The Fast Track to Ineligibility: What Every Student Athlete Needs to Know About NIL Compliance

This is not legal advice, but general information.

Whether you’re helping student athletes land NIL deals or signing them yourself, there’s no doubt that it’s an exciting time to be part of college sports. Student athletes can now earn money, build their own brands, and open doors that didn’t exist before. But every deal comes with rules, and every rule carries the risk of costing a student athlete the chance to play the sport they’ve worked for their whole life.

This article helps student athletes and those that advise them to understand those risks. It explains how NCAA and school rules affect eligibility, highlights the most common ways student athletes lose their eligibility, and points to resources that can help student athletes protect themselves. The goal is simple: make the most of NIL opportunities without jeopardizing their future on the field or court.

The Multiple Levels of Oversight for Eligibility in Collegiate Athletics

• The three levels of eligibility governance

Student athlete eligibility operates on at least three separate levels: (1) NCAA regulations, (2) institutional rules, and (3) state law. NCAA eligibility standards, as outlined in the NCAA Manual, are adopted by member institutions to determine whether a student athlete may participate in intercollegiate competition. Institutional eligibility is determined by each school and may involve rules that go beyond NCAA requirements. And more recently, state laws impose additional obligations on student athletes, particularly in the NIL context. However, states don’t have the power to revoke NCAA eligibility directly.

Taking the time to learn and understand these dynamics can be dry (unless you’re a lawyer or compliance officer), but the distinction between these bodies and their effect on eligibility matters for each and every student athlete.

• Eligibility determinations made simple

Losing eligibility can happen faster than many student athletes realize. It can come from an NCAA ruling or from a school enforcing its own rules. In practice, a finding of ineligibility by the NCAA generally results in loss of eligibility at any NCAA member school, and many schools mirror those determinations. Institutional ineligibility, however, can occur even if the NCAA doesn’t take action. In either case, the effect is the same for the student athlete: the ability to compete is lost. Understanding these different frameworks is critical, especially as NIL agreements create new intersections between these layers of oversight and open up additional avenues for losing eligibility.

Common Compliance Risks That Can Lead to Ineligibility

NIL activity offers tremendous potential for student athletes by providing new opportunities to build their personal brand, secure sponsorships, and generate income in ways that were once prohibited under NCAA rules absent very few limitations. But this freedom comes with complexity, and the stakes are high.

Below, I unpack four of the most significant pitfalls that I believe every student athlete should be aware of in today’s NIL system. These aren’t the only risks that exist, but they represent some of the most relevant and common compliance challenges student athletes are likely to face and regulatory bodies are poised to punish. Understanding these pitfalls is essential for student athletes who want to protect their ability to compete while maximizing the opportunities that NIL provides, which are almost inseparable from one another.

• Pay-for-Play Arrangements

Despite the expansion of NIL rights, paying student athletes for the sole purpose of playing their respective sports, commonly referred to as “pay-for-play”, is not a permitted activity, and there is little indication that this stance will change anytime soon. This restriction was debated when NIL rights were first introduced in 2021, revisited during the NCAA’s House Settlement, and continues to be a red line the NCAA seems intent on refusing to remove absent intervention from a federal authority or the courts. For student athletes, this makes understanding the boundaries of pay-for-play critical.

You might wonder what exactly constitutes “pay-for-play” and how it differs from revenue sharing arrangements that are now becoming more common. While a full exploration of that distinction could merit its own article, the starting point is NCAA Bylaw 12.5.2. This Bylaw provides that a student athlete cannot receive compensation that is contingent on athletic performance or participation beyond actual and necessary expenses. In practice, this means revenue sharing generally falls outside the pay-for-play prohibition, but direct payments tied to performance or agreements disguised as legitimate NIL deals are prohibited. Even informal promises of compensation linked to performance or participation can create compliance risks.

