Extraordinary Benefits

January 5th, 2018 | by Jonathan Yates
Extraordinary Benefits

Basketball great and former ESPN commentator Len Elmore tweeted that, “Student athletes are BENEFICIARIES of a system that can be improved but nevertheless offers extraordinary benefits.”

These “extraordinary benefits” have college athletes who receive a full scholarship enjoying a package deal going well into the six figures at some schools, an amount worth more than the income for many faculty members, university administrators such as deans, government employees, professional players, and the average American single, not to mention their peers: a teenager with only a high school diploma!

It is a package deal worth over $150,000.00 annually, according to an article in Forbes. Others put the value as being much higher when including coaching, travel, insurance, medical care, favorable tax treatment, and other features. Graduating as a result of an athletic scholarship can result in a lifetime income higher by more than $2 million. That puts the value of a college scholarship on an annuity basis in the $700,000.00 range.  

This chart more than makes the point, although it compares the amount of after-tax dollars needed to pay for tuition, room, boar, books, et al with gross income, so a scholarship is worth even more:

*value of college scholarship: more than $150,000.00

*average college administrator salary: $58,561.00

*average instructor at 4-year public institution: $50,436.00

*single adjusted gross income in USA: $34,940.00

*average for 16-19 year old in USA: $21,944.00

*minor league baseball starts at $13,000.00

The scholarship is also based on purchasing with after-tax dollars, the net income of an individual. From that, the value of a college scholarship is even more in the way of “extraordinary benefits.”   This results from the salaries listed on the chart are gross income, or before-taxes, which is a hit approaching 50% (income tax, property taxes, sales taxes, gas taxes, et al…).  

That means it would require about $300,000.00 in gross income to pay for the value of a college athletic scholarship with $150,000.00 in benefits utilizing the net income after taxes to pay the freight for tuition, room, board, books, and much, much more!

In an interview, Elmore enumerated that those on an athletic scholarship receive, “...free education, free medical while you’re there, cost of attendance stipend, plus room, board and books…”  That does not include free travel like the Rice University and Stanford University trip to Australia to play in the Sydney Cup last year.  It does not include the NCAA paying for family members to attend the Final Four.  This does not take into account the academic advising that can result in graduating with three degrees, all thanks to a scholarship.  There is, Elmore also notes, special tax treatment from the Internal Revenue Service.  While scholarship athletes receive “extraordinary benefits,” the average college student graduates nearly $40,000.00 in debt, according to Student Loan Hero (good luck getting help from the IRS with that!)

Checking the appeal of a product on the demand from the consumer is always the truest test.

If there was a need to pay players, there would be a strike against scholarships, or many rejecting the offers.  Rather than a record number of D1 football teams this year, schools would not have enough players to field squads.  There are also legions of walk-ons, vying for a scholarship by playing their way in college.  But interview after interview has yet to uncover a high school senior who has chosen to reject a college athletic scholarship to instead graduate nearly $40,000.00 in debt.

What does come up is families around the world taking uncommon, costly measures to nail down the “extraordinary benefits” of a scholarship to play sports for a college in America.

In an article in Sports Illustrated last year, it was detailed how a football player had moved from Australia to go to high school in Florida in hopes of a scholarship to an American college. This was also the basis for the movie “Bend it Like Beckham,” which tells of a Punjab Sikh girl living outside of London and her dream journey to university in the United States on a soccer scholarship.  There was an article in The Wall Street Journal on December 16, 2016, by Katy McLLaughlin, “Families on the Field of Dreams,” that reported on a family that has “…moved across state lines three times in as many years…’ so their son can achieve “…his goal since second grade -playing Division 1 hockey for Boston College.”  No mention nor a demand nor a statement of necessity that college athletes be paid in America.

Why do athletes around the world train so hard and dream of earning an athletic scholarship to go to school in the United States?

Because they know that American universities provide the best academic and sports programs for student-athletes in the history of the world.  It is not even close.  That is why there are never articles about high school student-athletes in the United States training so hard to go to college abroad or rejecting a scholarship to instead foot the bill (and the debt load) for an undergraduate degree. 

There is nothing that competes with the value of a sports scholarship for higher education in the United States and its “extraordinary benefits” that would require about $300,000.00 in gross income to purchase, which is why there are no strikes, demands, or need to pay college athletes.

Jonathan Yates About Jonathan Yates
Jonathan Yates spent much of his career working for Members of Congress in a variety of press and legislative posts. Positions he has held working for Members of Congress and state legislators include Chief of Staff, General Counsel, Legislative Director, Press Secretary, and Legislative Assistant. His journalistic work has appeared in such periodicals as The Washington Post, Foreign Policy, Investor's Business Daily, and TheStreet, among others. He has degrees from Harvard, Johns Hopkins, and Georgetown University Law Center; and has also matriculated at the U.S. Naval War College and The Johns Hopkins University School of Advanced International Studies (SAIS). Jonathan also hosts The Culture of Sports You can follow Jonathan Yates on Twitter at @politicsports13

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