Research: Did college sports influence how schools calculated Cost of Attendence?

Good morning, and thanks for spending part of your day with Extra Points.

I’m excited to share a guest post today that highlights some new, unique academic research. But before we get into the weeds, I’d like to quickly talk about how we are approaching freelance submissions for the next few months.

I’m happy to accept freelance pitches on a rolling basis. If you’d like to pitch Extra Points, send an email to [email protected] that explains what you’d like to write about, why you are the person to write about it, and how your idea fits with our readership.

I am only accepting freelance pitches. Please do not email me, asking to write for Extra Points, without providing any pitches. I do not have the resources to serve as an assignment editor at the moment.

A good Extra Points pitch is for a story that

Our standard rate is $300 per story, but that’s not carved in stone. To talk about your specific idea, shoot me an email!

Today, I’m happy to pass the mic over to Greg Chick of NILnomics, a data-driven newsletter exploring college athletics data. Greg just earned his PhD from UMass Boston, and he wanted to share some of the research he conducted for that PhD with us. Chick explored the data surrounding the huge College Sports Arms Race before NIL and the portal: Cost of Attendence.

His work is below:

Do you remember that time when college athletes were first allowed to get paid? The Power Conference schools wanted it, forced it through the NCAA, and made it the law of the land. The other schools could choose to opt-in if they wanted. Nick Saban decried it all. Everyone thought college athletics would end.

I'm not talking about the House settlement. Or NIL. Or Alston payments. I'm talking about Cost-of-Attendance (COA) stipends — a policy change that happened in 2015 and has been almost completely forgotten in the decade since. My name is Greg Chick, and I just earned my PhD studying what actually happened when the NCAA allowed schools to pay athletes for the first time.

For those unfamiliar, COA is a number the financial aid office at every college and university in the country calculates annually. It has five main components: tuition, fees, room, board, and something called "miscellaneous expenses." 

Those first four parts are straightforward - they're the billed expenses the school sends you. But that last one? The Federal Student Aid Handbook defines it as " an allowance for books, supplies, transportation, and miscellaneous personal expenses. This can include a reasonable amount, as determined by your school." Basically, every school gets to estimate, in whatever way they see fit, what out-of-pocket expenses a typical student faces. The regulations grant significant leeway in how schools arrive at that number.

Think of it like a bucket. The bigger the COA, the bigger the bucket. Students fill the bucket with scholarships, grants, and student loans. Critically, you can't have more financial aid than the COA ceiling allows. Thus, there's a direct link between how high a school sets its COA and how much a student can borrow in loans. A school that calculates a higher COA isn't just making a philosophical statement about the cost of living near campus — it's determining the upper limit of how much debt its students can take on.

Before 2015, college athlete scholarships covered only tuition, fees, room, and board. Elite, full scholarship college athletes would arrive on campus debt-free from billed expenses but broke for everything else. Specifically, college athletes were left to fend for themselves to cover those out-of-pocket costs the school itself had already calculated and acknowledged. 

The COA stipend changed that. Schools could now give athletes a stipend equal to the gap between the old scholarship and the school's full COA figure. A few thousand dollars, typically. Nothing like the million-dollar NIL deals or revenue-sharing contracts that dominate headlines today, but real money for a college student who couldn't previously hold a job without risking eligibility.

You can imagine the hot takes.

First, COAs already varied wildly between schools. There was already a built-in disparity in what a player could receive at one FBS school versus another. For example, Tennessee offered $5,666 in COA stipends compared to Michigan at $2,204 per student. Boston College, the lone dissenting vote among the Power 5 schools, was required to award these COA stipends (perhaps they voted against it because they would go on to award the smallest COA stipend). Second, and more provocatively, everyone expected coaches to get on the phone with their financial aid offices and demand they inflate the COA number to give recruits a bigger stipend. 

Nick Saban put it plainly: "I think some people have manipulated their COA numbers because they've significantly changed from last year to this year, and that's not the spirit of the rule." Third, the familiar argument that fans would tune out if players got paid was raised, loudly, again. Same arguments, different decade.

Fortunately, at least some of these concerns can be studied empirically. Dr. Willis Jones (now at SMU and the third reader on my dissertation committee) published a paper in 2022 examining whether Power 5 schools increased their COAs in response to the policy. His finding: yes, statistically significant increases occurred. Nick Saban, validated.