The difficulty for student athletes is that pay-for-play arrangements are not always obvious. An endorsement agreement that offers bonuses based on performance, or a deal structured around team success, can easily cross the line. There is also significant scrutiny surrounding deals that pay a student athlete for effectively nothing but still receiving pay for their “NIL”. For that reason, consultation with a school’s compliance office or a legal professional that specializes in NIL law before signing any agreement is essential. Careful review and clear documentation are critical steps in protecting eligibility in a compliance landscape that leaves little room for error.

• College Sports Betting

Despite what you might assume based on the number of student athletes recently found engaging in sports betting, the NCAA has a strict compliance line against it. NCAA Bylaw 10.3 prohibits student athletes from betting on intercollegiate or professional athletics in which they participate or have knowledge of inside information. This rule applies regardless of whether the student athlete is betting on their own sport or their fellow student athlete’s sports. Violations carry severe consequences, including potential permanent ineligibility, and recent enforcement actions show these rules are enforced consistently.

That said, in October 2025, the NCAA Division I Administrative Committee approved a proposal that would allow student athletes and athletics department staff to bet on professional sports, pending approval from Divisions II and III. If all divisions approve, the rule could take effect November 1, 2025. This proposal still doesn’t lift the longstanding ban on betting on college sports or sharing insider information, but it does introduce a new layer of complexity to college sports governance and eligibility protection.

• Failure to Report NIL Deals

One of the most relevant and avoidable compliance risks for student athletes is failure to report NIL agreements. As of a few months ago, any agreement valued at $600 or more for Division 1 student athletes must be reported through the College Sport Commission’s NIL Go platform, and many schools have additional reporting requirements. These rules aren’t arbitrary. They exist to ensure transparency, allow compliance staff to review agreements for potential conflicts, and protect student athlete’s eligibility.

What makes this requirement particularly important today is a recent change in the College Sports Commission’s enforcement approach that introduces an anonymous reporting mechanism to share NIL violations. Many are referring to it as the “snitch line” and it signals a major shift toward greater oversight. As part of this new mechanism, everyone from compliance staff to boosters, and even fellow student athletes are being encouraged to report student athletes who partake in unreported NIL agreements. This creates an environment where omissions are likely to be uncovered and places even greater importance on strict compliance. It also gives some insight into how seriously the NCAA is taking these requirements.

The solution is straightforward: treat reporting as a nonnegotiable part of any NIL activity. Work closely with your compliance office and/or attorney, understand your school’s reporting requirements, and maintain thorough records of all agreements. In the current climate, where reporting requirements are being enforced more aggressively than ever, lapses in compliance can threaten a student athlete’s ability to compete and derail their future opportunities.

• Improper Hiring of Agents

Agent representation is and always has been an area where mistakes can have serious consequences. In this new collegiate sports era, student athletes are allowed to hire agents for certain NIL activities, but those relationships are governed by a combination of NCAA rules, some state laws, and institutional policy. These rules set boundaries on what agents can do, and those boundaries can vary depending on the situation. That means student athletes need to approach agent relationships with care and awareness.   

Navigating these rules requires diligence and clarity. The NCAA has issued guidelines to regulate agent relationships to protect both eligibility and the integrity of collegiate competition. Some state laws and university policies have as well.  However, those guidelines can be difficult to interpret without support, making it critical for student athletes to seek guidance before entering into any agreement.

Available Resources to Protect Eligibility

The complexity of NIL compliance and the risks to eligibility make proactive engagement essential. Fortunately, student athletes have access to a variety of resources to help navigate this landscape from internal university compliance offices to the NCAA’s public guidance.

However, there are times where it makes sense to look beyond these resources, especially when it comes to taxes and legal advice. The stakes are high, and even small mistakes can have lasting consequences. Having professional guidance can be the difference between a compliant agreement and one that jeopardizes eligibility and long-term opportunities.

Conclusion

Eligibility is the most valuable asset a student athlete possesses. In the NIL era, safeguarding eligibility requires understanding NCAA rules, institutional policies, and applicable state laws. Staying informed, engaging with compliance resources, and seeking professional guidance are not optional. They are essential. Student athletes who take these steps will not only protect their eligibility but also position themselves to fully benefit from the opportunities NIL makes possible.