The recent news that the NCAA will soon begin paying athletes in college was welcome, but lost in the discussion is the fact that they refuse to allow these same athletes to learn how to manage that extra income.
The NCAA Board of Governors voted to at least begin the process of allowing athletes in college to earn endorsement money.
This concession may be a few years down the road, but the NCAA should immediately stop its practice of preventing college athletes from learning how to manage the money they already earn. All high school athletes should take a personal finance course. One reason this doesn’t happen already is that the NCAA only allows certain core high school courses to qualify for scholarships. Personal finance is specifically excluded from that.
I recently received an email from a passionate teacher who had applied to the NCAA to get her school’s personal finance course to qualify as a “core course.” The NCAA responded that the course could not be approved because the association’s guidelines disallow teaching about issues related to one’s personal life, such as paying for college, types of credit, investing, insurance and budgeting.
Putting aside the issue of whether the NCAA should be in the business of approving high school curricula instead of schools and teachers, that is a stunningly counterproductive attitude. I’m all in favor of allowing core courses such as philosophy, but how about balancing that out with a practical course such as personal finance? Especially for student-athletes?
We owe it to our young student-athletes to teach them concepts such as “paying yourself first,” or managing a bank account in a digital world or interviewing skills to land that summer internship in the off-season. High school is the right time to teach these essential living skills.
Scholarship athletes in the power five conferences today receive stipends of between $2,000 and $5,000, and soon many will have even more money in their pockets when they are permitted to market themselves.
If you want to understand what happens when athletes don’t learn these concepts, you should watch the ESPN documentary “Broke.” It chronicles how many NBA and NFL players ended up in financial ruin for lack of financial understanding or education.
NBA player and now financial adviser Chris Dudley says that 60% of NBA players go broke within five years of retirement. Seventy-eight percent of former NFL players have financial difficulties within two years of leaving the game.
The NCAA has a responsibility to all college athletes. Its policy of not recognizing personal finance as a core course discourages students from taking it. If we can rethink the question of allowing student athletes to be paid, then we can certainly also rethink this damaging policy.
Tim Ranzetta is co-founder of Next Gen Personal Finance, a Palo Alto, California non-profit startup dedicated to ensuring that by 2030 all high school students take a personal finance course.
