Full Cost of Attendance is Long Overdue
Until 1973 the above was standard operating procedure across the country.
Schools could offer athletes $15 every month during the nine months of school. The payment, “laundry money”, was a supplement on top of the athletic scholarship (tuition, fees, books, dorm room, and a meal plan).
While $15 seems like very little money, in 1956 that payment would have bought you 75 gallons of gasoline. Until a couple weeks ago when prices started falling 75 gallons would have cost you about $235 and over the nine months schools paid laundry money, that works out to about $2,115.
The NCAA move toward offering full cost of attendance is not something new, it was something the membership of the Association believed was the right thing to do sixty years ago.
The early 1970’s were a period with a number of changes that had the potential to impact the economic health of universities.
The nation experienced a mild recession from December of 1969 to November of 1970 and then a more significant one November 1973 to March of 1975. Economic downturns tend to reduce state tax collections and generally result in reduced funding for colleges and universities.
Student enrollment began falling. Two changes led to the drop. The first was that more baby boomers moved past college age reducing the number college age high school graduates. The second was a change in the rules for the military draft during Vietnam. A deferment from the draft for attending college was available until September of 1971. The deferment remained for those already enrolled but not for new students.
Falling enrollment levels over the next few years reduced tuition and fee income for colleges, and smaller schools were sometimes in dire financial straits. In Arkansas, financial woes led to a long discussed merger of Arkansas A&M into the University of Arkansas System as Arkansas-Monticello taking place in 1971 and Arkansas A,M&N became Arkansas-Pine Bluff in 1972. It was a national trend with several schools merging into or being acquired in Texas by the University of Texas, Texas A&M, and Houston. In Mississippi, Southern Miss absorbed a junior college while another merged with a sister juco.
The third factor arrived in 1972 when Congress amended Title IX and athletic opportunities were deemed educational opportunities. Many colleges and universities did not offer women’s athletics and were now faced with having to add additional sports, hire more staff (coaches, trainers, academic support, administrative support) and award more scholarships.
Faced with these three economic pressures two big changes were implemented.
Football moved from potentially unlimited scholarships (many conferences did limit scholarships) to a cap of 105 scholarships. The second money saving measure was elimination of “laundry money”.
The crisis in athletic funding ended about 15-20 years later. Attendance continued to grow. Ticket prices increased. Schools began increasing revenue even more with premium seating packages. For the top tier schools television revenue exploded. Enrollments began rising increasing the revenue of schools and athletic fees became more common funding sources and each rise in enrollment increased the revenue dedicated to athletics. A loosening of student loan limits and eligibility coupled with many states adopting “challenge” scholarships made students and their parents less price conscious and more accepting of athletic fees which are over $17 per credit hour now at some schools. The NCAA Tournament has also increased the revenue shared with conferences. Even leagues performing poorly in the tournament receive around $3 million a year from the various funds. The College Football Playoff will pay in excess of $12 million per year to the five lower profile FBS leagues.
The increasing revenue has gone to better facilities, improved equipment, and higher salaries but until the last couple of years when the NCAA and conferences and schools began being named as defendants in lawsuits on behalf of student-athletes, there was no serious consideration given to restoring the payment of “laundry money”.
Student-athletes took a hit to help balance budgets but when the financial situation improved, no one gave much thought to giving back what they lost. The current move to cover full cost of attendance in Division I is long over-due.
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