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New Era for U.S. College Sports: Direct Athlete Pay and Federal Action Explained

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Introduction

College athletics in the United States just entered a new era. In 2025, a $2.8 billion legal settlement and a sweeping executive order reshaped how athletes—especially at the NCAA Division I level—are recruited, paid, and supported. For Baltic student-athletes and their families exploring the U.S. college route, understanding these reforms is crucial.

From direct athlete compensation to new rules aimed at preserving scholarships and supporting non-revenue sports, here’s everything you need to know about how U.S. college sports are changing—and what it means for your scholarship opportunities.

House v. NCAA Settlement: The Legal Case That Changed Everything

Background

The House v. NCAA case, filed in 2020, challenged longstanding NCAA rules restricting athlete compensation for Name, Image, and Likeness (NIL). The lawsuit escalated into a broader antitrust battle over the NCAA’s limits on how athletes could be paid.

Timeline & Approval

On June 6, 2025, U.S. District Judge Claudia Wilken approved a $2.8 billion class-action settlement. Starting July 1, 2025, NCAA Division I schools that opt in can directly pay athletes through revenue-sharing models.

This historic ruling replaces old scholarship caps with sport-specific roster limits and introduces a new oversight body—the College Sports Commission—to ensure fair implementation.

Key Details of the Settlement

  • Compensation Structure:
    • ~$1.976 billion for backdated NIL claims
    • $600 million in pay-for-play damages
    • Distribution varies by sport and year
  • Annual School Limits:
    • Up to $20.5 million per institution in 2025–26
    • Increases to $33 million by 2035
  • Oversight & Compliance:
    • Managed by the College Sports Commission
    • New platforms like NIL Go and CAPS will track payments and rosters
  • Participation Rules:
    • Power Five conferences are automatically included
    • Smaller or non-Power 5 schools must opt in by June 30, 2025, and can revise annually
    • Some schools (e.g., Ivy League, military academies) have opted out, citing Title IX and budget constraints

       

Note: The damages portion of the settlement is being appealed in the Ninth Circuit, meaning some payments may be delayed until 2026 or later.

Direct Payments in Practice: What Schools Are Doing

One early example is the University of Texas, which has committed to distributing the full $20.5 million allocation. Their proposed breakdown:

  • 75% to football
  • 15% to men’s basketball
  • 5% to women’s basketball
  • 5% for all other sports

     

However, this shift brings budget challenges. The university anticipates an additional $9 million in scholarship obligations, forcing some departments to reallocate funds and reconsider priorities.

Smaller universities—especially those outside major conferences—face tough decisions about opting in, complying with Title IX, and maintaining support for non-revenue sports like tennis, swimming, and women’s soccer.

Executive Order: “Saving College Sports” (July 24, 2025)

In response to the legal settlement and growing concerns over NIL-related exploitation, President Trump signed an Executive Order titled “Saving College Sports” on July 24, 2025.

Purpose and Context

The order seeks to:

  • Preserve competitive balance
  • Curb booster-led “pay-for-play” schemes
  • Protect scholarships and women’s sports
  • Clarify the employment status of athletes

     

It also addresses growing confusion and inconsistency across states due to conflicting NIL laws.

Key Provisions

  • Bans third-party “pay-for-play” compensation
     (NIL endorsements are still allowed if tied to fair market value)
  • Requires schools with over $50M in revenue to maintain current scholarships in non-revenue sports
  • Schools earning over $125M annually must increase support for women’s and Olympic sports
  • Directs federal agencies (DOE, DOL, NLRB, DOJ, FTC) to:
    • Clarify athlete employment rights
    • Enforce Title IX
    • Coordinate long-term federal oversight

What This Means for Athletes (Especially International Ones)

Benefits for Athletes

  • More Financial Support: Athletes can now receive direct revenue-based compensation on top of existing scholarships.
  • Increased Transparency: Platforms like CAPS will standardize roster and payment structures across schools.

     

Considerations for International Athletes

  • Visa Rules Still Apply: Direct payment doesn’t automatically change student visa restrictions.
  • Institutional Variation: Not all schools are participating, so it’s crucial to ask which financial and NIL options are available before committing.
  • Women’s Sports Protection: The executive order ensures that non-revenue and women’s sports remain protected—important for international female athletes seeking funding.

     

Implications for Schools

  • Strategic Planning: Universities must carefully balance resources between revenue-generating and Olympic sports.
  • Compliance Costs: Managing payments, federal oversight, and roster control adds administrative complexity.
  • Uncertainty Ahead: Appeals, future lawsuits, and legislative changes could still alter the landscape

Final Thoughts: A New Reality for College Sports

The combination of the House v. NCAA settlement and the “Saving College Sports” executive order signals the end of amateurism as we knew it in U.S. college sports. For international student-athletes—especially those from the Baltics—this presents both opportunities and new challenges.

It’s now more important than ever to:

  • Research each school’s participation status
  • Understand what financial and legal support is available
  • Work with trusted advisors who stay updated on evolving regulations

     

BaltixSport is here to help you navigate this changing system and make smart, informed decisions for your athletic and academic future in the U.S.

Additional Resources