Financial Literacy Project

Overview

Intercollegiate athletics generates billions of dollars in revenue for Colleges and Universities and billions more for those who profit from the sports industry. However, student-athletes enrolled in non-profit academic institutions, who are at the center of this lucrative industry, have been left out of financial growth opportunities. Moreover, they have been denied invaluable financial and market lessons, inherent to their participation.

For more than 100 years, The National Collegiate Athletic Association (NCAA) has provided oversight of college athletics to maintain fairness and integrity. Recruiting violations and abuses by wayward athletic boosters resulted in laws prohibiting payment to athletes. While such governance has been designed to maintain fairness at the institutional level, it has led to the exclusion of student-athletes’ participation and understanding of the business and marketplace that is dramatically different from the early days of the NCAA.

Legislation put in place to protect and maintain institutional fairness has limited the discussion of the “business” of college athletics for student-athletes. Institutions have become well versed in the rules of what they cannot do to jeopardize eligibility of individual student-athletes and sanctions against the school. The mere mention of financial matters and student-athletes engenders assumptions of improprieties with which no institution wants to be associated.  However, major lessons and life skills such as financial literacy and market economics have been overlooked.

Vital and critical lessons of market economics, personal financial management and fiscal responsibility are rarely conveyed to student-athletes in the context of their role in the business in which they are involved. Further, the lack of understanding of the “business,” highlights a missed opportunity to educate them on the value of their education, scholarship and time. While interdepartmental budget transfers pay for all expenses incurred in the educational process, student-athletes are left unaware of their worth in a system in which, they help generate revenue. When payments are made on their behalf, they miss the lesson of personal financial responsibility, as well as the understanding that their time, skills and education have worth in the marketplace.

The debate of “pay for play” has long been a binary conversation; pay athletes and launch a degenerative spiral to a quasi professional minor league or, continue to maintain “amateur status” while ignoring the glaring financial discrepancy. What has not been included in the discussion is the primary role and original tenants of higher education, to prepare young people for a prosperous and productive future. Excluding student-athletes from the discussion, does more than protect institutions, it denies student-athletes life lessons that truly last a lifetime.

The Student-athlete Financial Literacy Project (FLP), is a comprehensive plan designed to educate student-athletes in the areas of financial management, planning and responsibility. The Project involves all scholarship student-athletes and incorporates Masters in Business Administration (MBA) candidates from adjacent schools of business.    

The Program

Summary

Student-athletes will participate in FLP by making payments to the office of the bursar for all expenses covered by their scholarship. Each month, participating student-athletes will complete the requisite forms to ensure transfer of funds to the appropriate department (tuition, housing, etc.). Actual payment will continue to be made through interdepartmental budget transfers, however, the process of making payments, calculating costs and expenses is a primary exercise of FLP.  

Student-athletes who make payments on time and comply with all program requirements (class attendance, etc.) will be awarded ($20.00) real dollars for use in one of three ways, investment in a student managed investment fund (SMIF), charitable contribution or personal use.

MBA graduate students with majors or concentrations in financial disciplines such as accounting, economics and finance will assist in the program. These “student financial advisors” will work with individual student-athletes on budgeting and planning, while monitoring and recording the payment process. Student financial advisors (SFA’s) will also manage a SMIF, designed specifically for student-athletes, under appropriate faculty or administrative oversight. SFA involvement will provide an invaluable service learning opportunity (for credit).

Financial Literacy Instruction

A course on personal finance will be mandatory for first year and transfer student-athletes. Studies suggest that knowledge and awareness about financial markets may be significantly enhanced by venues that immerse the learner in daily market context. Effectively done, such exposure could improve market knowledge and awareness by removing intimidation and increasing interest. As such, all student-athletes will receive gratis subscriptions to Minyanville, a financial information and education website focused on helping individuals learn about financial markets via a reality-based vicarious (i.e., observational) learning platform. Student-athletes will be asked to complete a series of lessons offered on the University of Minyanville section of the website that provide basic understanding and awareness of financial markets. “Graduating” from the University of Minyanville, reflected by a “diploma” received upon successful completion of an online test at the website, will be required. Continuing education courses in related fields such as Sports Business, Sports Marketing and related fields (facilities, athletic administration, and media) can be included in FLP.

Student Managed Investment Fund (SMIF)

Many business schools have embraced SMIF’s as a vehicle for providing students with hands on financial market experience. A SMIF would be created using contributions from student-athletes interested in learning about markets and investing. Student financial advisors will manage the SMIF under appropriate faculty or administrative oversight.  Like the student-athletes, the student financial advisors would receive gratis subscriptions to the Minyanville website, including access to learning and evaluative materials related to the University of Minyanville. The SMIF managers will meet routinely with it student-athletes to discuss financial goals and progress. As such, the SMIF offers opportunity for participative learning for the student-athletes as well as the student financial advisors. 

Who Participates?

All scholarship student-athletes regardless of grade point average, academic standing, financial need, eligibility status, etc. will participate in the program. Non-scholarship student-athletes can participate for academic credits only. Non-scholarship student-athletes or other students may participate in SMIF using their own resources.

How long is the program?

FLP is a four year program (life of scholarship). Corresponding course work is mandatory for first year and transfer students only. Non scholarship student-athletes can participate in all aspects of the program with the exception of receiving actual dollars.

All components of the program, payments, budget planning, etc. will take place during (and as a part of) the first year course. Upper class student-athletes in good academic standing will be permitted to make payments on-line or in person to fulfill program requirements.