoonover)

   May 27, 2015 at 8:43 pm

   I don’t understand why the money is coming from where it’s coming from. I think most people expected this money to come by some means from the TV contracts that each conference has. That way the “money they’re making from me playing football” actually makes it to the student. Where is THAT money going instead?
5. 

   ERIC C. (@kahunacougar)

   June 17, 2015 at 6:12 pm

   Great article very informative really enjoyed reading it.